C-15 · Budget 2025 Implementation Act, No. 1

2(1) Paragraph 12(1)(t) of the Income Tax Act is replaced by the following: (t) the amount deducted under subsection 127(5) or (6), 127.44(3), 127.45(6), 127.48(3), 127.49(6) or 127.491(10) in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year to the extent that it was not included in computing the taxpayer’s income for a preceding taxation year under this paragraph or is not included in an amount determined under paragraph 13(7.1)(e) or 37(1)(e), subparagraph 53(2)(c)(vi) to (vi.5) or (h)(ii) or for I in the definition undepreciated capital cost in subsection 13(21) or L in the definition cumulative Canadian exploration expense in subsection 66.1(6); (2) Subsection (1) is deemed to have come into force on April 16, 2024.

3(1) The portion of subsection 13(7.1) of the Act before paragraph (a) is replaced by the following: (7.1) For the purposes of this Act, where section 80 applied to reduce the capital cost to a taxpayer of a depreciable property or a taxpayer deducted an amount under subsection 127(5) or (6), 127.44(3), 127.45(6), 127.48(3), 127.49(6) or 127.491(10) in respect of a depreciable property or received or is entitled to receive assistance from a government, municipality or other public authority in respect of, or for the acquisition of, depreciable property, whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance other than (2) Paragraph 13(7.1)(e) of the Act is replaced by the following: (e) where the property was acquired in a taxation year ending before the particular time, all amounts deducted under subsection 127(5) or (6), 127.44(3), 127.45(6), 127.48(3), 127.49(6) or 127.491(10) by the taxpayer for a taxation year ending before the particular time, (3) The formula in the definition undepreciated capital cost in subsection 13(21) of the Act is replaced by the following: (A + B + C + D + D.1) − (E + E.1 + E.2 + F + G + H + I + J + K) (4) The definition undepreciated capital cost in subsection 13(21) of the Act is amended by adding the following after the description of E.1: E.2 is the total of all amounts each of which is an amount by which the undepreciated capital cost to the taxpayer of depreciable property of that class is required to be reduced at or before that time because of subsection 81(6), (5) The description of I in the definition undepreciated capital cost in subsection 13(21) of the Act is replaced by the following: I is the total of all amounts deducted under subsection 127(5) or (6), 127.44(3), 127.45(6), 127.48(3), 127.49(6) or 127.491(10) in respect of a depreciable property of the class of the taxpayer, in computing the taxpayer’s tax payable for a taxation year ending before that time and subsequent to the disposition of that property by the taxpayer, (6) The portion of paragraph 13(24)(a) of the Act before subparagraph (i) is replaced by the following: (a) subject to paragraph (b), for the purposes of the description of A in the definition undepreciated capital cost in subsection (21) and of sections 127, 127.1, 127.44, 127.45, 127.48, 127.49 and 127.491 , the property is deemed (7) Subsections (1), (2), (5) and (6) are deemed to have come into force on April 16, 2024. (8) Subsections (3) and (4) are deemed to have come into force on December 31, 2023.

4(1) The description of E in the definition adjusted taxable income in subsection 18.2(1) of the Act is amended by striking out “and” at the end of paragraph (a) and by adding the following after that paragraph: (a.1) the amount claimed by the taxpayer for the year under paragraph 111(1)(a), to the extent that amount does not reduce the taxpayer’s taxable income for the year, as determined for the purpose of paragraph (b) in the description of D, and (2) Paragraph (g) of the description of B in the definition adjusted taxable income in subsection 18.2(1) of the Act is replaced by the following: (g) an amount deducted by the taxpayer under subsection 104(6) in computing its income for the year, except to the extent of any portion of the amount that (i) has been designated under subsection 104(19) for the year, or (ii) is attributable to an amount that would, in the absence of subsection (2), have been deductible in computing the taxpayer’s income for the year, (3) The portion of paragraph (l) of the description of B in the definition adjusted taxable income in subsection 18.2(1) of the Act before subparagraph (ii) is replaced by the following: (l) an amount deducted under subsection 127(5) or (6), 127.44(3), 127.45(6), 127.48(3), 127.49(6) or 127.491(10) in respect of a property acquired in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year to the extent that it (i) is included in an amount determined under paragraph 13(7.1)(e) or subparagraph 53(2)(c)(vi) to (vi.5) or (h)(ii) or for I in the definition undepreciated capital cost in subsection 13(21), and (4) Paragraph (c) of the definition excluded interest in subsection 18.2(1) of the Act is replaced by the following: (c) where the payee is a financial institution group entity, the payer (i) is a financial institution group entity, or (ii) would be a special purpose loss corporation, if the reference to “financial holding corporation” in paragraph (a) of the definition special purpose loss corporation were read as a reference to “financial institution group entity”; (5) Paragraphs (b) and (c) of the definition special purpose loss corporation in subsection 18.2(1) of the Act are replaced by the following: (b) is formed or exists solely for the purpose of generating a loss of the particular corporation from the interest ; and (c) would, in the absence of this section, have a loss for the year resulting from the interest that is, or will be, utilized exclusively by a financial institution group entity that is an eligible group entity in respect of the particular corporation. ( société à usage déterminé ayant subi des pertes ) (6) Subsections (1) and (2) apply to taxation years that end after August 15, 2025. (7) Subsection (3) is deemed to have come into force on April 16, 2024. (8) Subsections (4) and (5) apply to taxation years of a taxpayer that end on or after August 12, 2024.

5(1) Subsection 37(1) of the Act is amended by adding the following after paragraph (a): (b) the total of all amounts each of which is an expenditure of a capital nature that is (i) made by the taxpayer in the year or in a preceding taxation year on scientific research and experimental development carried on in Canada, directly undertaken by or on behalf of the taxpayer, and related to a business of the taxpayer, and (ii) in respect of property acquired that would be depreciable property of the taxpayer if this section were not applicable in respect of the property, other than land or a leasehold interest in land, (2) Paragraph 37(1)(d) of the Act is replaced by the following: (d) the total of all amounts each of which is the amount of any government assistance or non-government assistance (as those terms are defined in subsection 127(9)) in respect of an expenditure described in paragraph (a) or (b) that, at the taxpayer’s filing-due date for the year, the taxpayer has received, is entitled to receive or can reasonably be expected to receive, (3) Subsection 37(6) of the Act is replaced by the following: (6) For the purpose of section 13, an amount claimed under subsection (1) that may reasonably be considered to be in respect of a property described in paragraph (1)(b) is deemed to be an amount allowed to the taxpayer in respect of the property under regulations made under paragraph 20(1)(a), and for that purpose the property is deemed to be of a separate prescribed class. (4) Clause 37(6.1)(a)(i)(B) of the Act is replaced by the following: (B) the amount determined immediately before that time in respect of the taxpayer under paragraph (1)(b) , or (5) Clause 37(8)(a)(ii)(A) of the Act is amended by striking out “or” at the end of subclause (I), by replacing “and” with “or” at the end of subclause (II) and by adding the following after subclause (II): (III) an expenditure of a capital nature that, at the time it was incurred, was for the provision of premises, facilities or equipment, where at that time it was intended that it would be used during all or substantially all of its operating time in its expected useful life for — or that all or substantially all of its value would be consumed in — the prosecution of scientific research and experimental development in Canada, and (6) Subclause 37(8)(a)(ii)(B)(II) of the Act is replaced by the following: (I) an expenditure of a current nature for, and all or substantially all of which was attributable to, the lease of premises, facilities or equipment for the prosecution of scientific research and experimental development in Canada, other than an expenditure in respect of general purpose office equipment or furniture, (II) an expenditure for the prosecution of scientific research and experimental development in Canada directly undertaken on behalf of the taxpayer, (III) an expenditure described in subclause (A)(III), other than an expenditure in respect of general purpose office equipment or furniture, (7) Clause 37(8)(a)(ii)(B) of the Act is amended by striking out “or” at the end of subclause (IV) and by adding the following after subclause (V): (VI) 1/2 of any other expenditure of a current nature in respect of the lease of premises, facilities or equipment used primarily for the prosecution of scientific research and experimental development in Canada, other than an expenditure in respect of general purpose office equipment or furniture; (8) Subsection 37(8) of the Act is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d): (e) despite paragraph (a), references to expenditures on or in respect of scientific research and experimental development must not include (i) any capital expenditure made in respect of the acquisition of a building or a leasehold interest therein, other than a prescribed special-purpose building, (ii) any outlay or expense made or incurred for the use of, or the right to use, a building other than a prescribed special-purpose building, (iii) any payment made by a taxpayer to a corporation, or to an approved research institute or an approved association with which the taxpayer does not deal at arm’s length, to the extent that the amount of the payment may reasonably be considered to have been made to enable the recipient to acquire a building or a leasehold interest in a building or to pay an amount in respect of the rental expense in respect of a building, and (iv) any payment made by a taxpayer to an approved university, college or organization, to the extent that the amount of the payment may reasonably be considered to have been made to enable the recipient to acquire a building, or a leasehold interest in a building, in which the taxpayer has, or may reasonably be expected to acquire, an interest. (9) Subsections 37(14) and (15) of the Act are repealed. (10) Subsections (1) to (9) apply in respect of property acquired on or after December 16, 2024 and, in the case of lease costs, to expenditures incurred on or after December 16, 2024.

6(1) The portion of subparagraph 39(9)(b)(i) of the Act before clause (A) is replaced by the following: (i) the total of all amounts each of which is twice the amount deducted by the taxpayer under section 110.6, 110.61 or 110.62 in computing the taxpayer’s taxable income for a preceding taxation year that (2) Subsection (1) is deemed to have come into force on January 1, 2024.

7(1) The portion of subparagraph 40(1)(a)(iii) of the Act before clause (A) is replaced by the following: (iii) subject to subsections (1.1) to (1.4) , such amount as the taxpayer may claim (2) Subsection 40(1.3) of the Act is replaced by the following: (1.3) In computing the amount that a taxpayer may claim under subparagraph (1)(a)(iii) in computing the taxpayer’s gain from the disposition of a share of the capital stock of a corporation , that subparagraph is to be read as if the references in that subparagraph to “1/5” and “4” were references to “1/10” and “9” respectively, if the shares were disposed of by the taxpayer under a qualifying business transfer. Reserve — dispositions to worker cooperatives (1.4) In computing the amount that a taxpayer may claim under subparagraph (1)(a)(iii) in computing the taxpayer’s gain from the disposition of a share of the capital stock of a corporation, that subparagraph is to be read as if the references in that subparagraph to “1/5” and “4” were references to “1/10” and “9” respectively, if the shares were disposed of by the taxpayer under a qualifying cooperative conversion. (3) Subsections (1) and (2) apply in respect of transactions that occur on or after January 1, 2024.

8(1) The definition common share in subsection 44.1(1) of the Act is repealed. (2) The portion of the definition eligible small business corporation share in subsection 44.1(1) of the Act before paragraph (a) is replaced by the following: eligible small business corporation share of an individual means a share issued by a corporation to the individual if (3) Paragraph (b) of the definition eligible small business corporation share in subsection 44.1(1) of the Act is replaced by the following: (b) immediately before and after the share was issued, the total carrying value of the assets of the corporation and corporations related to it did not exceed $ 100,000,000 . ( action déterminée de petite entreprise ) (4) Paragraph (b) of the definition qualifying disposition in subsection 44.1(1) of the Act is replaced by the following: (b) throughout the period during which the individual owned the share, a share of an active business corporation; and (5) Paragraph (a) of the definition replacement share in subsection 44.1(1) of the Act is replaced by the following: (a) acquired by the individual in the year or in the following calendar year ; and (6) The portion of subsection 44.1(7) of the Act before paragraph (a) is replaced by the following: (7) For the purpose of this section, where an individual receives shares of the capital stock of a particular corporation (in this subsection referred to as the “new shares”) as the sole consideration for the disposition by the individual of shares of the particular corporation or of another corporation (in this subsection referred to as the “exchanged shares”), the new shares are deemed to be eligible small business corporation shares of the individual and shares of the capital stock of an active business corporation that were owned by the individual throughout the period that the exchanged shares were owned by the individual, if (7) The portion of subsection 44.1(9) of the Act before paragraph (a) is replaced by the following: Special rule — qualifying disposition (9) A disposition of a share of an active business corporation (in this subsection referred to as the “subject share”) by an individual that, but for this subsection, would be a qualifying disposition of the individual is deemed not to be a qualifying disposition of the individual unless the active business of the corporation referred to in paragraph (a) of the definition active business corporation in subsection (1) was carried on primarily in Canada (8) Subsection (1) is deemed to have come into force on January 1, 2025. (9) Subsections (2) to (7) apply to dispositions that occur on or after January 1, 2025.

9(1) Clause 53(1)(e)(ix)(A) of the Act is replaced by the following: (A) the taxpayer’s share of the amount ( other than an amount that is received as an excluded loan as defined in subsection 12(11) ) of any assistance or benefit that the partnership received or became entitled to receive after 1971 and before that time from a government, municipality or other public authority, whether as a grant, subsidy, forgivable loan, deduction from royalty or tax, investment allowance or any other form of assistance or benefit, in respect of or related to a Canadian resource property or an exploration or development expense incurred in Canada (2) Subparagraph 53(1)(e)(xiii) of the Act is replaced by the following: (xiii) any amount required by subsection 127(30) or 127.45(17), section 127.48, subsection 127.49(17) or section 127.491 or 211.92 to be added to the taxpayer’s tax otherwise payable under this Act for a taxation year that ended before that time in respect of the interest in the partnership; (3) Paragraph 53(2)(c) of the Act is amended by adding the following after subparagraph (vi.4): (vi.5) an amount equal to that portion of all amounts deemed deducted under subsection 127.491(10) in computing the tax otherwise payable by the taxpayer under this Part for the taxpayer’s taxation years ending before that time that may reasonably be attributed to amounts added in computing the clean electricity investment tax credit (as defined in subsection 127.491(1)) of the taxpayer because of subsection 127.491(12), (4) Subparagraph 53(2)(k)(i) of the Act is amended by striking out “or” at the end of clause (C), by replacing “and” at the end of clause (D) with “or” and by adding the following after clause (D): (E) an amount received as an excluded loan as defined in subsection 12(11), and (5) Subsections (1) and (4) are deemed to have come into force on January 1, 2020 and apply to loans made after December 31, 2019. (6) Subsections (2) and (3) are deemed to have come into force on April 16, 2024.

10(1) Paragraph 55(5)(c) of the Act is replaced by the following: (c) the income earned or realized by a corporation for a period throughout which it was a private corporation is deemed to be its income for the period otherwise determined on the assumption that (i) no amounts were deductible by the corporation under section 37.1 of this Act, as that section applies for taxation years that ended before 1995, or paragraph 20(1)(gg) of the Income Tax Act , chapter 148 of the Revised Statutes of Canada, 1952, and (ii) any amount deductible under section 113 and included in the corporation’s capital dividend account (as defined in subsection 89(1)) under paragraph (h) of that definition was not included in the corporation’s income; (2) Subsection (1) applies to taxation years that begin on or after April 7, 2022.

11(1) Subparagraph 56(1)(a)(i) of the Act is amended by striking out “and” at the end of clause (F), by adding “and” at the end of clause (G) and by adding the following after clause (G): (H) an amount paid or transferred from a registered pension plan, in respect of an unlocated individual, to an unclaimed property authority, (2) Subsection (1) applies in respect of amounts paid or transferred to an unclaimed property authority after December 31, 2026.

12(1) Subparagraph (ii) of the description of A in paragraph 64(a) of the Act is amended by striking out “and” at the end of clause (P) and by adding the following after clause (Q): (R) where the taxpayer has a severe and prolonged impairment in physical functions, for the cost of an ergonomic work chair prescribed by a medical practitioner, including related amounts paid for an ergonomic assessment to a person engaged in the business of providing such services, (S) where the taxpayer has a severe and prolonged impairment in physical functions, for the cost of a bed positioning device prescribed by a medical practitioner, including related amounts paid for an ergonomic assessment to a person engaged in the business of providing such services, (T) where the taxpayer has a severe and prolonged impairment in physical functions, for the cost of a mobile computer cart prescribed by a medical practitioner, (U) where the taxpayer has an impairment in physical or mental functions, for the cost of an alternative input device prescribed by a medical practitioner to allow the taxpayer to use a computer, (V) where the taxpayer has an impairment in physical or mental functions, for the cost of a digital pen device prescribed by a medical practitioner to allow the taxpayer to use a computer, (W) where the taxpayer has a vision impairment, for the cost of a navigation device for low vision that is prescribed by a medical practitioner, (X) where the taxpayer has an impairment in mental functions, for the cost of memory or organizational aids that are prescribed by a medical practitioner, and (Y) where the taxpayer is blind or profoundly deaf or has severe autism, severe diabetes, severe epilepsy, severe mental impairment or a severe and prolonged impairment that markedly restricts the use of the taxpayer’s arms or legs, for the cost of medical expenses described in subparagraphs 118.2(2)(l)(i) to (iv) if the references in those subparagraphs to the “patient” were read as references to the “taxpayer”, (2) Subsection (1) applies to the 2024 and subsequent taxation years.

13(1) The definition assistance in subsection 66(15) of the Act is replaced by the following: assistance means any amount, other than a prescribed amount or an excluded loan as defined in subsection 12(11) , received or receivable at any time from a person or government, municipality or other public authority whether the amount is by way of a grant, subsidy, rebate, forgivable loan, deduction from royalty or tax, rebate of royalty or tax, investment allowance or any other form of assistance or benefit; ( montant à titre d’aide ) (2) Subsection (1) is deemed to have come into force on January 1, 2020 and applies to loans made after December 31, 2019.

