Budget Implementation Act, 2016, No. 2 (S.C. 2016, c. 12)

• 84 (1) Schedule II to the Regulations is amended by adding the following after Class 14:

  CLASS 14.1
  (5 per cent)

  Property of a taxpayer that, in respect of a business of the taxpayer,

  • (a) is goodwill;

  • (b) was eligible capital property of the taxpayer immediately before January 1, 2017 and is owned by the taxpayer at the beginning of that day; or

  • (c) is acquired after 2016, other than

    • (i) property that is tangible or, for civil law, corporeal property,

    • (ii) property that is not acquired for the purpose of gaining or producing income from business,

    • (iii) property in respect of which any amount is deductible (otherwise than as a result of being included in this class) in computing the taxpayer’s income from the business,

    • (iv) property in respect of which any amount is not deductible in computing the taxpayer’s income from the business because of any provision of the Act (other than paragraph 18(1)(b)) or these Regulations,

    • (v) an interest in a trust,

    • (vi) an interest in a partnership,

    • (vii) a share, bond, debenture, mortgage, hypothecary claim, note, bill or other similar property, or

    • (viii) property that is an interest in, or for civil law a right in, or a right to acquire, a property described in any of subparagraphs (i) to (vii).

• (2) Subsection (1) comes into force or is deemed to have come into force on January 1, 2017.

C.R.C., C. 385Consequential Amendments to the Canada Pension Plan Regulations Arising from Subsection 27(1), Chapter 7 of the Statutes of Canada, 2016

• 85 (1) The definition Child Tax Benefit in subsection 37(1) of the Canada Pension Plan Regulations is repealed.

• (2) Subsection 37(1) of the Regulations is amended by adding the following in alphabetical order:

  Canada child benefit

  Canada child benefit means the deemed overpayment determined in accordance with section 122.61 of the Income Tax Act in respect of a qualified dependant under seven years of age; (allocation canadienne pour enfants)

• (3) Subsections (1) and (2) are deemed to have come into force on July 1, 2016.

Terminology Changes Arising from Subsection 27(1), Chapter 7 of the Statutes of Canada, 2016

References in the Employment Insurance Act

Marginal note:Replacement of “Child Tax Benefit”

86 The Employment Insurance Act is amended by replacing “child tax benefit” with “Canada child benefit” in the following provisions:

• (a) subsections 16(2) and (3); and

• (b) subsections 152.17(2) and (3).

References in Regulations

Marginal note:Replacement of “Child Tax Benefit” in Canada Pension Plan Regulations

• 87 (1) The Canada Pension Plan Regulations are amended by replacing “Child Tax Benefit” with “Canada child benefit”, with any grammatical changes that circumstances require, in the following provisions:

  • (a) paragraphs 53(a), (c) and (d) to (f); and

  • (b) paragraphs 77(1)(c) and (d).

• Marginal note:Replacement of “child tax benefit” in Employment Insurance Regulations

  (2) The Employment Insurance Regulations are amended by replacing “child tax benefit” with “Canada child benefit” in the following provisions;

  • (a) subsections 34(2) and (3); and

  • (b) subsections 34(5) and (7).

• Marginal note:Replacement of “Canada child tax benefit” in Immigration and Refugee Protection Regulations

  (3) The Immigration and Refugee Protection Regulations are amended by replacing “Canada child tax benefit” with “Canada child benefit” in the following provisions:

  • (a) subparagraph 134(1)(c)(vi); and

  • (b) subparagraph 134(1.1)(b)(vi).

Coming into Force

Marginal note:July 1, 2016

88 Sections 86 and 87 are deemed to have come into force on July 1, 2016.

PART 2Amendments to the Excise Tax Act (GST/HST Measures) and Other Related Texts

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

Amendments to the Act

Marginal note:1994, c. 9, s. 2(1)

• 89 (1) The definition capital property in subsection 123(1) of the Excise Tax Act is replaced by the following:

  capital property

  capital property, in respect of a person, means property that is, or would be if the person were a taxpayer under the Income Tax Act, capital property of the person within the meaning of that Act, other than property described in Class 12, 14, 14.1 or 44 of Schedule II to the Income Tax Regulations; (immobilisation)