14(1) Subsection 66.2(2) of the Act is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d): (e) the amount determined by the formula A(B − C) where A is (i) for taxation years that end before 2030, 15%, (ii) for taxation years that begin before 2030 and end after 2029, the amount determined by the formula 0.15(I/J) + 0.075(K/J) where I is the total of all reaccelerated Canadian development expenses incurred by the taxpayer before 2030 and in the taxation year, J is the total of all reaccelerated Canadian development expenses incurred by the taxpayer in the taxation year, and K is the total of all reaccelerated Canadian development expenses incurred by the taxpayer after 2029 and in the taxation year, and (iii) for taxation years that begin after 2029, 7.5%, B is the total of all reaccelerated Canadian development expenses incurred by the taxpayer in the taxation year, and C is the amount determined by the formula (D − E) − (F − G − H) where D is the total of the amounts determined for E to O in the definition cumulative Canadian development expense in subsection (5) at the end of the taxation year, E is the total of the amounts determined for E to O in the definition cumulative Canadian development expense in subsection (5) at the beginning of the taxation year, F is the total of the amounts determined for A to D.1 in the definition cumulative Canadian development expense in subsection (5) at the end of the taxation year, G is the total of the amounts determined for A to D.1 in the definition cumulative Canadian development expense in subsection (5) at the end of the preceding taxation year, and H is the amount determined for B. (2) Paragraph (b) of the definition accelerated Canadian development expense in subsection 66.2(5) of the Act is replaced by the following: (b) is incurred after November 20, 2018 and before 2025 , and (3) Subsection 66.2(5) of the Act is amended by adding the following in alphabetical order: reaccelerated Canadian development expense , of a taxpayer, means any cost or expense incurred by the taxpayer during a taxation year if the cost or expense (a) qualifies as a Canadian development expense at the time it is incurred, other than (i) an expense in respect of which the taxpayer is a successor, within the meaning of subsection 66.7(4), and (ii) a cost in respect of a Canadian resource property acquired by the taxpayer, or a partnership in which the taxpayer is a member, from a person or partnership with which the taxpayer does not deal at arm’s length, (b) is incurred after 2024 and before 2034, other than expenses deemed to have been incurred on December 31, 2033 because of subsection 66(12.66), and (c) if the Canadian development expense is deemed to be a Canadian development expense incurred by the taxpayer because of paragraph 66(12.63)(a), is an amount renounced under an agreement entered into after 2024; ( frais d’aménagement au Canada réaccélérés ) (4) Subsections (1) to (3) are deemed to have come into force on January 1, 2025.

15(1) Subsection 66.4(2) of the Act is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c): (d) the amount determined by the formula A(B − C) where A is (i) for taxation years that end before 2030, 5%, (ii) for taxation years that begin before 2030 and end after 2029, the amount determined by the formula 0.05(I/J) + 0.025(K/J) where I is the total of all reaccelerated Canadian oil and gas property expenses incurred by the taxpayer before 2030 and in the taxation year, J is the total of all reaccelerated Canadian oil and gas property expenses incurred by the taxpayer in the taxation year, and K is the total of all reaccelerated Canadian oil and gas property expenses incurred by the taxpayer after 2029 and in the taxation year, and (iii) for taxation years that begin after 2029, 2.5%, B is the total of all reaccelerated Canadian oil and gas property expenses incurred by the taxpayer in the taxation year, and C is the amount determined by the formula (D − E) − (F − G − H) where D is the total of the amounts determined for E to J in the definition cumulative Canadian oil and gas property expense in subsection (5) at the end of the taxation year, E is the total of the amounts determined for E to J in the definition cumulative Canadian oil and gas property expense in subsection (5) at the beginning of the taxation year, F is the total of the amounts determined for A to D.1 in the definition cumulative Canadian oil and gas property expense in subsection (5) at the end of the taxation year, G is the total of the amounts determined for A to D.1 in the definition cumulative Canadian oil and gas property expense in subsection (5) at the end of the preceding taxation year, and H is the amount determined for B. (2) Paragraph (b) of the definition accelerated Canadian oil and gas property expense in subsection 66.4(5) of the Act is replaced by the following: (b) is incurred after November 20, 2018 and before 2025 ; ( frais à l’égard de biens canadiens relatifs au pétrole et au gaz accélérés ) (3) Subsection 66.4(5) of the Act is amended by adding the following in alphabetical order: reaccelerated Canadian oil and gas property expense , of a taxpayer, means any cost or expense incurred by the taxpayer during a taxation year, if the cost or expense (a) qualifies as a Canadian oil and gas property expense at the time it is incurred, other than (i) an expense in respect of which the taxpayer is a successor, within the meaning of subsection 66.7(5), and (ii) a cost in respect of a Canadian resource property acquired by the taxpayer, or a partnership in which the taxpayer is a member, from a person or partnership with which the taxpayer does not deal at arm’s length, and (b) is incurred after 2024 and before 2034; ( frais à l’égard de biens canadiens relatifs au pétrole et au gaz réaccélérés ) (4) Subsections (1) to (3) are deemed to have come into force on January 1, 2025.

16(1) Subclause 66.8(1)(a)(ii)(B)(I) of the Act is replaced by the following: (I) the total of all amounts required by subsections 127(8), 127.44(11), 127.45(8), 127.48(12), 127.49(8) and 127.491(12) in respect of the partnership to be added in computing the investment tax credit, the CCUS tax credit (as defined in subsection 127.44(1)), the clean technology investment tax credit (as defined in subsection 127.45(1)), the clean hydrogen tax credit (as defined in subsection 127.48(1)), the CTM investment tax credit (as defined in subsection 127.49(1)) or the clean electricity investment tax credit (as defined in subsection 127.491(1) ) of the taxpayer in respect of the fiscal period, and (2) Subsection (1) is deemed to have come into force on April 16, 2024.

17(1) Subparagraph 69(11)(a)(i) of the Act is replaced by the following: (i) any deduction (other than a deduction under section 110.6, 110.61 or 110.62 in respect of a capital gain from a disposition of a share acquired by the taxpayer in an acquisition to which subsection 85(3) or 98(3) applied) in computing income, taxable income, taxable income earned in Canada or tax payable under this Act, or (2) Subsection (1) is deemed to have come into force on January 1, 2024.

18(1) Paragraphs 74.2(2)(a) and (b) of the Act are replaced by the following: (a) for the purposes of sections 3 and 111, as they apply for the purposes of sections 110.6 to 110.62 , such portion of the gain or loss as may reasonably be considered to relate to the disposition of a property by another person in the year shall be deemed to arise from the disposition of that property by the individual in the year; and (b) for the purposes of sections 110.6 to 110.62 , that property shall be deemed to have been disposed of by the individual on the day on which it was disposed of by the other person. (2) Subsection (1) applies to the 2024 and subsequent taxation years.

19(1) Subsection 74.5(12) of the Act is amended by adding “or” at the end of paragraph (b) and by replacing paragraphs (c) and (d) with the following: (c) to the individual’s spouse or common-law partner, while the property (or property substituted for it) is held under a TFSA or FHSA of which the spouse or common-law partner is the holder and to the extent that the spouse or common-law partner does not have (i) an excess TFSA amount (as defined in subsection 207.01(1)), at the time of the contribution of the property under the TFSA, or (ii) an excess FHSA amount (as defined in subsection 207.01(1)), at the time of the contribution of the property under the FHSA. (2) Subsection (1) is deemed to have come into force on April 1, 2023.

20(1) Subsection 81(1) of the Act is amended by adding the following after paragraph (c.1): (c.2) the portion of a taxable capital gain of the taxpayer for the year from the disposition of a vessel (as defined in subsection (13(21)), including the furniture, fittings, radiocommunication equipment and other equipment attached to the vessel, that can reasonably be considered to have accrued while the vessel (i) was property of a corporation resident in Canada (if this Act were read without reference to subsection 250(4)) that satisfied the conditions set out in paragraphs 250(6)(a) and (b), and (ii) was used by the corporation solely to earn income from international shipping; Property pertaining to ships (c.3) taxable capital gains of the taxpayer for the year from the disposition of personal or movable property that pertained solely to the operation of vessels while the vessels met the conditions in subparagraphs (c.2)(i) and (ii); (2) Subsection 81(1) of the Act is amended by adding the following after paragraph (c.3): Ship of resident corporations — excess recapture (c.4) the amount, if any, determined by the formula A × [B ÷ (B + C)] where A is an amount included under subsection 13(1), in respect of a prescribed class, in computing the taxpayer’s income for the year, B is the amount determined for E.2 in the definition undepreciated capital cost in subsection 13(21) in respect of the prescribed class at the end of the year, and C is the amount determined for E in the definition undepreciated capital cost in subsection 13(21) in respect of the prescribed class at the end of the year; (3) Subsection 81(1) of the Act is amended by striking out “or” at the end of paragraph (s), by adding “or” at the end of paragraph (t) and by adding the following after paragraph (t): Disability benefits (u) an amount received under the Canada Disability Benefit Act . (4) Section 81 of the Act is amended by adding the following after subsection (5): Ship of resident corporations — undepreciated capital cost (6) If, at the end of a taxation year of a taxpayer, the taxpayer owns a vessel (as defined in subsection 13(21)) it used in the year to earn income that would not be included in computing its income because of paragraph (1)(c.1), the undepreciated capital cost to the taxpayer of the prescribed class that includes the vessel is reduced, at the time that is immediately before the end of the year, by the greatest amount that the taxpayer could have deducted under paragraph 20(1)(a) in respect of property of that class in computing its income for the year, but for paragraph 18(1)(c). (5) Subsection (1) applies to the portion of a taxable capital gain that accrues on or after December 31, 2023. (6) Subsections (2) and (4) are deemed to have come into force on December 31, 2023. (7) Subsection (3) applies to taxation years that begin after 2024.

21(1) Subparagraph 84.1(2.31)(f)(ii) of the Act is replaced by the following: (ii) the child, or at least one member of the group of children, as the case may be, is actively engaged on a regular, continuous and substantial basis ( including within the meaning of paragraph 120.4(1.1)(a)) in the activities of a relevant business of the subject corporation or a relevant group entity, and (2) The portion of paragraph 84.1(2.31)(g) of the Act before subparagraph (i) is replaced by the following: (g) subject to subsection (2.3), no later than 36 months after the disposition time or such greater period as is reasonable in the circumstances, the taxpayer and a spouse or common-law partner of the taxpayer have taken reasonable steps to (3) Subparagraph 84.1(2.32)(g)(ii) of the Act is replaced by the following: (ii) the child, or at least one member of the group of children, as the case may be, is actively engaged on a regular, continuous and substantial basis ( including within the meaning of paragraph 120.4(1.1)(a)) in the activities of a relevant business of the subject corporation or a relevant group entity, and (4) The portion of paragraph 84.1(2.32)(h) of the Act before subparagraph (i) is replaced by the following: (h) subject to subsection (2.3), no later than 60 months after the disposition time or such greater period as is reasonable in the circumstances, the taxpayer and a spouse or common-law partner of the taxpayer have taken reasonable steps to (5) Subsections (1) to (4) are deemed to have come into force on January 1, 2024.

22(1) Paragraph 85.1(4)(a) of the Act is replaced by the following: (a) it is the case that (i) the disposition is part of a transaction or event or a series of transactions or events that includes a disposition (referred to in this paragraph as the “relevant disposition”) of a property that is (A) the share, (B) property (other than any property that is received by the taxpayer as consideration for the disposition and to which paragraph (3)(a) would apply in the absence of this subsection) substituted for the share, or (C) property any of the fair market value of which is derived, directly or indirectly, from property referred to in clause (A) or (B), and (ii) the relevant disposition is to a person or partnership (in this subsection and subsection (4.1) referred to as the “acquirer”) that (A) immediately after the transaction, event or series, deals at arm’s length with the taxpayer or a person that is, at any time during the period that begins at the time of the disposition and ends immediately after the transaction, event or series, a particular person in respect of the taxpayer, unless (I) the acquirer is a foreign affiliate of the taxpayer or of a successor corporation of the taxpayer in respect of which the taxpayer or the successor corporation, as the case may be, has a qualifying interest (within the meaning of paragraph 95(2)(m)) at the time of the transaction or event or throughout the series, or (II) at the time of the relevant disposition, the property that is disposed of is not excluded property (as defined in subsection 95(1)) of a foreign affiliate of the taxpayer, of a person that is, at any time during the period, a particular person in respect of the taxpayer or of a partnership, any member of which is, at any time during the period, the taxpayer or a particular person in respect of the taxpayer, or (B) immediately after the relevant disposition, is a non-resident person or partnership that does not deal at arm’s length with the taxpayer or with a person that is, at any time during the period that begins at the time of the disposition and ends immediately after the relevant disposition, a particular person in respect of the taxpayer, unless (I) at the time of the transaction or event or throughout the series, the acquirer is a non-resident corporation that is, for the purposes of section 17, a controlled foreign affiliate of the taxpayer or of a successor corporation of the taxpayer, or (II) the relevant disposition is of a share of the capital stock of a corporation resident in Canada; or (2) Section 85.1 of the Act is amended by adding the following after subsection (4): (4.1) In applying paragraph (4)(a), (a) a taxpayer or a particular person in respect of the taxpayer (each of which is referred to in this subsection as a “relevant taxpayer”) and an acquirer are deemed to be dealing with each other at arm’s length, at any time, for the purposes of clause (4)(a)(ii)(A) if, (i) where either the relevant taxpayer or the acquirer is a partnership and the other party is not, any member of the partnership deals at arm’s length, at that time, with the other party, or (ii) where both the relevant taxpayer and the acquirer are partnerships, the relevant taxpayer or any member of the relevant taxpayer deals at arm’s length, at that time, with the acquirer or any member of the acquirer; and (b) an acquirer is deemed to be a non-resident person with whom the relevant taxpayer does not deal at arm’s length, at any time, for the purposes of clause (4)(a)(ii)(B) if, (i) where either the relevant taxpayer or the acquirer is a partnership and the other party is not, (A) any member of the partnership does not deal at arm’s length, at that time, with the other party, and (B) the acquirer — or, where the acquirer is a partnership, any member of the acquirer — is a non-resident person at that time, or (ii) where both the relevant taxpayer and the acquirer are partnerships, (A) the relevant taxpayer or any member of the relevant taxpayer does not deal at arm’s length, at that time, with the acquirer or any member of the acquirer, and (B) any member of the acquirer is a non-resident person at that time. Definitions (4.2) The following definitions apply in this subsection and subsections (4) and (4.1). particular person , in respect of a taxpayer at any time, means a person that is at that time (a) resident in Canada and not dealing at arm’s length with the taxpayer; (b) a successor corporation of the taxpayer; or (c) resident in Canada and not dealing at arm’s length with a person described in paragraph (a) or (b). ( personne déterminée ) successor corporation of a particular corporation means (a) a corporation of which the particular corporation is a predecessor corporation (within the meaning of subsection 87(1)); (b) a corporation into which the particular corporation was wound-up in a winding-up to which subsection 88(1) applied; or (c) a successor corporation of a successor corporation of the particular corporation. ( société remplaçante ) (3) Subsections (1) and (2) apply in respect of dispositions that occur on or after August 15, 2025.

23(1) Paragraph 87(2)(j.6) of the Act is replaced by the following: (j.6) for the purposes of paragraphs 12(1)(t) and (x), subsections 12(2.2) and 13(7.1), (7.4) and (24), paragraphs 13(27)(b) and (28)(c), subsections 13(29) and 18(9.1), paragraphs 20(1)(e), (e.1), (v) and (hh), sections 20.1 and 32, paragraph 37(1)(c), subsection 39(13), subparagraphs 53(2)(c)(vi) and (h)(ii), paragraph 53(2)(s), subsections 53(2.1), 66(11.4), 66.7(11) and 84.1(2.31) and (2.32), sections 110.61 and 110.62 , subsection 127(10.2), section 139.1, subsection 152(4.3), the determination of D in the definition undepreciated capital cost in subsection 13(21), the determination of L in the definition cumulative Canadian exploration expense in subsection 66.1(6) and the definitions qualifying business transfer and qualifying cooperative conversion in subsection 248(1), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; (2) Paragraph 87(2)(j.6) of the Act, as enacted by subsection (1), is replaced by the following: Continuing corporation (j.6) for the purposes of paragraphs 12(1)(t) and (x), subsections 12(2.2) and 13(7.1), (7.4) and (24), paragraphs 13(27)(b) and (28)(c), subsections 13(29) and 18(9.1), paragraphs 20(1)(e), (e.1), (v) and (hh), sections 20.1 and 32, paragraph 37(1)(c), subsection 39(13), subparagraphs 53(2)(c)(vi) and (h)(ii), paragraph 53(2)(s), subsections 53(2.1), 66(11.4), 66.7(11) and 84.1(2.31) and (2.32), sections 110.61 and 110.62, subsections 127(10.2), (10.31) and (10.32) , section 139.1, subsection 152(4.3), the determination of D in the definition undepreciated capital cost in subsection 13(21), the determination of L in the definition cumulative Canadian exploration expense in subsection 66.1(6) and the definitions qualifying business transfer and qualifying cooperative conversion in subsection 248(1), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; (3) Paragraph 87(2)(qq.1) of the Act is replaced by the following: Certain investment tax credits (qq.1) for the purposes of sections 127.44, 127.45, 127.48, 127.49 and 127.491 and Part XII.7, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation; (4) Paragraphs 87(8.3)(b) and (c) of the Act are replaced by the following: (b) the foreign merger is part of a transaction or event or a series of transactions or events that includes a disposition ( referred to in paragraph (c) as the “relevant disposition” ) of a property that is (i) a share of the capital stock of the new foreign corporation, (ii) property substituted for a share of the capital stock of the new foreign corporation, or (iii) property any of the fair market value of which is derived, directly or indirectly, from property referred to in subparagraph (i) or (ii); and (c) the relevant disposition is to a person or partnership (referred to in this subsection and subsection (8.31) as the “acquirer”) that (i) immediately after the transaction, event or series, deals at arm’s length with the taxpayer or a person that is , at any time during the period that begins at the time of the foreign merger and ends immediately after the transaction, event or series, a particular person in respect of the taxpayer, unless (A) the acquirer is a foreign affiliate of the taxpayer or of a successor corporation of the taxpayer in respect of which the taxpayer or the successor corporation , as the case may be, has a qualifying interest (within the meaning of paragraph 95(2)(m)) at the time of the transaction or event or throughout the series, or (B) at the time of the relevant disposition, the property that is disposed of is not excluded property (as defined in subsection 95(1)) of a foreign affiliate of the taxpayer, of a person that is, at any time during the period, a particular person in respect of the taxpayer or of a partnership, any member of which is, at any time during the period, the taxpayer or a particular person in respect of the taxpayer, or (ii) immediately after the relevant disposition, is a non-resident person or partnership that does not deal at arm’s length with the taxpayer or with a person that is, at any time during the period that begins at the time of the foreign merger and ends immediately after the relevant disposition, a particular person in respect of the taxpayer, unless (A) at the time of the transaction or event or throughout the series, the acquirer is a non-resident corporation that is, for the purposes of section 17, a controlled foreign affiliate of the taxpayer or of a successor corporation of the taxpayer, or (B) the relevant disposition is of a share of the capital stock of a corporation resident in Canada. (5) Section 87 of the Act is amended by adding the following after subsection (8.3): Interpretation — partnerships (8.31) In applying paragraph (8.3)(c), (a) a taxpayer or a particular person in respect of the taxpayer (each of which is referred to in this subsection as the “relevant taxpayer”) and an acquirer are deemed to be dealing with each other at arm’s length, at any time, for the purposes of subparagraph (8.3)(c)(i) if, (i) where either the relevant taxpayer or the acquirer is a partnership and the other party is not, any member of the partnership deals at arm’s length, at that time, with the other party, or (ii) where both the relevant taxpayer and the acquirer are partnerships, the relevant taxpayer or any member of the relevant taxpayer deals at arm’s length, at that time, with the acquirer or any member of the acquirer; (b) an acquirer is deemed to be a non-resident person with whom the relevant taxpayer does not deal at arm’s length, at any time, for the purposes of subparagraph (8.3)(c)(ii) if, (i) where either the relevant taxpayer or the acquirer is a partnership and the other party is not, (A) any member of the partnership does not deal at arm’s length, at that time, with the other party, and (B) the acquirer — or, where the acquirer is a partnership, any member of the acquirer — is a non-resident person at that time, or (ii) where both the relevant taxpayer and the acquirer are partnerships, (A) the relevant taxpayer or any member of the relevant taxpayer does not deal at arm’s length, at that time, with the acquirer or any member of the acquirer, and (B) any member of the acquirer is a non-resident person at that time; and (c) particular person and successor corporation have the same meanings as in subsection 85.1(4.2). (6) Subsection (1) is deemed to have come into force on January 1, 2024. (7) Subsection (2) applies to taxation years that begin on or after December 16, 2024. (8) Subsection (3) is deemed to have come into force on April 16, 2024. (9) Subsections (4) and (5) apply in respect of dispositions that occur on or after August 15, 2025.