• Marginal note:2007, c. 18, s. 2(5)

  (2) Paragraph (a) of the definition filiale déterminée in subsection 123(1) of the French version of the Act is replaced by the following:

  • a) la personne morale relativement à laquelle la personne morale donnée détient le contrôle admissible des voix et est propriétaire d’au moins 90 % de la valeur et du nombre des actions, émises et en circulation et comportant plein droit de vote en toutes circonstances, du capital-actions de la personne morale;

• Marginal note:2007, c. 18, s. 2(5)

  (3) The portion of the definition qualifying subsidiary in subsection 123(1) of the English version of the Act before paragraph (a) is replaced by the following:

  qualifying subsidiary

  qualifying subsidiary of a particular corporation means another corporation in respect of which the particular corporation holds qualifying voting control and owns not less than 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of the other corporation, and includes

• (4) Subsection (1) comes into force or is deemed to have come into force on January 1, 2017.

• (5) Subsections (2) and (3) apply as of March 22, 2017. They also apply as of March 23, 2016

  • (a) in respect of an election under subsection 150(1) or 156(2) of the Act that is to become effective on a day that is after March 22, 2016 but before March 22, 2017, unless the election is filed on or before March 22, 2016; and

  • (b) for the purpose of applying paragraphs 4(3)(b) and (c) of the Financial Services and Financial Institutions (GST/HST) Regulations in respect of a supply of a service if the agreement for the supply is entered into after March 22, 2016 but before March 22, 2017 and it is not the case that all or substantially all of the service will be performed before March 22, 2017.

Marginal note:2007, c. 18, s. 3(1)

• 90 (1) The portion of paragraph 128(1)(a) of the Act before subparagraph (i) is replaced by the following:

  • (a) qualifying voting control in respect of the other corporation is held by, and not less than 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of the other corporation are owned by,

• (2) Section 128 of the Act is amended by adding the following after subsection (1):

  • Marginal note:Qualifying voting control

    (1.1) For the purposes of this Part, a person or a group of persons holds qualifying voting control in respect of a corporation at any time if at that time

    • (a) the person, or the members of the group collectively, as the case may be, own shares of the corporation to which are attached not less than 90% of the shareholder votes that may be cast in respect of each matter, other than a matter

      • (i) for which a statute of a country, or of a state, province, or other political subdivision of a country, that applies to the corporation provides, in respect of the vote of the shareholders of the corporation on the matter, that

        • (A) any shareholder of the corporation has voting rights that are different from the voting rights that the shareholder would otherwise have under the letters patent, instrument of continuance or other constating instrument by which the corporation was incorporated or continued, including any amendment to, or restatement of, the constating instrument, or

        • (B) holders of a class or series of shares of the corporation are entitled to vote separately as a class or series, or

      • (ii) that is a prescribed matter or a matter that meets prescribed conditions or arises in prescribed circumstances; or

    • (b) the person or group, as the case may be, is a prescribed person or group in relation to the corporation.

• (3) Section 128 of the Act is amended by adding the following after subsection (3):

  • Marginal note:Voting right controlled by another person

    (4) For the purposes of subsection (1.1), a particular person is deemed not to own a share at a particular time if

    • (a) another person has a right under a contract, in equity or otherwise, either immediately or in the future and either absolutely or contingently, to control the voting rights attached to the share, unless the right is not exercisable at the particular time because its exercise is contingent on the death, bankruptcy or permanent disability of an individual; and

    • (b) the other person is not closely related to the particular person at the particular time.

• (4) Subsection (1) applies as of March 22, 2017. It also applies as of March 23, 2016

  • (a) in respect of an election under subsection 150(1) or 156(2) of the Act that is to become effective on a day that is after March 22, 2016 but before March 22, 2017, unless the election is filed on or before March 22, 2016; and

  • (b) for the purpose of applying paragraphs 4(3)(b) and (c) of the Financial Services and Financial Institutions (GST/HST) Regulations in respect of a supply of a service if the agreement for the supply is entered into after March 22, 2016 but before March 22, 2017, and it is not the case that all or substantially all of the service will be performed before March 22, 2017.

• (5) Subsections (2) and (3) are deemed to have come into force on March 23, 2016.