24(1) Paragraph 88(1)(e.31) of the Act is replaced by the following: (e.31) for the purposes of sections 127.44, 127.45, 127.48, 127.49 and 127.491 and Part XII.7, at the end of any particular taxation year ending after the subsidiary was wound up, the parent is deemed to be the same corporation as, and a continuation of, the subsidiary; (2) Paragraph 88(2)(c) of the Act is replaced by the following: (c) for the purpose of computing the income of the corporation for its taxation year that includes the particular time, paragraph 12(1)(t) shall be read as follows: “ (t) the amount deducted under subsection 127(5) or (6), 127.44(3), 127.45(6), 127.48(3), 127.49(6) or 127.491(10) in computing the taxpayer’s tax payable for the year or a preceding taxation year to the extent that it was not included under this paragraph in computing the taxpayer’s income for a preceding taxation year or is not included in an amount determined under paragraph 13(7.1)(e) or 37(1)(e) or subparagraph 53(2)(c)(vi) to (vi.5) or (h)(ii) or the amount determined for I in the definition undepreciated capital cost in subsection 13(21) or L in the definition cumulative Canadian exploration expense in subsection 66.1(6);”. (3) Subsection 88(3.3) of the Act is replaced by the following: (3.3) For the purposes of paragraph (3)(a), if the liquidation and dissolution is a qualifying liquidation and dissolution of the disposing affiliate and the taxpayer would, in the absence of this subsection and, for greater certainty, after taking into account any election under subsection 93(1), realize a capital gain (the amount of which is referred to in subsection (3.4) as the “capital gain amount”) from the disposition of a disposed share, the taxpayer may elect, in accordance with prescribed rules, that distributed property that was, immediately before the disposition, capital property ( that is a share of the capital stock of another foreign affiliate of the taxpayer ) of the disposing affiliate be deemed to have been disposed of by the disposing affiliate to the taxpayer for proceeds of disposition equal to the amount claimed (referred to in subsection (3.4) as the “claimed amount”) by the taxpayer in the election. (4) Subsections (1) and (2) are deemed to have come into force on April 16, 2024. (5) Subsection (3) applies in respect of dispositions that occur on or after August 9, 2022.

25(1) The definition capital dividend account in subsection 89(1) of the Act is amended by striking out “and” at the end of paragraph (f), by adding “and” at the end of paragraph (g) and by adding the following after paragraph (g): (h) the total of all amounts each of which is, if the corporation was a Canadian-controlled private corporation throughout the year or a substantive CCPC at any time in the year, (i) an amount deductible under paragraph 113(1)(a.1) in computing the taxable income of the corporation for the particular taxation year in respect of a dividend received on a share of the capital stock of a foreign affiliate less the amount determined under sub-subclause 113(1)(a.1)(ii)(A)(II)1 in respect of the dividend, and (ii) the total of the amounts deductible under paragraphs 113(1)(b) and (c) in computing the taxable income of the corporation for the particular taxation year in respect of a dividend received on a share of the capital stock of a foreign affiliate if no election was made by the corporation for the particular taxation year under subsection 93.4(3) with respect to that amount (or, if an election was made under subsection 93.4(3), to the extent that the amount was determined under paragraph 93.4(3)(c)) (referred to in this subparagraph as the “low RTF amount”) less the amount determined under clause 113(1)(c)(i)(A) in respect of the low RTF amount, (2) Paragraph (b) of the description of E in the definition general rate income pool in subsection 89(1) of the Act is replaced by the following: (b) in the case of (i) a Canadian-controlled private corporation, (A) an amount deductible under paragraph 113(1)(a) or (d) or subsection 113(2) in computing the taxable income of the corporation for the particular taxation year in respect of a dividend received on a share of the capital stock of a foreign affiliate less the amount of non-business-income tax (as defined in subsection 126(7)) paid by the corporation to the government of a country other than Canada in respect of the dividend, and (B) if an election was made by the corporation under subsection 93.4(3) for the particular taxation year, the total of the amounts deductible under paragraphs 113(1)(b) and (c) in computing the taxable income of the corporation for the year in respect of a dividend received on a share of the capital stock of a foreign affiliate to the extent that the amount was determined under paragraph 93.4(3)(b) (referred to in this clause as the “high RTF amount”) less the amount determined under clause 113(1)(c)(i)(A) in respect of the high RTF amount, and (ii) a deposit insurance corporation, (A) an amount deductible under paragraph 113(1)(a) or (d) or subsection 113(2) in computing the taxable income of the corporation for the particular taxation year in respect of a dividend received on a share of the capital stock of a foreign affiliate less the amount of non-business-income tax (as defined in subsection 126(7)) paid by the corporation to the government of a country other than Canada in respect of the dividend, (B) an amount deductible under paragraph 113(1)(a.1) in computing the taxable income of the corporation for the particular taxation year in respect of a dividend received on a share of the capital stock of a foreign affiliate less the amount determined under sub-subclause 113(1)(a.1)(ii)(A)(II)1 in respect of the dividend, and (C) the total of the amounts deductible under paragraphs 113(1)(b) and (c) in computing the taxable income of the corporation for the particular taxation year in respect of a dividend received on a share of the capital stock of a foreign affiliate less the amount determined under clause 113(1)(c)(i)(A) in respect of the dividend, (3) Clause (b)(i)(A) of the description of E in the definition general rate income pool in subsection 89(1) of the Act, as enacted by subsection (2), is replaced by the following: (A) an amount deductible under paragraph 113(1)(a) in computing the taxable income of the corporation for the particular taxation year in respect of a dividend received on a share of the capital stock of a foreign affiliate less the amount of non-business-income tax (as defined in subsection 126(7)) paid by the corporation to the government of a country other than Canada in respect of the dividend, and (4) Clause (b)(ii)(A) of the description of E in the definition general rate income pool in subsection 89(1) of the Act, as enacted by subsection (2), is replaced by the following: (A) an amount deductible under paragraph 113(1)(a) in computing the taxable income of the corporation for the particular taxation year in respect of a dividend received on a share of the capital stock of a foreign affiliate less the amount of non-business-income tax (as defined in subsection 126(7)) paid by the corporation to the government of a country other than Canada in respect of the dividend, (5) Subsections (1) and (2) apply to taxation years that begin on or after April 7, 2022. (6) Subsections (3) and (4) apply to taxation years that begin on or after August 9, 2022.

26(1) Paragraph 93.1(1.1)(a) of the Act is replaced by the following: (a) subsections (2), (5), 20(12) and 39(2.1), sections 90, 93, 93.3, 93.4 (other than subsection 93.4(2) ) and 113, paragraphs 128.1(1)(c.3) and (d), section 212.3, subsection 219.1(2) and section 233.4; (2) Paragraph 93.1(3)(c) of the Act is replaced by the following: (c) subsections 39(2.1), 40(3.6), 85.1(4.1) and 87(8.31) . (3) Subsection (1) applies to taxation years that begin after 2025. Subsection (1) also applies to preceding taxation years if an election is filed under subsection 93.4(4) or (5) of the Act. (4) Subsection (2) is deemed to have come into force on August 15, 2025.

27(1) The Act is amended by adding the following after section 93.3: 93.4 (1) The following definitions apply in this section. FABI surplus , of a foreign affiliate (referred to in this definition as the “subject affiliate”) of a corporation at any time, means the amount that would be the subject affiliate’s taxable surplus (as defined in subsection 5907(1) of the Income Tax Regulations ) at that time if (a) the amount included in subparagraph (iii) of the description of A in the definition taxable surplus in subsection 5907(1) of the Income Tax Regulations in respect of the portion of any dividend received by the subject affiliate that is prescribed to be paid out of the taxable surplus of the foreign affiliate that paid the dividend were equal to the lesser of (i) that portion, and (ii) the proportion of the payer affiliate’s FABI surplus at the time the dividend was paid that the dividend received is of the whole dividend referred to in paragraph 5900(1)(b) of those Regulations; (b) the amount included in subparagraph (iv) of the description of B in the definition taxable surplus in subsection 5907(1) of the Income Tax Regulations in respect of any whole dividend paid by the subject affiliate were equal to the lesser of (i) the portion of the whole dividend deemed under paragraph 5901(1)(b) of those Regulations to be paid out of the subject affiliate’s taxable surplus, and (ii) the subject affiliate’s FABI surplus at that time; and (c) the only other amounts taken into consideration in determining the subject affiliate’s taxable surplus were amounts that are included in computing (i) the subject affiliate’s net earnings (as defined in subsection 5907(1) of the Income Tax Regulations ) (A) in respect of foreign accrual property income that can reasonably be considered to be attributable to its foreign accrual business income in respect of which an election has been made under subsection (2), or (B) from an active business carried on by it in a country, and (ii) the subject affiliate’s net loss (as defined in subsection 5907(1) of the Income Tax Regulations ) (A) in respect of foreign accrual property income that can reasonably be considered to be attributable to its foreign accrual business income, or (B) from an active business carried on by it in a country. ( surplus REATE ) foreign accrual business income , of a foreign affiliate of a taxpayer, for any taxation year of the affiliate, means the amount that would be its foreign accrual property income for the year if that amount were determined (a) taking into consideration only amounts that (i) would not be included in the computation of the affiliate’s aggregate investment income (as defined in subsection 129(4)) if (A) the affiliate were, at all times, a Canadian-controlled private corporation, and (B) all amounts that were included in the computation of the affiliate’s foreign accrual property income for the taxation year were from a source in Canada, and (ii) are not derived from an amount paid or payable, directly or indirectly, by a person or partnership (in this definition referred to as the “payer”) to the affiliate or to a partnership of which the affiliate was a member where (A) the payer is (I) a Canadian-controlled private corporation or a substantive CCPC, (II) a corporation carrying on a personal services business, (III) an individual resident in Canada, (IV) a foreign affiliate (in this definition referred to as the “payer affiliate”) of 1 any taxpayer of whom the affiliate is a foreign affiliate, or 2 another taxpayer who does not deal at arm’s length with the affiliate or any taxpayer of whom the affiliate is a foreign affiliate, or (V) a partnership, if any person that is a member of the partnership, directly or indirectly through one or more partnerships, is described in any of subclauses (I) to (IV) (each of which is referred to in this definition as a “relevant member”), (B) if the payer – or where subclause (A)(V) applies, a relevant member – is a person described in any of subclauses (A)(I) to (IV), the payer or relevant member (I) is a taxpayer of whom the affiliate is a foreign affiliate, or (II) does not deal at arm’s length with 1 the affiliate, or 2 any taxpayer of whom the affiliate is a foreign affiliate, and (C) the amount paid or payable (I) if the payer or a relevant member is a person described in subclause (A)(I), is deductible in computing the aggregate investment income or reduces the tax otherwise payable under section 123.3 for a taxation year of the payer or the relevant member, as the case may be, (II) if the payer or a relevant member is a person described in subclause (A)(II) or (III), is deductible in computing the income for a taxation year of the payer or the relevant member, as the case may be, and (III) if the payer or a relevant member is a person described in subclause (A)(IV), is deductible in computing the foreign accrual property income, other than foreign accrual business income, for a taxation year of the payer affiliate or the relevant member, as the case may be; and (b) on the basis that (i) sections 5903 and 5903.1 of the Income Tax Regulations were applied, in the manner set out in subparagraph (ii), taking into account only amounts described in paragraph (a), and (ii) the total of the prescribed amounts for the year under subsections 5903(1) and 5903.1(1) of the Income Tax Regulations were the lesser of (A) the affiliate’s foreign accrual property income for the year determined taking into account only amounts described under paragraph (a) and without regard to any amount determined for F and F.1 in the formula in the definition foreign accrual property income in subsection 95(1) for the year, and (B) the total of the maximum amounts permitted to be designated under subsections 5903(1) and 5903.1(1) of the Income Tax Regulations for the year. ( revenu étranger accumulé, tiré d’une entreprise) underlying FABI surplus tax , of a foreign affiliate of a corporation in respect of the corporation, at any time, means the portion of the underlying foreign tax (as defined in subsection 5907(1) of the Income Tax Regulations ) of the affiliate in respect of the corporation at that time that can reasonably be regarded as applicable in respect of the affiliate’s FABI surplus. ( montant intrinsèque d’impôt REATE ) Amounts deductible under subsection 91(4) (2) If a taxpayer is a Canadian-controlled private corporation or a substantive CCPC at any time in a taxation year, or is a partnership all the members of which (other than non-resident persons) are corporations in the year, and the taxpayer files an election in prescribed form and manner by the taxpayer’s filing-due date for the year (or, if the taxpayer is a partnership, on or before the day on which a return is required by section 229 of the Income Tax Regulations to be filed in respect of the year or would be required to so be filed if that section applied to the partnership) for the purpose of determining the amount deductible by the taxpayer in computing its income for the year under subsection 91(4) in respect of an income amount (within the meaning of that subsection) in respect of a share of the capital stock of a controlled foreign affiliate of the taxpayer, (a) the amount deductible under subsection 91(4) in respect of the portion of the income amount that may reasonably be regarded as attributable to the foreign accrual business income of any controlled foreign affiliate (in this subsection referred to as the “FABI amount”) is to be determined separately from the amount deductible under subsection 91(4) in respect of the portion of the income amount other than the FABI amount (in this subsection referred to as the “excess amount”); and (b) in determining each of the amounts referred to in paragraph (a), (i) the amount deductible under subsection 91(4) in respect of the FABI amount is to be determined as though (A) the references in subsection 91(4) to the “income amount” were references to the “FABI amount”, and (B) paragraph (a) of the definition relevant tax factor in subsection 95(1) were read without the references to “(other than a Canadian-controlled private corporation or a corporation that is a substantive CCPC at any time in the year)”, and (ii) the amount deductible under subsection 91(4) in respect of the excess amount is to be determined as though the references in subsection 91(4) to the “income amount” were references to the “excess amount”. Dividends from foreign affiliates (3) If, at any particular time in a taxation year, a corporation that is a Canadian-controlled private corporation or a substantive CCPC at any time in the year (referred to in this subsection as the “recipient corporation”) receives a dividend on a share owned by it of the capital stock of a foreign affiliate of the recipient corporation, any portion of the dividend is prescribed to be paid out of taxable surplus of the affiliate (referred to in this subsection as the “taxable surplus dividend”) and an election is made by the recipient corporation in prescribed form and manner by its filing-due date for the taxation year, paragraphs 113(1)(b) and (c) and any regulations made for the purposes of those provisions are to be applied to the taxable surplus dividend as follows: (a) the portion of the taxable surplus dividend that is considered to be paid out of the affiliate’s FABI surplus (referred to in this subsection as the “FABI surplus dividend”) is equal to the lesser of (i) the taxable surplus dividend, and (ii) the proportion of the foreign affiliate’s FABI surplus at the time of the dividend payment that the dividend is of the whole dividend referred to in subparagraph 5900(1)(b)(ii) of the Income Tax Regulations ; (b) the amounts deductible by the recipient corporation under paragraphs 113(1)(b) and (c) in respect of the FABI surplus dividend are determined as though (i) each reference to “such portion of the dividend as is prescribed to have been paid out of taxable surplus” in subparagraph 113(1)(b)(i), clause 113(1)(c)(i)(A) and subparagraph 113(1)(c)(ii) and the reference to “that portion of the dividend” in subparagraph 113(1)(b)(ii) were a reference to “the FABI surplus dividend”, (ii) the reference to the “foreign tax prescribed to be applicable” in paragraph 113(1)(b) were a reference to the amount that would be the underlying foreign tax applicable (as defined in subsection 5907(1) of the Income Tax Regulations ) in respect of the recipient corporation to the whole dividend if that amount consisted solely of the affiliate’s underlying FABI surplus tax at the particular time in respect of the recipient corporation, and (iii) the definition relevant tax factor in subsection 95(1) were read without reference to the words “(other than a Canadian-controlled private corporation or a corporation that is a substantive CCPC at any time in the year)”; and (c) the amounts deductible under paragraphs 113(1)(b) and (c) in respect of the portion of the taxable surplus dividend other than the FABI surplus dividend are determined as though (i) each reference to “such portion of the dividend as is prescribed to have been paid out of taxable surplus” in subparagraph 113(1)(b)(i), clause 113(1)(c)(i)(A) and subparagraph 113(1)(c)(ii) and the reference to “that portion of the dividend” in subparagraph 113(1)(b)(ii) refer to the portion of the taxable surplus dividend other than the FABI surplus dividend, and (ii) the reference to “the foreign tax prescribed to be applicable to such portion of the dividend” in subparagraph 113(1)(b)(i) refers to the foreign affiliate’s underlying foreign tax applicable (as defined in subsection 5907(1) of the Income Tax Regulations ) determined without regard to the affiliate’s underlying FABI surplus tax. Pre-2023 taxation years (4) An election is deemed to have been timely made by a taxpayer under subsection (2) for each of its taxation years that begin before April 7, 2022, if (a) an election is made by the taxpayer in prescribed form and manner on or before the filing-due date for the taxpayer’s first taxation year that begins after 2025, or (b) where the taxpayer is a partnership, an election is made, by or on behalf of the partnership, in prescribed form and manner on or before the day on which a return is required by section 229 of the Income Tax Regulations to be filed in respect of the first fiscal period that begins after 2025 or would be required to be filed if that section applied to the partnership. Pre-2026 taxation years (5) An election is deemed to have been timely made by a taxpayer under subsection (2), and under subsection (3) as applicable, for each of its taxation years that begin after April 6, 2022 and before 2026, if (a) an election is made by the taxpayer in prescribed form and manner on or before the filing-due date for the taxpayer’s first taxation year that begins after 2025, or (b) where the taxpayer is a partnership, an election is made, by or on behalf of the partnership, in prescribed form and manner on or before the day on which a return is required by section 229 of the Income Tax Regulations to be filed in respect of the first fiscal period that begins after 2025 or would be required to be filed if that section applied to the partnership. Tax-free surplus balance computation (6) If a taxpayer has made an election under this section in respect of any taxation year, the tax-free surplus balance (as defined in subsection 5905(5.5) of the Income Tax Regulations ) of a foreign affiliate of the taxpayer (or, if the taxpayer is a partnership, a foreign affiliate of a member of the partnership) at any time in the taxation year and any subsequent taxation year is to be determined as if subparagraph 5905(5.5)(b)(i) of the Income Tax Regulations were read as follows: (i) the amount, if any, determined by the formula A + B where A is the lesser of (A) the amount, if any, determined by the formula C × D where C is the affiliate’s underlying FABI surplus tax (as defined in subsection 93.4(1) of the Act) in respect of the corporation at that time, and D is the amount by which the amount that would be the corporation’s relevant tax factor (as defined in subsection 95(1) of the Act) for the corporation’s taxation year that includes that time if it were determined under paragraph (a) of that definition, exceeds one, and (B) the affiliate’s FABI surplus (as defined in subsection 93.4(1) of the Act) in respect of the corporation at that time, and B is the lesser of (A) the amount, if any, determined by the formula E × F where E is the affiliate’s underlying foreign tax other than its underlying FABI surplus tax (as defined in subsection 93.4(1) of the Act) in respect of the corporation at that time, and F is the amount by which the corporation’s relevant tax factor (as defined in subsection 95(1) of the Act) for the corporation’s taxation year that includes that time, exceeds one, and (B) the affiliate’s taxable surplus other than its FABI surplus (as defined in subsection 93.4(1) of the Act) in respect of the corporation at that time, and

28(1) Subparagraph 94.2(2)(a)(i) of the Act is replaced by the following: (i) that is controlled by each of the beneficiary and the particular person, unless the condition in paragraph (1)(b) is met only because the condition in subparagraph (1)(b)(i) is met in respect of one or more classes of fixed interests that are tracking interests (within the meaning assigned by subsection 95(8)) in respect of the trust, and (2) Section 94.2 of the Act is amended by adding the following after subsection (4): (5) If the condition in subparagraph (1)(b)(i) is met at any time in a taxation year in respect of a particular class of fixed interests of a trust that are tracking interests (within the meaning assigned by subsection 95(8)) in respect of the trust, and subsection 95(11) would apply in the absence of subsection 95(13) in respect of the trust for the taxation year, (a) despite subsection 95(13), subsection 95(11) applies in respect of the trust for the year; (b) the separate corporation described in subsection 95(11) in respect of those tracking interests is deemed to be controlled by each of the beneficiary and the particular person referred to in subsection (1) in respect of the trust at that time; and (c) subsection (3) applies to that separate corporation, with such modifications as the context requires, as if that separate corporation were a trust referred to in paragraph (2)(a), for the purpose of determining the amount to be included under subsection 91(1) by the beneficiary or particular person in respect of shares of the capital stock of the separate corporation for the year. (3) Subsections (1) and (2) apply to taxation years of trusts that begin after February 26, 2018.

29(1) Paragraph (b) of the description of A in the definition foreign accrual property income in subsection 95(1) of the Act is replaced by the following: (b) a dividend from another foreign affiliate of the taxpayer, (i) if that other affiliate is resident in the same country as the affiliate, or (ii) to the extent that the amount of the dividend exceeds the amount that would be the deduction/non-inclusion mismatch arising from the dividend under paragraph 18.4(7)(c) if (A) subsection 18.4(6) were read without reference to its paragraph (a) and subparagraph (i) of the description of D in its paragraph (b), and (B) the amount determined for C in the definition foreign ordinary income in subsection 18.4(1) were deemed to be nil, (2) Paragraph (a) of the description of H in the definition foreign accrual property income in subsection 95(1) of the Act is replaced by the following: (a) if the affiliate was a member of a partnership at the end of the fiscal period of the partnership that ended in the year and the partnership received a dividend at a particular time in that fiscal period from a corporation ( in this paragraph referred to as the “payer affiliate” ) that would be, if the reference in subsection 93.1(1) to “corporation resident in Canada” were a reference to “taxpayer resident in Canada”, a foreign affiliate of the taxpayer for the purposes of sections 93 and 113 at that particular time, the amount by which the portion of the dividend that is included in the value determined for A in respect of the affiliate for the year and that would be, if the reference in subsection 93.1(2) to “corporation resident in Canada” were a reference to “taxpayer resident in Canada”, deemed by paragraph 93.1(2)(a) to have been received by the affiliate for the purposes of sections 93 and 113 exceeds (i) if the affiliate and the payer affiliate are resident in the same country, nil, and (ii) in any other case, the amount that would be the deduction/non-inclusion mismatch arising from that portion of the dividend under paragraph 18.4(7)(c), if (A) subsection 18.4(6) were read without reference to its paragraph (a) and subparagraph (i) of the description of D in its paragraph (b), and (B) the amount determined for C in the definition foreign ordinary income in subsection 18.4(1) were deemed to be nil, and (3) The portion of paragraph (a) of the definition relevant tax factor in subsection 95(1) of the Act before the formula is replaced by the following: (a) in the case of a corporation ( other than a Canadian-controlled private corporation or a corporation that is a substantive CCPC at any time in the year ), or of a partnership all the members of which, other than non-resident persons, are corporations ( other than Canadian-controlled private corporations or corporations that are substantive CCPCs at any time in the year ), the quotient obtained by the formula (4) Subparagraph 95(2)(d.1)(ii) of the Act is amended by striking out “and” at the end of clause (B) and by adding the following after clause (C): (D) subsections 85.1(4) and 87(8.3) in respect of a disposition of property to the new foreign corporation, and (5) Clause 95(2)(e)(v)(A) of the Act is amended by striking out “and” at the end of subclause (II) and by adding the following after subclause (III): (IV) subsections 85.1(4) and 87(8.3) in respect of a disposition of property to the shareholder affiliate, and (6) The portion of subsection 95(11) of the Act before paragraph (a) is replaced by the following: (11) If this subsection applies in respect of a foreign affiliate (referred to in this subsection as the “actual affiliate”), other than a controlled foreign affiliate , of a taxpayer for a taxation year of the actual affiliate, the following rules apply for the purpose of determining the amounts, if any, to be included under subsection 91(1), and to be deducted under subsection 91(4), by the taxpayer in respect of the year and for the purpose of applying section 233.4 in respect of the year: (7) Section 95 of the Act is amended by adding the following after subsection (12): Exception — no avoidance purpose (13) Subsections (11) and (12) apply in respect of a foreign affiliate of a taxpayer for a taxation year only if it can reasonably be considered that one of the purposes for the creation or issuance, or for the acquisition or holding, of a tracking interest in respect of the affiliate that is acquired or held by the taxpayer or another foreign affiliate of the taxpayer is to avoid, prevent or defer the inclusion of any amount in the income of the taxpayer under subsection 91(1). (8) Subsections (1) and (2) apply in respect of any dividend received on or after July 1, 2024. (9) Subsection (3) applies to taxation years that begin on or after April 7, 2022. (10) Subsections (4) and (5) apply in respect of dispositions that occur on or after August 15, 2025. (11) Subsections (6) and (7) apply to taxation years of a foreign affiliate of a taxpayer that begin after February 26, 2018.

30(1) Subparagraph 96(2.1)(b)(ii) of the Act is replaced by the following: (ii) the amount required by subsection 127(8), 127.44(11), 127.45(8), 127.48(12), 127.49(8) or 127.491(12) in respect of the partnership to be added in computing the investment tax credit, the CCUS tax credit (as defined in subsection 127.44(1)), the clean technology investment tax credit (as defined in subsection 127.45(1)), the clean hydrogen tax credit (as defined in subsection 127.48(1)), the CTM investment tax credit (as defined in subsection 127.49(1)) or the clean electricity investment tax credit (as defined in subsection 127.491(1) ) of the taxpayer for the taxation year, (2) The portion of subsection 96(2.2) of the Act before paragraph (a) is replaced by the following: (2.2) For the purposes of this section and sections 111, 127, 127.44, 127.45, 127.47, 127.48, 127.49 and 127.491 , the at-risk amount of a taxpayer, in respect of a partnership of which the taxpayer is a limited partner, at any particular time is the amount, if any, by which the total of (3) The portion of subsection 96(2.4) of the Act before paragraph (a) is replaced by the following: Limited partner (2.4) For the purposes of this section and sections 111, 127, 127.44, 127.45, 127.47, 127.48, 127.49 and 127.491 , a taxpayer who is a member of a partnership at a particular time is a limited partner of the partnership at that time if the member’s partnership interest is not an exempt interest (within the meaning assigned by subsection (2.5)) at that time and if, at that time or within three years after that time, (4) Subsections (1) to (3) are deemed to have come into force on April 16, 2024.

31(1) Subsection 104(1) of the Act is replaced by the following: 104 (1) In this Act, a reference to a trust or estate (in this Subdivision referred to as a “trust”) shall, unless the context otherwise requires, be read to include a reference to the trustee, executor, administrator, liquidator of a succession, heir or other legal representative having ownership or control of the trust property, but, except for the purposes of this subsection, subsection (1.1), subparagraph (b)(v) of the definition disposition in subsection 248(1) and paragraph (k) of that definition, a trust is deemed not to include an arrangement under which the trust can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust’s property unless the trust is described in any of paragraphs (a) to (e.1) of the definition trust in subsection 108(1).

32(1) Paragraph 107.4(2)(b) of the Act is replaced by the following: (b) where a trust (in this paragraph referred to as the “transferor”) governed by an arrangement that is a FHSA , a registered retirement savings plan or a registered retirement income fund transfers a property to a trust (in this paragraph referred to as the “transferee”) governed by such an arrangement , the transfer is deemed not to result in a change in the beneficial ownership of the property if the annuitant or holder of the arrangement that governs the transferor is also the annuitant or holder of the arrangement that governs the transferee. (2) Subsection (1) is deemed to have come into force on April 1, 2023.

33(1) The portion of clause 110(1)(d)(i)(B) of the Act before subclause (I) is replaced by the following: (B) in the case of a benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer, within the first three taxation years of the graduated rate estate of the taxpayer, by (2) Subsection (1) applies to taxation years of individuals who died on or after August 12, 2024.

34Section 110.1 of the Act is amended by adding the following after subsection (17): (18) For the purposes of applying this section, a gift made by a taxpayer before March 2025 and after the end of a taxation year of the taxpayer that ended after November 14, 2024 and before 2025 (referred to in this subsection as the “donation year”) is deemed to have been made by the taxpayer in the donation year and not in the taxpayer’s 2025 taxation year if (a) the gift would be deductible under this section in computing the taxpayer’s taxable income under this Part for the donation year if it were made immediately before the end of that year; (b) the taxpayer deducts the amount of the gift under this section for the taxpayer’s donation year; and (c) the gift was in the form of cash or was transferred by way of cheque, credit card, money order or electronic payment.

35(1) Paragraph (a) of the description of A in the definition annual gains limit in subsection 110.6(1) of the Act is replaced by the following: (a) the amount determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and capital losses ( except any portion related to a deduction claimed by the individual in the year under subsection 110.61(2) or 110.62(2) ), and (2) Subparagraph (a)(ii) of the description of B in the definition annual gains limit in subsection 110.6(1) of the Act is replaced by the following: (ii) the amount, if any, by which the amount determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and capital losses ( except any portion related to a deduction claimed by the individual in the year under subsection 110.61(2) or 110.62(2) ) exceeds the amount determined for A in respect of the individual for the year, and (3) Paragraph (b) of the description of B in the definition annual gains limit in subsection 110.6(1) of the Act is replaced by the following: (b) all of the individual’s allowable business investment losses for the year ( except any portion that reduced the amount otherwise deductible by the individual in the year under subsection 110.61(2) or 110.62(2) ); ( plafond annuel des gains ) (4) Paragraph (a) of the definition cumulative net investment loss in subsection 110.6(1) of the Act is replaced by the following: (a) the total of all amounts each of which is the investment expense of the individual for the year or a preceding taxation year ending after 1987 ( except any portions included in subparagraph (ii) of the description of H in paragraph 110.61(2)(b) and subparagraph (ii) of the description of H in paragraph 110.62(2)(b) to the extent they reduced the amount otherwise deductible by the individual under each of subsections 110.61(2) and 110.62(2) ) (5) The first formula in paragraph 110.6(2)(a) of the Act is replaced by the following: [$ 625,000 − (A + B + C + D)] × E (6) Subsection 110.6(2.2) of the Act is replaced by the following: (2.2) In computing the taxable income of an individual (other than a trust) for the individual’s taxation year t hat includes June 25, 2024 (referred to in this subsection as the “transition year”), there may be deducted, where that individual was resident in Canada throughout the transition year and that individual disposed of in the transition year, and on or after June 25, 2024, a qualified small business corporation share of the individual or a qualified farm or fishing property of the individual, such amount as the individual may claim not exceeding the least of (a) $116,582 , (b) the amount, if any, by which the individual’s cumulative gains limit at the end of the transition year exceeds the total of all amounts each of which is an amount deducted by the individual under subsection (2) or (2.1) in computing the individual’s taxable income for the transition year, (c) the amount, if any, by which the individual’s annual gains limit for the transition year exceeds the total of all amounts each of which is an amount deducted by the individual under subsection (2) or (2.1) in computing the individual’s taxable income for the transition year, and (d) the amount that would be determined in respect of the individual for the transition year under paragraph 3(b) in respect of capital gains and capital losses if the only properties referred to in that paragraph were qualified small business corporation shares of the individual and qualified farm or fishing properties of the individual , disposed of by the individual on or after June 25, 2024 . (7) Section 110.6 of the Act is amended by adding the following after subsection (31): Application of subsection (33) — 2025 (32) Subsection (33) applies to an individual for the 2025 taxation year, if (a) in the taxation year the individual has a taxable capital gain from the disposition, before June 25, 2024, by a partnership with a fiscal period that begins before June 25, 2024 and ends after 2024 or a trust with a taxation year that begins before June 25, 2024 and ends after 2024, of a qualified small business corporation share of the individual or a qualified farm or fishing property of the individual; and (b) the total of all amounts each of which is an amount of a taxable capital gain of the individual described in paragraph (a) exceeds the amount that would be determined under paragraph (2)(a) in respect of the individual for the taxation year if the reference to “$625,000” in that paragraph read as “$522,145” (the amount of which excess is referred to in subsection (33) as the “denied excess”). Deduction denied — 2025 (33) Despite subsections (2) to (2.2), if this subsection applies to an individual for a taxation year, no amount may be deducted under this section for the taxation year by the individual in respect of the individual’s taxable capital gains for the year described in paragraph (32)(a) to the extent of the denied excess. (8) Subsections (1) to (4) apply in respect of dispositions that occur on or after August 12, 2024. (9) Subsection (5) applies to taxation years that begin after 2024. (10) Subsections (6) and (7) apply to taxation years that begin after 2023.