Marginal note:2007, c. 18, s. 6(5)

• 91 (1) Clause 156(1.1)(a)(ii)(A) of the Act is replaced by the following:

  • (A) both holds qualifying voting control in respect of a corporation that is a member of a qualifying group of which the other person is a member and owns at least 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of the corporation, or

• Marginal note:2000, c. 30, s. 25(1)

  (2) The portion of subparagraph 156(1.1)(b)(i) of the Act before clause (A) is replaced by the following:

  • (i) qualifying voting control in respect of the other person is held by, and not less than 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of the other person are owned by,

• Marginal note:2000, c. 30, s. 25(1); 2007, c. 18, s. 6(7)

  (3) Clauses 156(1.1)(b)(i)(A) to (C) of the French version of the Act are replaced by the following:

  • (A) la société de personnes donnée,

  • (B) une personne morale, ou une société de personnes canadienne, qui est membre d’un groupe admissible dont la société de personnes donnée est membre,

  • (C) plusieurs des personnes morales ou sociétés de personnes visées aux divisions (A) et (B),

• Marginal note:2007, c. 18, s. 6(8)

  (4) The portion of subparagraph 156(1.1)(b)(ii) of the Act before clause (A) is replaced by the following:

  • (ii) qualifying voting control in respect of a corporation is held by, and not less than 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of the corporation are owned by,

• Marginal note:2000, c. 30, s. 25(1)

  (5) Clauses 156(1.1)(b)(ii)(A) and (B) of the French version of the Act are replaced by the following:

  • (A) l’autre personne, si la personne morale est membre d’un groupe admissible dont la société de personnes donnée est membre,

  • (B) la société de personnes donnée, si la personne morale est membre d’un groupe admissible dont l’autre personne est membre,

• (6) Subsections (1) to (5) apply as of March 22, 2017. They also apply as of March 23, 2016 in respect of an election under subsection 156(2) of the Act that is to become effective on a day that is after March 22, 2016 but before March 22, 2017, unless the election is filed on or before March 22, 2016.

• 92 (1) Subsection 298(3) of the Act is amended by striking out “or” at the end of paragraph (a), by adding “or” at the end of paragraph (b) and by adding the following after paragraph (b):

  • (c) to give effect to an alternative basis or argument advanced by the Minister under subsection (6.1).

• Marginal note:2000, c. 30, s. 89(4)

  (2) The portion of subsection 298(6.1) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Alternative basis or argument

    (6.1) The Minister may advance an alternative basis or argument in support of an assessment of a person, or in support of all or any portion of the total amount determined on assessment to be payable or remittable by a person under this Part, at any time after the period otherwise limited by subsection (1) or (2) for making the assessment unless, on an appeal under this Part,

• (3) Section 298 of the Act is amended by adding the following after subsection (6.1):

  • Marginal note:Limitation

    (6.2) If a reassessment of a person is made that gives effect to an alternative basis or argument advanced by the Minister under subsection (6.1) in support of a particular assessment of the person, the Minister shall not reassess for an amount that is greater than the total amount of the particular assessment.

  • Marginal note:Exception

    (6.3) Subsection (6.2) does not apply to any portion of an amount determined on reassessment that the Minister would be entitled to reassess under this Part at any time after the period otherwise limited by subsection (1) or (2) for making the reassessment if this Part were read without reference to subsection (6.1).

• (4) Subsections (1) to (3) come into force on the day on which this Act receives royal assent, except that those subsections do not apply in respect of appeals instituted on or before that day.

• 93 (1) Part V of Schedule VI to the Act is amended by adding the following after section 23:

  • 23.1 A supply of a service of rendering to individuals technical or customer support by means of telecommunications if the supply is made to a non-resident person that is not registered under Subdivision D of Division V of Part IX of the Act and is not a consumer of the service, but not including a supply of

    • (a) an advisory, consulting or professional service; or

    • (b) a service of acting as an agent of the non-resident person or of arranging for, procuring or soliciting orders for supplies by or to the non-resident person.

• (2) Subsection (1) applies to

  • (a) any supply made after March 22, 2016; and

  • (b) any supply made on or before March 22, 2016 if the supplier did not, on or before that day, charge, collect or remit an amount as or on account of tax under Part IX of the Act in respect of the supply.