36(1) Paragraph 110.61(1)(a) of the Act is replaced by the following: (a) no individual has prior to the disposition time sought a deduction under this section or section 110.62 in respect of a disposition of shares that, at the time of that disposition, derived their value directly or indirectly , from an active business that is also relevant to the determination of whether the disposition of the subject shares satisfies the condition set out in paragraph (a) of the definition qualifying business transfer in subsection 248(1); (2) Subparagraphs 110.61(1)(b)(i) and (ii) of the Act are replaced by the following: (i) the subject shares were not owned by anyone other than the individual or a person or partnership related to the individual, except that if, at any time in the 24-month period immediately preceding the disposition time, the subject shares were substituted for other shares (in this paragraph referred to as the “substituted shares”), the subject shares shall be considered to have met the requirements of this subparagraph only where the substituted shares were not owned by any person or partnership other than a person or partnership described in this subparagraph throughout the period beginning 24 months before the disposition time and ending at the time of substitution, and (ii) more than 50% of the fair market value of the subject shares and the substituted shares, if any , was derived, directly or indirectly , from assets which were used principally in an active business; (3) Subparagraph 110.61(1)(d)(ii) of the Act is replaced by the following: (ii) throughout any 24-month period ending before the disposition time, the individual, or a spouse or common-law partner of the individual, was actively engaged on a regular, continuous and substantial basis ( including within the meaning of paragraph 120.4(1.1)(a) ) in the activities of the business that is relevant to the determination of whether the subject shares satisfy the condition set out in paragraph (a) of the definition qualifying business transfer in subsection 248(1), and (4) Paragraphs 110.61(2)(a) and (b) of the Act are replaced by the following: (a) the amount determined by the formula A × B × C − D where A is the elected amount (within the meaning of clause (1)(e)(ii)(A)) included in the joint election referred to in paragraph (1)(e), B is (i) 1, if only one individual is entitled to a deduction under this subsection in respect of the qualifying business transfer, (ii) the percentage assigned to the individual in the joint election referred to in paragraph (1)(e), if a percentage is assigned to the individual in accordance with clause (1)(e)(ii)(B), and (iii) in any other case, nil, C is the fraction of the taxpayer’s capital gain from the disposition of the subject shares that is a taxable capital gain under paragraph 38(a) that applies to the subject shares in the year, and D is the total of each amount claimed by the taxpayer under this subsection in a prior taxation year in respect of the disposition of the subject shares multiplied by the amount determined by the formula E ÷ F where E is the fraction of a capital gain that is a taxable capital gain under paragraph 38(a) in the current year, and F is the fraction of a capital gain that is a taxable capital gain under paragraph 38(a) in the prior year in respect of the disposition of the subject shares; and (b) the amount determined by the formula G − H where G is the lesser of (i) the amount determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and losses (except any portion related to a deduction previously claimed by the individual in the year under this subsection), and (ii) the amount that would be determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and losses if the only properties referred to in that paragraph were the subject shares, and H is the total of (i) the individual’s allowable business investment losses for the year (except any portion that previously reduced the amount otherwise deductible by the individual in the year under this subsection), (ii) the amount, if any, by which the individual’s investment expense for the year exceeds the individual’s investment income for the year (except any portion of the excess that previously reduced the amount otherwise deductible by the individual in the year under this subsection), and for the purposes of this subparagraph, (A) investment expense of an individual for a year, has the same meaning as in subsection 110.6(1), except that the reference to “amount determined in respect of the individual for the year under paragraph (a) of the description of B in the definition annual gains limit ” in paragraph (f) of that definition is to be read as “total of all amounts determined in respect of the individual for the year under subparagraph (iii) of the description of H in subsection 110.61(2) (to the extent that amount reduces the amount otherwise deductible under that subsection)”, and (B) investment income of an individual for a year, has the same meaning as in subsection 110.6(1), except that the reference to “amount determined in respect of the individual for the year for A in the definition annual gains limit ” in paragraph (f) of that definition is to be read as “total of all amounts determined in respect of the individual for the year for the description of G in subsection 110.61(2) (except any amount that previously reduced the amount otherwise deductible by the individual in the year under subsection 110.61(2))”, and (iii) the amount, if any, by which (A) the individual’s net capital losses for other taxation years deducted under paragraph 111(1)(b) in computing the individual’s taxable income for the year exceeds (B) the amount, if any, by which the amount determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and capital losses (except any portion related to a deduction previously claimed by the individual in respect of other subject shares under this subsection) exceeds the amount determined for G. (5) Section 110.61 of the Act is amended by adding the following after subsection (2): (2.1) If an individual claims more than one deduction under subsection (2) in a taxation year, the individual is to designate the order in which the deductions are claimed, and if the individual does not designate an order, the Minister may designate the order. (6) Paragraph 110.61(3)(b) of the Act is replaced by the following: (b) the time that is the beginning of the taxation year of a qualifying business of the trust in which less than 50% of the fair market value of the shares of the qualifying business is derived, directly or indirectly, from assets used principally in an active business carried on by one or more qualifying businesses controlled by the trust at both that time and at the beginning of the preceding taxation year of the qualifying business ( unless the active business has ceased to be carried on at that time due to the disposition of all the assets that were used to carry on the business in order to satisfy debts owed to creditors of the trust or of the qualifying business ). (7) Paragraph 110.61(4)(b) of the Act is replaced by the following: (b) within eight years of the day that is 24 months after the disposition time for the qualifying business transfer, in computing the income of the trust that participated in the qualifying business transfer, the trust is deemed to have a gain equal to the elected amount (within the meaning of clause (1)(e)(ii)(A)) included in the joint election referred to in paragraph (1)(e), for the year in which the disqualifying event occurs, from the disposition of a capital property. (8) Subsection 110.61(11) of the Act is amended by adding the following after paragraph (b): (b.1) a spouse or common-law partner of a particular individual includes another individual who was a spouse or common-law partner of the particular individual immediately before the death of the other individual; (9) Subsections (1) to (3) and (6) to (8) are deemed to have come into force on January 1, 2024. (10) Subsections (4) and (5) are deemed to have come into force on August 12, 2024.

37(1) The Act is amended by adding the following after section 110.61: 110.62 (1) Subsection (2) applies to an individual (other than a trust) if, at the time of a disposition (referred to in this section as the “disposition time”) of shares of the capital stock (referred to in this section as the “subject shares”) of a corporation (referred to in this section as the “subject corporation”) to another corporation (referred to in this section as the “purchaser corporation”) that occurred after 2023 and before 2027 under a qualifying cooperative conversion, the following conditions are met: (a) no individual has prior to the disposition time sought a deduction under this section or section 110.61 in respect of a disposition of shares that, at the time of that disposition, derived their value directly or indirectly, from an active business that is also relevant to the determination of whether the disposition of the subject shares satisfies the condition set out in paragraph (a) of the definition qualifying cooperative conversion in subsection 248(1); (b) throughout the 24 months immediately preceding the disposition time, (i) the subject shares were not owned by anyone other than the individual or a person or partnership related to the individual, except that if, at any time in the 24-month period immediately preceding the disposition time, the subject shares were substituted for other shares (in this paragraph referred to as the “substituted shares”), the subject shares shall be considered to have met the requirements of this subparagraph only where the substituted shares were not owned by any person or partnership other than a person or partnership described in this subparagraph throughout the period beginning 24 months before the disposition time and ending at the time of substitution, and (ii) more than 50% of the fair market value of the subject shares and the substituted shares, if any, was derived directly or indirectly from assets which were used principally in an active business; (c) immediately before the disposition time, (i) the subject corporation and each corporation affiliated with the subject corporation in which the subject corporation owns (directly or indirectly) shares is not a professional corporation, and (ii) the purchaser corporation is not established for the purposes of providing employment to its members who are its employees at that time (excluding any officer or director of the purchaser corporation) or the employees of another corporation controlled by the purchaser corporation; (d) at the disposition time, (i) the individual is at least 18 years of age, (ii) throughout any 24-month period ending before the disposition time, the individual, or a spouse or common-law partner of the individual, was actively engaged on a regular, continuous and substantial basis (including within the meaning of paragraph 120.4(1.1)(a)) in the activities of the business that is relevant to the determination of whether the subject shares satisfy the condition set out in paragraph (a) of the definition qualifying cooperative conversion in subsection 248(1), and (iii) the purchaser corporation is a worker cooperative, of which at least 75% of its (A) qualifying cooperative workers described in paragraph (d) of the definition worker cooperative in subsection 248(1) are resident in Canada, and (B) individual employee members described in paragraph (e) of the definition worker cooperative in subsection 248(1) are resident in Canada; and (e) the purchaser corporation, the individual and any other individual entitled to a deduction under subsection (2) in respect of the qualifying cooperative conversion (i) jointly elect, in prescribed form, for the deduction provided under subsection (2) to apply in respect of the disposition of the subject shares, (ii) include the following information in the election: (A) an amount (in this paragraph referred to as the “elected amount”) equal to the total amount of capital gains that the parties agree may be eligible for a deduction under subsection (2) with respect to the qualifying cooperative conversion, not exceeding $10,000,000, and (B) if more than one individual is eligible for a deduction in respect of the qualifying cooperative conversion, the percentage of the elected amount that is assigned to each eligible individual (provided that the total percentages assigned to all individuals cannot exceed 100%), and (iii) file the election with the Minister on or before the earlier of the individual’s and the worker cooperative’s filing-due date for the taxation year that includes the disposition time. Capital gains deduction — qualifying cooperative conversions (2) If this subsection applies to an individual, in computing the taxable income for a taxation year of the individual, there may be deducted such amount as the individual may claim not exceeding the least of (a) the amount determined by the formula A × B × C − D where A is the elected amount (within the meaning of clause (1)(e)(ii)(A)) included in the joint election referred to in paragraph (1)(e), B is (i) 1, if only one individual is entitled to a deduction under this subsection in respect of the qualifying cooperative conversion, (ii) the percentage assigned to the individual in the joint election referred to in paragraph (1)(e), if a percentage is assigned to the individual in accordance with clause (1)(e)(ii)(B), and (iii) in any other case, nil, C is the fraction of the taxpayer’s capital gain from the disposition of the subject shares that is a taxable capital gain under paragraph 38(a) that applies to the subject shares in the year, and D is the total of each amount claimed by the taxpayer under this subsection in a prior taxation year in respect of the disposition of the subject shares multiplied by the amount determined by the formula E ÷ F where E is the fraction of a capital gain that is a taxable capital gain under paragraph 38(a) in the current year, and F is the fraction of a capital gain that is a taxable capital gain under paragraph 38(a) in the prior year in respect of the disposition of the subject shares; and (b) the amount that would be determined in respect of the individual for the year under paragraph 3(b) (to the extent that that amount is not included in computing an amount determined under paragraph 110.6(2)(d) or (2.1)(d) for the individual) in respect of capital gains and capital losses if the only properties referred to in paragraph 3(b) were the subject shares of the individual. Disqualifying event (3) For the purposes of this section, a disqualifying event in respect of a qualifying cooperative conversion occurs at the earliest of (a) the time when the worker cooperative that participated in the qualifying cooperative conversion ceases to be a worker cooperative, and (b) the time that is the beginning of the taxation year of the worker cooperative in which less than 50% of the fair market value of the shares of the worker cooperative is derived, directly or indirectly, from assets used principally in an active business carried on by the worker cooperative (or by a qualifying cooperative business controlled by the worker cooperative) at both that time and at the beginning of the preceding taxation year of the worker cooperative (unless the active business has ceased to be carried on at that time due to the disposition of all the assets that were used to carry on the business in order to satisfy debts owed to creditors of the worker cooperative or of the qualifying cooperative business). Consequences of a disqualifying event (4) If a disqualifying event in respect of a qualifying cooperative conversion occurs (a) within 24 months after the disposition time for the qualifying cooperative conversion, subsection (2) is deemed to have never applied in respect of the subject shares disposed of under the qualifying cooperative conversion; or (b) within 8 years of the day that is 24 months after the disposition time for the qualifying cooperative conversion, in computing the income of the worker cooperative that participated in the qualifying cooperative conversion, the worker cooperative is deemed to have a gain equal to the elected amount (within the meaning of clause (1)(e)(ii)(A)) included in the joint election referred to in paragraph (1)(e), for the year in which the disqualifying event occurs, from the disposition of a capital property. Anti-avoidance (5) Despite any other provision in this section, subsection (2) does not apply in respect of a qualifying cooperative conversion if it is reasonable to consider that one of the purposes of any transaction (as defined in subsection 245(1)), or series of transactions, is to (a) involve the subject corporation (or the purchaser corporation) in the qualifying cooperative conversion to accommodate the direct or indirect acquisition of subject shares (or the acquisition of all or substantially all of the risk of loss and opportunity for gain or profit in respect of the subject shares) by another person or partnership (other than the subject corporation or the purchaser corporation) in a manner that permits an individual to claim a deduction under subsection (2) that would otherwise not be available; or (b) organize or reorganize a subject corporation or any other corporation, partnership or trust in a manner that allows a deduction to be claimed under subsection (2) in respect of more than one qualifying cooperative conversion of a business that is relevant to the determination of whether subject shares satisfied the condition set out in paragraph (a) of the definition qualifying cooperative conversion in subsection 248(1). Failure to report capital gain (6) Despite subsection (2), no amount may be deducted under this section in respect of a capital gain of an individual for a particular taxation year in computing the individual’s taxable income for the particular taxation year or any subsequent year, if (a) the individual knowingly or under circumstances amounting to gross negligence (i) fails to file the individual’s return of income for the particular taxation year within one year after the taxpayer’s filing-due date for the particular taxation year, or (ii) fails to report the capital gain in the individual’s return of income for the particular taxation year; and (b) the Minister establishes the facts justifying the denial of such an amount under this section. Deduction not permitted (7) Despite subsection (2), no amount may be deducted under this section in computing an individual’s taxable income for a taxation year in respect of a capital gain of the individual for the taxation year if the capital gain is from a disposition of property which disposition is part of a series of transactions or events (a) that includes a dividend received by a corporation to which dividend subsection 55(2) does not apply but would apply if this Act were read without reference to paragraph 55(3)(b); or (b) in which any property is acquired by a corporation or partnership for consideration that is significantly less than the fair market value of the property at the time of acquisition (other than an acquisition as the result of an amalgamation or merger of corporations or the winding-up of a corporation or partnership or a distribution of property of a trust in satisfaction of all or part of a corporation’s capital interest in the trust). Deduction not permitted (8) Despite subsection (2), if an individual has a capital gain for a taxation year from the disposition of a property and it can reasonably be concluded, having regard to all the circumstances, that a significant part of the capital gain is attributable to the fact that dividends were not paid on a share (other than a prescribed share within the meaning of subsection 110.6(8)) or that dividends paid on such a share in the taxation year or in any preceding taxation year were less than 90% of the average annual rate of return on that share for that year, no amount in respect of that capital gain shall be deducted under this section in computing the individual’s taxable income for the year. Average annual rate of return (9) For the purpose of subsection (8), the average annual rate of return on a share (other than a prescribed share within the meaning of subsection 110.6(8)) of a corporation for a taxation year is the annual rate of return by way of dividends that a knowledgeable and prudent investor who purchased the share on the day it was issued would expect to receive in that year, other than the first year after the issue, in respect of the share if (a) there was no delay or postponement of the payment of dividends and no failure to pay dividends in respect of the share; (b) there was no variation from year to year in the amount of dividends payable in respect of the share (other than where the amount of dividends payable is expressed as an invariant percentage of or by reference to an invariant difference between the dividend expressed as a rate of interest and a generally quoted market interest rate); and (c) the proceeds to be received by the investor on the disposition of the share are the same amount the corporation received as consideration on the issue of the share. Deduction not permitted (10) If it is reasonable to consider that one of the main reasons for an individual acquiring, holding or having an interest in a partnership or trust (other than an interest in a personal trust) or for the existence of any terms, conditions, rights or other attributes of the interest is to enable the individual to receive or have allocated to the individual a percentage of any capital gain or taxable capital gain of the partnership or trust that is larger than the individual’s percentage of the income of the partnership or trust, as the case may be, despite any other provision of this Act, no amount may be deducted under subsection (2) by the individual in respect of any such gain allocated or distributed to the individual. Related persons, etc. (11) For the purposes of this section, (a) a taxpayer is deemed to have disposed of shares that are identical properties in the order in which the taxpayer acquired them; (b) a personal trust is deemed (i) to be related to a person or partnership for any period throughout which the person or partnership was a beneficiary of the trust, and (ii) in respect of shares of the capital stock of a corporation, to be related to the person from whom it acquired those shares if, at the time the trust disposed of the shares, all of the beneficiaries (other than registered charities) of the trust were related to that person or would have been so related if that person were living at that time; (c) a spouse or common-law partner of a particular individual includes another individual who was a spouse or common-law partner of the particular individual immediately before the death of the other individual; (d) a partnership is deemed to be related to a person for any period throughout which the person was a member of the partnership; (e) a person who is a member of a partnership that is a member of another partnership is deemed to be a member of the other partnership; (f) if a corporation acquires shares of a class of the capital stock of another corporation from any person, it is deemed in respect of those shares to be related to the person if all or substantially all the consideration received by that person from the corporation in respect of those shares was common shares of the capital stock of the corporation; and (g) shares issued by a corporation to a particular person or partnership are deemed to have been owned immediately before their issue by a person who was not related to the particular person or partnership unless the shares were issued (i) as consideration for other shares, (ii) as part of a transaction or series of transactions in which the person or partnership disposed of property to the corporation that consisted of (A) all or substantially all the assets used in an active business carried on by that person or the members of that partnership, or (B) an interest in a partnership all or substantially all the assets of which were used in an active business carried on by the members of the partnership, or (iii) as payment of a stock dividend.

38(1) Clause 111(1)(e)(ii)(A) of the Act is replaced by the following: (A) the amount required by subsection 127(8), 127.44(11), 127.45(8), 127.48(12), 127.49(8) or 127.491(12) in respect of the partnership to be added in computing the investment tax credit, the CCUS tax credit (as defined in subsection 127.44(1)), the clean technology investment tax credit (as defined in subsection 127.45(1)), the clean hydrogen tax credit (as defined in subsection 127.48(1)), the CTM investment tax credit (as defined in subsection 127.49(1)) or the clean electricity investment tax credit (as defined in subsection 127.491(1) ) of the taxpayer for the taxation year, (2) Paragraph 111(2)(b) of the Act is replaced by the following: (b) paragraph (1.1)(b) is to be read as follows: “ (b) the amount, if any, by which (i) the amount claimed under paragraph (1)(b) in respect of the taxpayer’s net capital losses for the particular year exceeds the total of (ii) all amounts in respect of the taxpayer’s net capital losses that, using the formula in subparagraph (a)(ii), would be required to be claimed under paragraph (1)(b) for the particular year to produce the amount determined under paragraph (a) for the particular year, and (iii) all amounts each of which is an amount deducted under section 110.6, 110.61 or 110.62 in computing the taxpayer’s taxable income for a taxation year, except to the extent that, where the particular year is the year in which the taxpayer died, the amount, if any, by which the amount determined under subparagraph (i) in respect of the taxpayer for the immediately preceding taxation year exceeds the amount so determined under subparagraph (ii).” (3) Paragraph (b) of the description of E in the definition non-capital loss in subsection 111(8) of the Act is replaced by the following: (b) an amount deducted under paragraph (1)(a.1) or (b) or section 110.6, 110.61 or 110.62 , or deductible under any of paragraphs 110(1)(d) to (g) and (k), section 112 and subsections 113(1) and 138(6), in computing the taxpayer’s taxable income for the year, or (4) Subsection (1) is deemed to have come into force on April 16, 2024. (5) Subsections (2) and (3) are deemed to have come into force on January 1, 2024.

39(1) Section 111.1 of the Act is replaced by the following: 111.1 (1) In computing an individual’s taxable income for a taxation year, the provisions of this Division shall be applied in the following order: sections 110, 110.2, 111, 110.61, 110.62 , 110.6 and 110.7. No double deduction (2) No amount may be deducted for a taxation year of an individual, under section 110.6, in respect of any portion of a taxable capital gain to the extent that the portion of the taxable capital gain has been deducted under section 110.61 or 110.62.

40(1) Subsections 112(2.31) to (2.34) of the Act are repealed. (2) The portion of subparagraph 112(3.2)(a)(iii) of the Act before clause (A) is replaced by the following: (iii) if the trust is an individual’s graduated rate estate, the share was acquired as a consequence of the individual’s death and the disposition occurs during the trust’s first three taxation years , 1/2 of the lesser of (3) Subsection (1) applies in respect of dividends received after 2024. (4) Subsection (2) applies to taxation years of graduated rate estates of individuals who died on or after August 12, 2024.

41(1) Paragraph 117.1(2)(c) of the Act is replaced by the following: (c) the amount of $ 625,000 referred to in paragraph 110.6(2)(a), for a taxation year that begins after 2025 ; (2) Subsection (1) applies to taxation years that begin after 2024.

42(1) The definition qualifying expenditure in subsection 118.041(1) of the Act is amended by striking out “or” at the end of paragraph (i), by adding “or” at the end of paragraph (j) and by adding the following after paragraph (j): (k) that is included in computing a deduction under section 118.2 for any taxpayer for any taxation year. ( dépense admissible ) (2) Subsection 118.041(4) of the Act is repealed. (3) Subsections (1) and (2) come into force or are deemed to have come into force on January 1, 2026.

43Section 118.1 of the Act is amended by adding the following after subsection (28): (29) For the purposes of applying this section, a gift made by an individual before March 2025 and after the end of a taxation year of the individual that ended after November 14, 2024 and before 2025 (referred to in this subsection as the “donation year”) is deemed to have been made by the individual in the donation year and not in the individual’s 2025 taxation year if (a) a credit for the gift would be deductible under this section in computing the individual’s tax payable under this Part for the donation year if it were made immediately before the end of that year; (b) the individual claims the amount of the gift under subsection (3) for the donation year; (c) the gift was in the form of cash or was transferred by way of cheque, credit card, money order or electronic payment; and (d) the gift was not made (i) through a payroll deduction, or (ii) if the individual died after 2024, by the individual’s will.

44(1) Subsection 122.62(10) of the Act is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b): (c) at the beginning of the month, the person satisfied the conditions set out in paragraphs (c) to (e) of the definition eligible individual in section 122.6. (2) Subsection (1) applies to months that begin after August 31, 2025.

45(1) The Act is amended by adding the following after section 122.92: SUBDIVISION A.7 Personal Support Workers Tax Credit 122.93 (1) The following definitions apply in this section. eligible health care establishment means a hospital, nursing care facility, residential care facility, community care facility for the elderly, home health care establishment and similar regulated health care establishments. ( établissement de soins de santé admissible ) eligible personal support worker , for a taxation year, means an individual (a) who performs duties of employment in the capacity of a personal support worker for an eligible health care establishment during the taxation year (in this definition referred to as the “duties for the year”); (b) who, in the course of performing the duties for the year, ordinarily provides one-on-one care and essential support to optimize and maintain another individual’s health, well-being, safety, autonomy and comfort consistent with that other individual’s health care needs as directed by a regulated health care professional or a provincial or community health organization; and (c) whose main duties of employment, in respect of the duties for the year, include assisting individuals with activities of daily living and mobilization. ( préposé aux services de soutien à la personne admissible ) return of income , filed by an eligible personal support worker for a taxation year, means a return of income (other than a return of income under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) that is required to be filed for the taxation year or that would be required to be filed if the eligible personal support worker had tax payable under this Part for the taxation year. ( déclaration de revenu ) yearly eligible remuneration of an individual for a taxation year means the total of all amounts, each of which (a) would be, in the absence of section 8 and paragraph 81(1)(a), the individual’s income for the taxation year from an office or employment as an eligible personal support worker for an eligible health care establishment in a province, other than duties performed in Newfoundland and Labrador, the Northwest Territories and British Columbia; and (b) is certified by the individual’s employer in the prescribed form and manner to be an amount that satisfies the description under paragraph (a). ( rémunération annuelle admissible ) Deemed overpayment — yearly eligible remuneration (2) An eligible personal support worker, for a taxation year that begins after 2025 and that ends before 2031, who files a return of income for the taxation year and makes a claim under this subsection, is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount equal to the lesser of (a) $1,100, and (b) 5% of the eligible personal support worker’s yearly eligible remuneration for the taxation year. Effect of bankruptcy (3) For the purpose of this Subdivision, if an individual becomes bankrupt in a particular calendar year (a) despite subsection 128(2), any reference to a taxation year of the individual (other than in this subsection) is deemed to be a reference to the particular calendar year; and (b) the individual’s yearly eligible remuneration for the taxation year ending on December 31 of the particular calendar year is deemed to include the individual’s yearly eligible remuneration for the taxation year that begins on January 1 of the particular calendar year. Special rules in the event of death (4) For the purpose of this Subdivision, if an individual dies before the end of a calendar year, any return of income filed by a legal representative of the individual is deemed to be a return of income filed by the individual.

46(1) Subclause 126(1)(b)(ii)(A)(III) of the Act is replaced by the following: (III) the total of all amounts each of which is an amount deducted under section 110.6, 110.61 or 110.62 or paragraph 111(1)(b), or deductible under any of paragraphs 110(1)(d) to (g) and sections 112 and 113, in computing the taxpayer’s taxable income for the year, and (2) Subclause 126(2.1)(a)(ii)(A)(III) of the Act is replaced by the following: (III) the total of all amounts each of which is an amount deducted under section 110.6, 110.61 or 110.62 or paragraph 111(1)(b), or deductible under any of paragraphs 110(1)(d) to (g) and sections 112 and 113, in computing the taxpayer’s taxable income for the year, and (3) Subparagraph 126(3)(b)(iii) of the Act is replaced by the following: (iii) the total of all amounts each of which is an amount deducted under section 110.6, 110.61 or 110.62 or paragraph 111(1)(b), or deductible under any of paragraphs 110(1)(d) to (d.3), (f) and (g), in computing the taxpayer’s taxable income for the year, (4) Subsection 126(5.1) of the Act is replaced by the following: (5.1) If in a taxation year an individual has claimed a deduction under section 110.6, 110.61 or 110.62 in computing the individual’s taxable income for the year, for the purposes of this section the individual shall be deemed to have claimed the deduction under section 110.6, 110.61 or 110.62 in respect of such taxable capital gains or portion thereof as the individual may specify in the individual’s return of income required to be filed pursuant to section 150 for the year or, where the individual has failed to so specify, in respect of such taxable capital gains as the Minister may specify in respect of the taxpayer for the year. (5) Paragraph (g) of the definition non-business-income tax in subsection 126(7) of the Act is replaced by the following: (g) that can reasonably be attributed to a taxable capital gain or a portion thereof in respect of which the taxpayer or a spouse or common-law partner of the taxpayer has claimed a deduction under section 110.6, 110.61 or 110.62 , or (6) Subparagraph 126(9)(a)(ii) of the Act is replaced by the following: (ii) for the purpose of subparagraph (1)(b)(i), any portion of income in respect of which an amount was deducted under section 110.6, 110.61 or 110.62 in computing the taxpayer’s income, or (7) Subsections (1) to (6) are deemed to have come into force on January 1, 2024.

47(1) The definition critical mineral in subsection 127(9) of the Act is replaced by the following: critical mineral means bismuth, cesium, chromium , cobalt, copper, fluorspar , gallium, germanium , graphite, indium , lithium, magnesium, manganese, molybdenum , nickel, niobium , a platinum group metal, a rare earth element, scandium, tantalum , tellurium, tin , titanium, tungsten , uranium, vanadium or zinc; ( minéral critique ) (2) The definition first term shared-use equipment in subsection 127(9) of the Act is replaced by the following: first term shared-use-equipment , of a taxpayer, means depreciable property of the taxpayer (other than prescribed depreciable property of a taxpayer) that is used by the taxpayer, during its operating time in the period (in this subsection and subsection ( 11.5 ) referred to as the “first period”) beginning at the time the property was acquired by the taxpayer and ending at the end of the taxpayer’s first taxation year ending at least 12 months after that time, primarily for the prosecution of scientific research and experimental development in Canada, but does not include general purpose office equipment or furniture; ( matériel à vocations multiples de première période ) (3) The definition government assistance in subsection 127(9) of the Act is replaced by the following: government assistance means assistance from a government, municipality or other public authority whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance, other than as an excluded loan (as defined in subsection 12(11)), as a deduction under subsection (5) or (6) or as a deemed payment on account of tax payable under subsection 127.44(2), 127.45(2), 127.48(2), 127.49(2) or 127.491(2) ; ( aide gouvernementale ) (4) The definition second term shared-use equipment in subsection 127(9) of the Act is replaced by the following: second term shared-use-equipment , of a taxpayer, means property of the taxpayer that was first term shared-use-equipment and that is used by the taxpayer, during its operating time in the period (in this subsection and subsection ( 11.5 ) referred to as the “second period”) beginning at the time the property was acquired by the taxpayer and ending at the end of the taxpayer’s first taxation year ending at least 24 months after that time, primarily for the prosecution of scientific research and experimental development in Canada; ( matériel à vocations multiples de deuxième période ) (5) Paragraph (b) of the definition contract payment in subsection 127(9) of the Act is replaced by the following: (b) an amount, other than a prescribed amount, payable by a Canadian government or municipality or other Canadian public authority or by a person exempt, because of section 149, from tax under this Part on all or part of the person’s taxable income for scientific research and experimental development to be performed for it or on its behalf; ( paiement contractuel ) (6) Paragraph (a) of the definition flow-through mining expenditure in subsection 127(9) of the Act is replaced by the following: (a) that is a Canadian exploration expense incurred by a corporation after March 2025 and before 2028 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2028 ) in conducting mining exploration activity from or above the surface of the earth for the purpose of determining the existence, location, extent or quality of a mineral resource described in paragraph (a) or (d) of the definition mineral resource in subsection 248(1), (7) Paragraphs (c) and (d) of the definition flow-through mining expenditure in subsection 127(9) of the Act are replaced by the following: (c) an amount in respect of which is renounced in accordance with subsection 66(12.6) by the corporation to the taxpayer (or a partnership of which the taxpayer is a member) under an agreement described in that subsection and made after March 2025 and before April 2027 , (d) that is not an expense that was renounced under subsection 66(12.6) to the corporation (or a partnership of which the corporation is a member), unless that renunciation was under an agreement described in that subsection and made after March 2025 and before April 2027 , and (8) Paragraph (a) of the definition qualified expenditure in subsection 127(9) of the Act is amended by striking out “or” at the end of subparagraph (i) and at the end of subparagraph (ii) and by adding the following after subparagraph (ii): (iii) an expenditure for first term shared-use-equipment or second term shared-use-equipment, or (iv) an expenditure described in paragraph 37(1)(b), or (9) Paragraph (d) of the definition qualified expenditure in subsection 127(9) of the Act is repealed. (10) Subsection 127(9) is amended by adding the following in alphabetical order: consolidated financial statements means financial statements in which the assets, liabilities, income, expenses and cash flows of the members of a group are presented as those of a single economic entity; ( états financiers consolidés ) consolidated group means a group of entities in respect of which an ultimate parent entity is required to prepare consolidated financial statements, or would be so required if equity interests in any of the entities were traded on a public securities exchange; ( groupe consolidé ) eligible Canadian public corporation , at the relevant time in a taxation year, means (a) a corporation that (i) is resident in Canada, (ii) is a public corporation, or would be a public corporation if the words “designated stock exchange in Canada” in paragraph (a) of the definition public corporation in subsection 89(1) were read as “designated stock exchange”, (iii) is not controlled, directly or indirectly in any manner whatever, by one or more non-resident persons, and (iv) would not, if each share of its capital stock that is owned by a non-resident person (as determined, absent actual knowledge, based on publicly available information, including information filed pursuant to applicable securities laws before the year) were owned by a particular person, be controlled by the particular person, or (b) an eligible subsidiary; ( société publique canadienne admissible ) eligible subsidiary means a corporation (a) that is resident in Canada, and (b) not less than 90% of the issued shares of each class of the capital stock of which is owned, directly or indirectly, by one or more corporations that are eligible Canadian public corporations because of paragraph (a) of that definition; ( filiale admissible ) entity means (a) a corporation, partnership or trust, or (b) any other arrangement, association, organization or body whether registered or unregistered for which separate financial accounts are prepared; ( entité ) financial statements means financial statements prepared in accordance with acceptable accounting standards , as defined in subsection 18.21(1); ( états financiers ) fiscal year means an annual accounting period in respect of which a corporation prepares its financial statements; ( exercice ) ultimate parent entity , in respect of a group of entities, means the member of the group that would be the ultimate parent entity , as defined in subsection 233.8(1), of the group if the group were a multinational enterprise group as defined in subsection 233.8(1). ( entité mère ultime ) (11) The portion of subsection 127(10.1) of the Act before paragraph (a) is replaced by the following: (10.1) For the purposes of paragraph (e) of the definition investment tax credit in subsection (9), if a corporation was throughout a taxation year a Canadian-controlled private corporation or an eligible Canadian public corporation , there shall be added in computing the corporation’s investment tax credit at the end of the year the amount that is 20% of the least of (12) Subsection 127(10.2) is replaced by the following: Expenditure limit — CCPC (10.2) For the purpose of subsection (10.1), a particular Canadian-controlled private corporation’s expenditure limit for a particular taxation year is the amount determined by the formula $ 6 million × [($ 60 million − A) ÷ $ 60 million] where A is (a) nil, if the following amount is less than or equal to $ 15 million: (i) if the particular corporation is not associated with any other corporation in the particular taxation year, the amount that is its taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) for its immediately preceding taxation year, and (ii) if the particular corporation is associated with one or more other corporations in the particular taxation year, the amount that is the total of all amounts, each of which is the taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) of the particular corporation for its, or of one of the other corporations for its, last taxation year that ended in the last calendar year that ended before the end of the particular taxation year, and (b) in any other case, the lesser of $ 60 million and the amount by which the amount determined under subparagraph (a)(i) or (ii), as the case may be, exceeds $ 15 million. (13) Subsection 127(10.3) of the Act is replaced by the following: Shared limit — associated CCPCs (10.3) If all of the Canadian-controlled private corporations that are associated with each other in a taxation year file with the Minister in prescribed form an agreement under which , for the purpose of subsection (10.1), they allocate an amount to one or more of them for the year, the expenditure limit for the year of each of the corporations is the amount so allocated if the total of the amounts so allocated does not exceed (a) unless subsection (10.32) applies , the amount determined for the year by the formula in subsection (10.2); or (b) if subsection (10.32) applies, the amount determined for the year under that subsection. Revenue election for single CCPC (10.31) Despite subsection (10.2), for the purpose of subsection (10.1), if throughout a taxation year a particular Canadian-controlled private corporation is not associated with another corporation and the particular corporation files with the Minister in the prescribed form and manner, the particular corporation may elect that its expenditure limit for the year be determined under subsection (10.6) as if the particular corporation were an eligible Canadian public corporation that is not a member of a consolidated group. Revenue election for CCPC having associated corporations (10.32) Despite subsection (10.2), and subject to subsections (10.21) to (10.4), for the purpose of subsection (10.1), if at any time in a taxation year one or more particular Canadian-controlled private corporations are members of a group of associated corporations and all those particular corporations file with the Minister a prescribed form, those particular corporations may elect that the expenditure limit for the particular corporations be determined for the year under subsection (10.6), calculated as if (a) each Canadian-controlled private corporation in the group were an eligible Canadian public corporation; (b) the group were a consolidated group; (c) the amount determined under subparagraph (a)(ii) of the description of A in subsection (10.6) were the total of all amounts, each of which is the average, over the period of three fiscal years immediately preceding and ending in the last calendar year that ended before the end of the particular taxation year, of annual revenue reflected in the financial statements of each corporation that is a member of the group; and (d) the annual revenue described in paragraph (c) (i) must include each corporation’s reasonable share of annual revenue reflected in the financial statements of any partnership or trust in which the corporation held an interest, and (ii) may include reasonable adjustments to reflect the annual revenue of the group as that of a single economic entity. (14) Section 127(10.6) of the Act is replaced by the following: Expenditure limit determination in certain cases (10.5) Notwithstanding any other provision of this section, (a) where a Canadian-controlled private corporation (in this paragraph referred to as the “first corporation”) has more than one taxation year ending in the same calendar year and it is associated in two or more of those taxation years with another Canadian-controlled private corporation that has a taxation year ending in that calendar year, the expenditure limit of the first corporation for each taxation year in which it is associated with the other corporation ending in that calendar year is, subject to the application of paragraph (b), an amount equal to its expenditure limit for the first such taxation year determined without reference to paragraph (b); and (b) where a Canadian-controlled private corporation has a taxation year that is less than 51 weeks, its expenditure limit for the year is that proportion of its expenditure limit for the year determined without reference to this paragraph that the number of days in the year is of 365. Expenditure limit — ECPC (10.6) For the purpose of subsection (10.1), a particular eligible Canadian public corporation’s expenditure limit for a particular taxation year is the amount determined by the formula $6 million × [($60 million − A) ÷ $60 million] where A is (a) nil, if the following amount is less than or equal to $15 million: (i) if the particular corporation is not a member of a consolidated group in the particular taxation year, the amount that is the average, over the period of three fiscal years immediately preceding and ending before the particular taxation year, of its annual revenue based on the amounts reflected in the financial statements of the corporation, and (ii) if the particular corporation is a member of a consolidated group in the particular taxation year, the amount that is the average, over the period of three fiscal years immediately preceding and ending before the particular taxation year, of the annual revenue reflected in the consolidated financial statements of the group, and (b) in any other case, the lesser of $60 million and the amount by which the amount determined under subparagraph (a)(i) or (ii), as the case may be, exceeds $15 million. Expenditure limits — consolidated ECPCs (10.61) Despite subsection (10.6), the expenditure limit for a taxation year of an eligible Canadian public corporation that is, at any time in the year, a member of a consolidated group is, except as otherwise provided in this section, nil. Consolidated ECPCs (10.62) If all of the eligible Canadian public corporations that are members of a consolidated group file with the Minister in prescribed form an agreement under which, for the purpose of subsection (10.1), they allocate an amount to one or more of them for the year and the amount so allocated or the total of the amounts so allocated, as the case may be, does not exceed the amount determined for the year by the formula in subsection (10.6), the expenditure limit for the year of each of the corporations is the amount so allocated to it. Failure to file agreement (10.63) If any of the eligible Canadian public corporations that are members of a consolidated group fails to file with the Minister an agreement as contemplated by subsection (10.62) within 30 days after notice in writing by the Minister is forwarded to any of them that such an agreement is required for the purposes of this Part, the Minister must, for the purpose of subsection (10.1), allocate an amount to one or more of them for the year, which amount or the total of which amounts, as the case may be, must equal the amount determined for the year by the formula in subsection (10.6), and in any such case the expenditure limit for the year of each of the corporations is the amount so allocated to it. Determinations in certain cases (10.64) Despite any other provision of this section, (a) where an eligible Canadian public corporation (in this paragraph referred to as the “first corporation”) has more than one taxation year ending in the same calendar year and in two or more of those taxation years it is a member of a consolidated group in which another eligible Canadian public corporation has a taxation year ending in that calendar year, the expenditure limit of the first corporation for each taxation year in which it is in the same group as the other corporation ending in that calendar year is, subject to the application of paragraph (b), an amount equal to its expenditure limit for the first such taxation year determined without reference to paragraph (b); (b) where an eligible Canadian public corporation has a taxation year that is less than 51 weeks, its expenditure limit for the year is that proportion of its expenditure limit for the year determined without reference to this paragraph that the number of days in the year is of 365; (c) for the purpose of subparagraph (a)(i) of the description of A in subsection (10.6), where one or more of the fiscal years of an eligible Canadian public corporation is less than 51 weeks, the revenue reflected in the financial statements for each of those fiscal years must be determined by multiplying that amount by the ratio that 365 is of the number of days in that year; (d) for the purpose of subparagraph (a)(ii) of the description of A in subsection (10.6), where one or more of the fiscal years of the ultimate parent entity of a consolidated group is less than 51 weeks, the revenue reflected in the consolidated financial statements of the entity for each of those fiscal years must be determined by multiplying that amount by the ratio that 365 is of the number of days in that year; and (e) for the purpose of subparagraphs (a)(i) and (ii) of the description of A in the formula in subsection (10.6), (i) the average annual revenue referred to in each subparagraph is to be calculated over the actual number of fiscal years if there are less than three fiscal periods immediately preceding and ending before the particular taxation year, and (ii) if paragraph (10.32)(c) applies, the average annual revenue referred to in that paragraph is to be calculated over the actual number of fiscal years if there are less than three fiscal years immediately preceding and ending in the calendar year referred to in that paragraph. (15) Paragraph 127(11.1)(c.1) of the Act is repealed. (16) Subsection 127(11.2) of the Act is replaced by the following: Time of acquisition (11.2) In applying subsections (5), (7) and (8), paragraphs (a) and (a.1) of the definition investment tax credit in subsection (9) and section 127.1, qualified property and first term shared-use-equipment are deemed not to have been acquired by a taxpayer — and expenditures incurred to acquire property described in paragraph 37(1)(b) are deemed not to have been incurred — before the property is considered to have become available for use by the taxpayer, determined without reference to paragraphs 13(27)(c) and (28)(d). (17) Subsection 127(11.5) of the Act is replaced by the following: Adjustments to qualified expenditures (11.5) For the purposes of the definition qualified expenditure in subsection (9), (a) the amount of an expenditure (other than a prescribed proxy amount) incurred by a taxpayer in a taxation year is deemed to be the amount of the expenditure determined without reference to subsections 13(7.1) and (7.4) and after the application of subsection (11.6); and (b) the amount of an expenditure incurred by a taxpayer in the taxation year that ends coincidentally with the end of the first period (within the meaning assigned in the definition first term shared-use-equipment in subsection (9)) or the second period (within the meaning assigned in the definition second term shared-use-equipment in subsection (9)) in respect of first term shared-use-equipment or second term shared-use-equipment, respectively, of the taxpayer is deemed to be 1/4 of the capital cost of the equipment determined after the application of subsection (11.6) in accordance with the following rules: (i) the capital cost to the taxpayer must be computed as if no amount were added because of section 21, and (ii) the capital cost to the taxpayer is determined without reference to subsections 13(7.1) and (7.4). (18) The portion of subsection 127(11.6) of the Act after paragraph (b) and before paragraph (c) is replaced by the following: the amount of the expenditure incurred by the taxpayer for the service or property and the capital cost to the taxpayer of the property are deemed to be (19) Subparagraph 127(11.6)(d)(i) of the Act is replaced by the following: (i) the capital cost to the taxpayer of the property otherwise determined, and (20) Subsection 127(11.8) of the Act is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b): (c) the leasing of a property is deemed to be the rendering of a service. (21) Subsection 127(33) of the Act is replaced by the following: Certain non-arm’s length transfers (33) Subsections (27) to (29), (34) and (35) do not apply to a taxpayer or partnership (in this subsection referred to as the “transferor”) that disposes of a property to a person or partnership (in this subsection and subsections (34) and (35) referred to as the “purchaser”), that does not deal at arm’s length with the transferor, if the purchaser acquired the property in circumstances where the cost of the property to the purchaser would have been an expenditure of the purchaser described in subclause 37(8)(a)(ii)(A)(III) or (B)(III) but for subparagraph 2902(b)(iii) of the Income Tax Regulations . (22) Subsection (1) applies in respect of expenses renounced under a flow-through share agreement entered into after November 4, 2025. (23) Subsections (2), (4), (5), (8), (9) and (15) to (21) apply in respect of property acquired on or after December 16, 2024 and, in the case of lease costs, to expenditures incurred on or after December 16, 2024. (24) Subsection (3) is deemed to have come into force on April 16, 2024. (25) Subsections (6) and (7) apply in respect of expenses renounced under a flow-through share agreement entered into after March 2025. (26) Subsections (10) to (14) apply to taxation years that begin on or after December 16, 2024.

48(1) The formula and its description in the definition qualifying income limit in subsection 127.1(2) of the Act is replaced by the following: $500,000 × [($ 60 million − A) ÷ $ 60 million] where A is (a) nil, if $ 15 million is greater than or equal to the amount (in paragraph (b) referred to as the “taxable capital amount”) that is the total of the corporation’s taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) for its immediately preceding taxation year and the taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) of each associated corporation for the associated corporation’s last taxation year that ended in the last calendar year that ended before the end of the particular taxation year, and (b) in any other case, the lesser of $ 60 million and the amount by which the taxable capital amount exceeds $ 15 million; ( plafond de revenu admissible ) (2) Subparagraph (f)(i) of the definition refundable investment tax credit in subsection 127.1(2) of the Act is replaced by the following: (i) the portion of the amount required by subsection 127(10.1) to be added in computing the taxpayer’s investment tax credit at the end of the year that is in respect of qualified expenditures ( other than expenditures of a capital nature ) incurred by the taxpayer in the year, and (3) Subsection 127.1(2.01) of the Act is replaced by the following: (2.01) In the case of a taxpayer that is a Canadian-controlled private corporation or an eligible Canadian public corporation, and is not a qualifying corporation or an excluded corporation, the refundable investment tax credit of the taxpayer for a taxation year is the amount determined by the formula (40% × (A − B)) + (C − D) where A is the total of (a) the portion of the amount required by subsection 127(10.1) to be added in computing the taxpayer’s investment tax credit at the end of the year that is in respect of qualified expenditures (other than expenditures of a current nature) incurred by the taxpayer in the year, and (b) is all amounts determined under paragraph (a.1) of the definition investment tax credit in subsection 127(9) in respect of expenditures for which an amount is included in paragraph (a); B is the total of (a) the portion of the total of all amounts deducted by the taxpayer under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection (3) to have been so deducted for the year) that can reasonably be considered to be in respect of the total determined for A, and (b) the portion of the total of all amounts required by subsection 127(6) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined for A; C is the total of (a) the portion of the amount required by subsection 127(10.1) to be added in computing the taxpayer’s investment tax credit at the end of the year that is in respect of qualified expenditures ( other than expenditures of a capital nature ) incurred by the taxpayer in the year, and (b) all amounts determined under paragraph (a.1) of the definition investment tax credit in subsection 127(9) in respect of expenditures for which an amount is included in paragraph (a) ; and D is the total of (a) the portion of the total of all amounts deducted by the taxpayer under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection (3) to have been so deducted for the year) that can reasonably be considered to be in respect of the total determined for C , and (b) the portion of the total of all amounts required by subsection 127(6) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined for C . (4) Subsection (1) applies to taxation years that begin on or after December 16, 2024. (5) Subsections (2) and (3) apply in respect of property acquired on or after December 16, 2024 and, in the case of lease costs, to expenditures incurred on or after December 16, 2024.

49(1) Section 127.42 of the Act is amended by adding the following after subsection (8): (9) An amount for a designated province included in the total of all amounts deemed by this section to have been paid on account of tax payable for a taxation year is deemed to have been paid during the taxation year as a rebate in respect of charges levied under Part 1 of the Greenhouse Gas Pollution Pricing Act in respect of the designated province. (2) Subsection (1) applies to the 2021 and subsequent taxation years.

50(1) The portion of subsection 127.421(2) of the Act before the formula is replaced by the following: (2) A corporation that files, on or before December 31 , 2024, a return of income for a particular taxation year ending in 2023 (other than a final return on dissolution) is deemed to have paid on a date specified by the Minister of Finance, on account of tax payable under this Part for that taxation year, the total of all amounts, each of which is an amount, for each designated province, for each calendar year that is 2019, 2020, 2021, 2022 and 2023, determined by the formula (2) The portion of subsection 127.421(3) of the Act before the formula is replaced by the following: Deemed amount after 2023 (3) A corporation that files a return of income for a particular taxation year ending in a calendar year after 2023 (other than a final return on dissolution) is, if the return is filed on or before July 15 of the following calendar year, deemed to have paid on October 1st of that calendar year, on account of tax payable under this Part for the particular taxation year, the amount determined by the formula (3) Subsection 127.421(6) of the Act is replaced by the following: Payment — not taxable (6) There is not to be included in computing the income of a corporation for a taxation year an amount that is deemed under subsection (2) or (3) to have been paid on account of tax payable under this Part for a taxation year. (4) Subsections 127.421(8) and (9) of the Act are replaced by the following: Predecessor corporation — before 2023 (8) For the purpose of subsection (2), where there has been an amalgamation of two or more corporations before 2023, the corporation filing a return of income in 2023 is deemed to be the same corporation as and a continuation of each predecessor corporation that was registered with the Minister to make remittances required under section 153 under the corporation’s 2023 business number. Predecessor corporation — 2023 and subsequent years (9) For the purposes of subsections (2) and (3), the number of persons employed by a corporation in a calendar year after 2022 is deemed to be nil in that year if the corporation is formed by an amalgamation in that calendar year. (5) Subsection 127.421(11) of the Act is replaced by the following: Deemed taxation year (11) For the purposes of subsections (2) and (3), if a corporation has more than one taxation year ending in the same calendar year, the particular taxation year is the first taxation year that ends in that calendar year. (6) Subsections (1) to (5) are deemed to have come into force on June 20, 2024.

51(1) Subparagraph (c)(iii) of the definition dual-use equipment in subsection 127.44(1) of the Act is replaced by the following: (iii) incorporated into another property that would not otherwise be described in paragraph (a) or (b) or subparagraphs (i) and (ii) if the incorporation causes the other property to satisfy the description in paragraph (a) or (b) or subparagraph (i) or (ii); or (2) Paragraph (e) of the definition preliminary CCUS work activity in subsection 127.44(1) of the Act is replaced by the following: (e) clearing or excavating land, except excavation directly related to the installation of property that is described in Class 57 or 58 of Schedule II to the Income Tax Regulations or that is dual-use equipment. ( travaux préliminaires de CUSC ) (3) Subparagraph (b)(ii) of the description of A in the definition qualified carbon capture expenditure in subsection 127.44(1) of the Act is replaced by the following: (ii) if the equipment is described in subparagraph (a)‍(ii) of the definition dual-use equipment in this subsection, or is acquired in relation to such equipment, the mass of water expected to be supplied to a qualified CCUS project over the project’s total CCUS project review period is of the total mass of water expected to be processed by the equipment in that period, based on the project’s most recent project plan, (4) Paragraphs (a) and (b) of the definition specified percentage in subsection 127.44(1) of the Act are replaced by the following: (a) qualified carbon capture expenditure if incurred in respect of carbon capture (i) directly from ambient air (A) after 2021 and before 2036 , 60%, (B) after 2035 and before 2041, 30%, or (C) after 2040, 0%, or (ii) other than directly from ambient air (A) after 2021 and before 2036 , 50%, (B) after 2035 and before 2041, 25%, or (C) after 2040, 0%; and (b) qualified carbon transportation expenditure, qualified carbon storage expenditure or qualified carbon use expenditure if incurred (i) after 2021 and before 2036 , 37 1/2%, (ii) after 2035 and before 2041, 18 3/4%, or (iii) after 2040, 0%. ( pourcentage déterminé ) (5) Subsection 127.44(1) of the Act is amended by adding the following in alphabetical order: excluded CCUS equipment , in respect of a CCUS project of a taxpayer, means equipment that (a) is expected to be used in the production of hydrogen and would be required to produce hydrogen even if no CCUS process was applied by the taxpayer to produce the hydrogen; (b) is expected to be used for (i) natural gas processing, or (ii) acid gas injection; or (c) is oxygen production equipment. ( matériel de CUSC exclu ) (6) Subsection 127.44(3) of the Act is replaced by the following: (3) For the purposes of this section, paragraph 12(1)‍(t), subsection 13(7.‍1), the description of I in the definition undepreciated capital cost in subsection 13(21), subsection 53(2), sections 127.‍45, 127.‍48, 127.‍49, 127.491 and 129 and Part XII.‍7, the amount deemed under subsection (2) to have been paid by a taxpayer for a taxation year is deemed to have been deducted from the taxpayer’s tax otherwise payable under this Part for the year. (7) Subparagraph 127.44(9)(b)(ii) of the Act is amended by striking out “or” at the end of clause (B) and by replacing clause (C) with the following: (C) for which an investment tax credit or any other clean economy tax credit (as defined in subsection 127.47(1) ) is deducted, or (D) in respect of a specified natural gas energy system (as defined in subsection 127.491(1)), if a clean electricity investment tax credit (as defined in subsection 127.491(1)) is deducted by any person in respect of any property that is part of the system, (8) Subsection 127.44(17) of the Act is replaced by the following: Late filing (17) The Minister may accept the late filing by a qualifying taxpayer of the prescribed form containing prescribed information referred to in subsection (2) until the later of December 31, 2026 and one year after the filing-due date referred to in subsection (2), but no payment by the taxpayer is deemed to arise under that subsection until the prescribed form containing prescribed information has been filed with the Minister. (9) Subsections (1), (2), (5) and (8) are deemed to have come into force on January 1, 2022. (10) Subsection (3) is deemed to have come into force on March 28, 2023. (11) Subsection (4) is deemed to have come into force on November 4, 2025. (12) Subsections (6) and (7) are deemed to have come into force on April 16, 2024.

52(1) The definition small modular nuclear reactor in subsection 127.45(1) of the Act is repealed. (2) The definition non-clean technology use in subsection 127.45(1) of the Act is replaced by the following: non-clean technology use means a use of a particular property at a particular time that would, if the property were acquired at that time, result in the property not being a clean technology property, determined without reference to paragraph (b) of the definition clean technology property . ( utilisation non concernée par la technologie propre ) (3) Subparagraphs (d)(i) to (vii) of the definition clean technology property in subsection 127.45(1) of the Act are replaced by the following: (i) described in subparagraph (d)(ii), (iii.1), (v), (vi) or (xiv) of Class 43.1 in Schedule II to the Income Tax Regulations , but excluding a test wind turbine (within the meaning assigned by subsection 1219(3) of the Income Tax Regulations ), (ii) described in subparagraph (d)(xviii) or (xix) of Class 43.1 in Schedule II to the Income Tax Regulations , but excluding equipment that uses any fossil fuel in operation, (iii) described in subparagraph (d)(i) of Class 43.1 in Schedule II to the Income Tax Regulations , (iv) described in Class 56 in Schedule II to the Income Tax Regulations , (iv.1) described in subparagraph (d)(xxi) of Class 43.1 or subparagraph (b)(ii) of Class 43.2 in Schedule II to the Income Tax Regulations and used primarily to charge or dispense hydrogen to property described in Class 56 in Schedule II to the Income Tax Regulations , (v) equipment that is (A) part of a system that does not extract fossil fuels for sale, (B) used exclusively for the purpose of generating electrical energy or heat energy, or a combination of electrical energy and heat energy, solely from geothermal energy, and (C) described in subparagraph (d)(vii) of Class 43.1 in Schedule II to the Income Tax Regulations , (vi) concentrated solar energy equipment, (vii) small nuclear energy property , or (viii) incorporated into another property described in any of subparagraphs (i) to (vii), as part of a refurbishment of the other property provided that on completion of the refurbishment the other property is still described in any of subparagraphs (i) to (vii). ( bien de technologie propre ) (4) The definition clean technology property in subsection 127.45(1) of the Act, as amended by subsection (3), is amended by striking out “or” at the end of subparagraph (d)(vii) and by replacing subparagraph (d)(viii) with the following: (viii) waste biomass electricity generation equipment or waste biomass heat generation equipment that is acquired after November 20, 2023, determined without reference to subsection (4), or (ix) incorporated into another property described in any of subparagraphs (i) to (viii) , as part of a refurbishment of the other property provided that on completion of the refurbishment the other property is still described in any of subparagraphs (i) to (viii) . ( bien de technologie propre ) (5) Paragraph (g) of the definition concentrated solar energy equipment in subsection 127.45(1) of the Act is replaced by the following: (g) eligible transmission equipment , as defined in subsection 1104(13) of the Income Tax Regulations ; (6) Paragraph (d) of the definition excluded equipment in subsection 127.45(1) of the Act is replaced by the following: (d) a vehicle ; and (7) Paragraphs (b) to (d) of the definition specified percentage in subsection 127.45(1) of the Act are replaced by the following: (b) subject to paragraph (a), (i) on or after March 28, 2023 and before January 1, 2034, 30%, and (ii) after December 31, 2033 and before January 1, 2035, 15%; and (c) after December 31, 2034, nil. ( pourcentage déterminé ) (8) Subsection 127.45(1) of the Act is amended by adding the following in alphabetical order: nuclear facility includes a single site, contiguous sites and adjacent sites where nuclear fission reactors are located or will be located. ( installation nucléaire ) preliminary work activity means an activity that is preliminary to the acquisition, construction, fabrication or installation by or on behalf of a taxpayer of property including, but not limited to, a preliminary activity that is (a) obtaining a right of access or right of way to a project site or obtaining permits or regulatory approvals (including conducting environmental assessments); (b) performing front-end design or engineering work (including front-end engineering design studies) or process engineering work for the development of the project, including (i) collecting and analyzing of site data, (ii) calculating energy, mass, water or air balances, (iii) simulating and analyzing the performance and cost of process design options, (iv) selecting the optimum process design, and (v) conducting feasibility studies or pre-feasibility studies; (c) clearing or excavating land, except excavation directly related to the installation of clean technology property; (d) constructing a temporary access road to the project site; or (e) drilling of a well. ( travaux préliminaires ) refurbishment means significant alterations, renovations, improvements or additions to a property to substantially (a) extend its useful life; (b) increase its capacity; or (c) improve its efficiency. ( remise en état ) small nuclear energy property means property that (a) is part of a fixed location system that is used all or substantially all to generate electrical energy or heat energy, or a combination of electrical energy and heat energy, from nuclear fission as determined on an annual basis; (b) is located at a nuclear facility where, at the time the property becomes available for use, the total combined gross-rated thermal generating capacity of all planned and existing nuclear fission reactors at the facility is reasonably expected not to exceed 1,400 megawatts thermal; (c) is (i) a reactor, (ii) a reactor vessel, (iii) a reactor control rod, (iv) a moderator, (v) cooling equipment, (vi) heat generating equipment, (vii) nuclear fission fuel handling equipment, (viii) a containment structure, (ix) electrical generating equipment, (x) equipment for the distribution of heat energy within the system, or (xi) equipment that is physically and functionally integrated with property described in any of subparagraphs (i) to (x) and that is ancillary equipment (such as control equipment) used solely to support the functioning of property described in any of subparagraphs (i) to (x); and (d) is not (i) nuclear fission fuel, (ii) property used in nuclear waste disposal or storage, (iii) transmission equipment, (iv) distribution equipment, (v) a vehicle, (vi) property that would be included in Class 17 in Schedule II to the Income Tax Regulations if that Class were read without reference to its paragraph (a.1), (vii) equipment used to export heat energy from the system, or (viii) a building or other structure. ( bien pour l’énergie nucléaire de petite taille ) (9) Subsection 127.45(1) of the Act is amended by adding the following in alphabetical order: eligible bioenergy fuel means fuel that is combusted in the operation of a system described in paragraph (a) of the definition waste biomass electricity generation equipment and that is (a) specified waste material; or (b) fuel that has been produced using equipment that is (i) part of the system, and (ii) described in subparagraph (b)(v) or (vi) of the definition waste biomass electricity generation equipment . ( carburants admissibles pour la bioénergie ) gaseous biofuel has the same meaning as in subsection 1104(13) of the Income Tax Regulations . ( biocarburants gazeux ) liquid biofuel has the same meaning as in subsection 1104(13) of the Income Tax Regulations . ( biocarburants liquides ) solid biofuel has the same meaning as in subsection 1104(13) of the Income Tax Regulations . ( biocarburants solides ) specified waste material has the same meaning as in subsection 1104(13) of the Income Tax Regulations . ( déchets déterminés ) spent pulping liquor has the same meaning as in subsection 1104(13) of the Income Tax Regulations . ( liqueur résiduaire ) waste biomass electricity generation equipment means property that (a) is part of a system that meets the following conditions (i) the system is used solely for the purpose of generating electrical energy, or a combination of electrical energy and heat energy, determined without reference to the recovery of chemicals from spent pulping liquor, (ii) the system consumes material all or substantially all of the energy content (expressed as the higher heating value of the material) of which is specified waste material, as determined on an annual basis, (iii) the system is on a single site, or on contiguous sites or adjacent sites that function as a single integrated site, at which the activities described in subparagraphs (i) and (ii) are carried out, and (iv) the system meets the following heat rate on an annual basis A ≥ (2 × B + C) ÷ (D + E ÷ F) where A is 13,000 BTU per kilowatt-hour, B is the energy content of fossil fuel (expressed as the higher heating value of the fuel) consumed by the system in BTU, C is the energy content of eligible bioenergy fuel or any other fuel other than fossil fuel (expressed as the higher heating value of the fuel) consumed by the system in BTU, D is the gross electrical energy produced by the system in kilowatt-hours, E is the net useful energy in the form of heat exported from the system to a thermal host in BTU, and F is 3,412 BTU per kilowatt-hour; (b) is (i) electrical generating equipment, (ii) heat generating equipment used primarily for the purpose of producing heat energy to operate equipment described in subparagraph (i), determined without reference to the recovery of chemicals from spent pulping liquor, (iii) equipment that generates both electrical and heat energy, (iv) heat recovery equipment used primarily for the purpose of conserving energy, or reducing the requirement to acquire energy, by extracting for reuse thermal waste that is generated by equipment described in this paragraph, (v) equipment that (A) is used to produce solid biofuel, liquid biofuel or gaseous biofuel used solely to operate equipment described in any of subparagraphs (i) to (iii) or (vi), from material all or substantially all of the energy content (expressed as the higher heating value of the material) of which is specified waste material, as determined on an annual basis, and (B) is described in any of subparagraphs (d)(xi), (xiii), (xvi) or (xx) of Class 43.1 in Schedule II to the Income Tax Regulations , (vi) equipment that is used to upgrade the combustibility of specified waste material used all or substantially all to operate equipment described in this subparagraph or in any of subparagraphs (i) to (iii) or (v), (vii) equipment for the distribution of heat energy within the system, (viii) equipment that is physically and functionally integrated with equipment described in any of subparagraphs (i) to (vii) and that is ancillary equipment (such as control equipment) used primarily to support the functioning of equipment described in any of subparagraphs (i) to (vii), or (ix) described in any of subparagraphs (i) to (viii) that is incorporated into a system that would not otherwise be described in paragraph (a) if the incorporation causes the system to satisfy the description in paragraph (a); and (c) is not (i) a building or other structure, (ii) transmission equipment, (iii) distribution equipment, (iv) equipment used to export heat energy from the system, (v) equipment for the storage of feedstock or fuel, (vi) pollution abatement equipment, (vii) a vehicle, or (viii) property described in Class 57 or 58 of Schedule II to the Income Tax Regulations . ( matériel générateur d’électricité à partir de déchets de biomasse ) waste biomass heat generation equipment means property that (a) is part of a system that meets the following conditions (i) the system is used solely for the purpose of generating heat energy, (ii) the system consumes material all or substantially all of the energy content (expressed as the higher heating value of the material) of which is specified waste material, other than spent pulping liquor, as determined on an annual basis, and (iii) the system is on a single site, or on contiguous sites or adjacent sites that function as a single integrated site, at which the activities described in subparagraphs (i) and (ii) are carried out; (b) is (i) heat generating equipment, (ii) equipment that (A) is used to produce solid biofuel, liquid biofuel or gaseous biofuel used solely to operate equipment described in any of subparagraphs (i) or (iii), from material all or substantially all of the energy content (expressed as the higher heating value of the material) of which is specified waste material, other than spent pulping liquor, as determined on an annual basis, and (B) is described in any of subparagraphs (d)(xi), (xiii), (xvi) or (xx) of Class 43.1 in Schedule II to the Income Tax Regulations , (iii) equipment that is used to upgrade the combustibility of specified waste material, other than spent pulping liquor, used all or substantially all to operate equipment described in this subparagraph or in subparagraph (i) or (ii), (iv) equipment for the distribution of heat energy within the system, (v) equipment that is physically and functionally integrated with equipment described in any of subparagraphs (i) to (iv) and that is ancillary equipment (such as control equipment) used primarily to support the functioning of equipment described in subparagraphs (i) to (iv), or (vi) described in any of subparagraphs (i) to (v) that is incorporated into a system that would not otherwise be described in paragraph (a) if the incorporation causes the system to satisfy the description in paragraph (a); and (c) is not (i) equipment used for the purpose of producing heat energy to operate electrical generating equipment, (ii) a building or other structure, (iii) equipment used to export heat energy from the system, (iv) equipment for the storage of feedstock or fuel, (v) pollution abatement equipment, (vi) a vehicle, or (vii) property described in any of Class 17, 57 or 58 of Schedule II to the Income Tax Regulations . ( matériel générateur de chaleur à partir de déchets de biomasse ) (10) Section 127.45 of the Act is amended by adding the following after subsection (1): (1.1) For the purpose of this section, where a qualifying taxpayer has a leasehold interest in a small nuclear energy property (a) subject to subsection (4), the taxpayer is deemed to acquire the property when it acquires the leasehold interest in the property; (b) the capital cost of the leasehold interest in the property to the taxpayer is deemed to be its capital cost of the property; and (c) the property is deemed to be disposed of by the taxpayer when it ceases to hold the leasehold interest in the property for proceeds of disposition equal to the fair market value of the property at the time it ceases to hold the leasehold interest. (11) Subsection 127.45(3) of the Act is replaced by the following: Time limit for application (3) A payment on account of tax payable shall not be deemed to be paid under subsection (2) if the taxpayer does not file with the Minister the prescribed form containing prescribed information referred to in subsection (2) in respect of the amount on or before the later of December 31, 2026 and the day that is one year after the taxpayer’s filing-due date for the year and, if the prescribed form is filed after the taxpayer’s filing-due date for the year, no payment by the taxpayer is deemed to arise under that subsection until the prescribed form containing the prescribed information has been filed with the Minister. (12) Paragraph 127.45(5)(a) of the Act is replaced by the following: (a) not include any amount (i) in respect of which an amount was previously deducted under this section by any person, (ii) in respect of which any other clean economy tax credit (as defined in subsection 127.47(1) ) was deducted by any person, (ii.1) in respect of any part of the capital cost of a property if a CCUS tax credit (as defined in subsection 127.44(1)) or a clean hydrogen tax credit (as defined in subsection 127.48(1)) was deducted by any person in respect of that property , (iii) that has, by virtue of section 21, been added to the cost of a property, or (iv) that is in respect of an expenditure incurred for a preliminary work activity; (13) Section 127.45 of the Act is amended by adding the following after subsection (5): Environmental compliance (5.1) A property that would otherwise be clean technology property of a qualifying taxpayer is deemed not to be a clean technology property of the taxpayer if, at the time the property becomes available for use by the taxpayer, there is substantial non-compliance by the taxpayer with the requirements of any environmental law, by-law or regulation of Canada, a province, a municipality, or a municipal or public body performing a function of government in Canada that is applicable in respect of the property. Compliance — reasonable efforts (5.2) The following rules apply in respect of a qualifying taxpayer’s property described in subparagraph (d)(viii) of the definition clean technology property in subsection (1): (a) where the property is temporarily operated in a manner that is a non-clean technology use solely because of a deficiency, failing or shutdown of the system of which it is a part, and that deficiency, failing or shutdown is beyond the control of the taxpayer, the property is deemed, for the purposes of subsections (11), (12), (16) and (17), not to be operated in a manner that is a non-clean technology use during the period of the deficiency, failing or shutdown, if the taxpayer makes all reasonable efforts to rectify the circumstances within a reasonable time; and (b) for the purpose of paragraph (a), the system referred to in that paragraph may include property of another person or partnership if (i) the property would reasonably be considered to be part of the system if the property were owned by the taxpayer, (ii) the property utilizes electrical energy or heat energy obtained from the system, (iii) the operation of the property is necessary for the system to avoid operation in a manner that is a non-clean technology use, and (iv) at the time the system first became operational, the deficiency, failing or shutdown in the operation of the property could not reasonably have been anticipated to occur within five calendar years after that time. (14) Subsection 127.45(6) of the Act is replaced by the following: Deemed deduction (6) For the purposes of this section, paragraph 12(1)(t), subsection 13(7.1), the description of I in the definition undepreciated capital cost in subsection 13(21) and subsection 53(2) and sections 127.44, 127.48, 127.49, 127.491 and 129, the amount deemed under subsection (2) to have been paid by a taxpayer for a taxation year is deemed to have been deducted from the taxpayer’s tax otherwise payable under this Part for the year. (15) Subsection 127.45(7) of the Act is replaced by the following: Repayment of assistance (7) Where a taxpayer has, in a particular taxation year, repaid (or has not received and can no longer reasonably be expected to receive) an amount of government assistance or non-government assistance that was applied to reduce the cost of a particular property under paragraph (5)( b.1 ) for a preceding taxation year, the amount repaid (or no longer expected to be received) is to be added to the cost to the taxpayer of a separate clean technology property that is deemed to be acquired in the particular year for the purposes of this section, provided that a transaction or event described in paragraph (11)(c) has not occurred in respect of the particular property . (16) Subsection 127.45(9) of the Act is replaced by the following: Unpaid amounts (9) For the purposes of this section, where any part of the capital cost of a taxpayer’s particular clean technology property is unpaid on the day that is 180 days after the end of the taxation year in which a deduction in respect of a clean technology investment tax credit would otherwise be available in respect of the particular property, such amount is to be (a) excluded from the capital cost of the particular property in the year; and (b) added to the capital cost of a separate clean technology property that is deemed to be acquired at the time the amount is paid, provided that a transaction or event described in paragraph (11)(c) has not occurred in respect of the particular property. (17) Section 127.45 of the Act is amended by adding the following after subsection (18): Election by member to pay tax (18.1) A qualifying taxpayer that is a member of a partnership during a fiscal period of the partnership may elect, in prescribed form and manner, to add to its tax payable under this Part for its taxation year that includes the end of the fiscal period the total amount of tax determined for that fiscal period because of subsections (16) and (17) in respect of the partnership. Joint and several, or solidary, liability (18.2) Each current or former member of a partnership is jointly and severally, or solidarily, liable for any portion of the amount of tax — determined because of subsections (16) and (17) in respect of the partnership for a fiscal period — that is not added to the tax payable (a) of a qualifying taxpayer under subsection (17); or (b) of a qualifying taxpayer because of subsection (18.1) and paid by the qualifying taxpayer by its filing-due date for its taxation year that includes the end of the fiscal period. Former member liability (18.3) If a particular taxpayer was, at the time that an amount is determined because of subsections (16) and (17) in respect of a property of the partnership for a taxation year, no longer a member of the partnership, the particular taxpayer’s liability for tax because of subsection (18.2) is limited to the total of all amounts each of which is an amount determined for the particular taxpayer under subsection (2) in respect of the property because of its membership in the partnership. (18) Subsections (1) to (3), (6) to (8), (10) to (12) and (15) to (17) are deemed to have come into force on March 28, 2023. (19) Subsections (4), (9) and (13) are deemed to have come into force on November 21, 2023. (20) Subsection (5) is deemed to have come into force on November 17, 2025. (21) Subsection (14) is deemed to have come into force on April 16, 2024.

53(1) The definitions regular tax credit rate and specified tax credit in subsection 127.46(1) of the Act are replaced by the following: regular tax credit rate means the specified percentage (as defined in subsections 127.44(1), 127.45(1), 127.48(1) and 127.491(1) , as the case may be). ( taux du crédit d’impôt régulier ) specified tax credit means the CCUS tax credit under subsection 127.44(1), the clean technology investment tax credit under subsection 127.45(1), the clean hydrogen tax credit under subsection 127.48(1) and the clean electricity investment tax credit under subsection 127.491(1) . ( crédit d’impôt déterminé ) (2) Subsection 127.46(2) of the Act is replaced by the following: (2) Despite sections 127.44, 127.45, 127.48 and 127.491 , the applicable rate for each specified tax credit of an incentive claimant is the reduced tax credit rate unless the incentive claimant elects in prescribed form and manner to meet the prevailing wage requirements under subsection (3) and the apprenticeship requirements under subsection (5) for each installation taxation year in respect of the specified tax credit. (3) Subsection 127.46(15) of the Act is replaced by the following: Exception (15) This section does not apply to the preparation or installation of clean technology property as defined in subsection 127.45(1) that is described in subparagraph (d)(i) of Class 43.1 in Schedule II to the Income Tax Regulations or in Class 56 in Schedule II to the Income Tax Regulations . (4) Subsections (1) and (2) are deemed to have come into force on April 16, 2024. (5) Subsection (3) is deemed to have come into force on November 28, 2023 and applies to specified property prepared or installed on or after that date.

54(1) The definition clean economy allocation provision in subsection 127.47(1) of the Act is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d): (e) subsection 127.491(12). ( disposition d’allocation pour l’économie propre ) (2) The definition clean economy expenditure in subsection 127.47(1) of the Act is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d): (e) the capital cost of clean electricity property as determined under section 127.491. ( dépense pour l’économie propre ) (3) The definition clean economy provision in subsection 127.47(1) of the Act is amended by striking out “or” at the end of paragraph (e), by adding “or” at the end of paragraph (f) and by adding the following after paragraph (f): (g) section 127.491. ( disposition pour l’économie propre ) (4) The definition clean economy tax credit in subsection 127.47(1) of the Act is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d): (e) a clean electricity investment tax credit (as defined in subsection 127.491(1)). ( crédit d’impôt pour l’économie propre ) (5) Section 127.47 of the Act is amended by adding the following after subsection (4): (4.1) If the cost of a particular property of a partnership is eligible for more than one clean economy tax credit, the partnership may allocate each of those clean economy tax credits to the members of the partnership in accordance with this section and the clean economy allocation provisions, except that no member of the partnership is entitled to more than one clean economy tax credit in respect of that property unless the tax credits are the CCUS tax credit (as defined in subsection 127.44(1)) and the clean hydrogen tax credit (as defined in subsection 127.48(1)) to the extent provided under sections 127.44 and 127.48. (6) Subsections (1) to (4) are deemed to have come into force on April 16, 2024. (7) Subsection (5) is deemed to have come into force on March 28, 2023.

55(1) The definition non-hydrogen or ammonia use in subsection 127.48(1) of the Act is replaced by the following: non-hydrogen or ammonia use means a use of a particular property at a particular time that would, if the property were acquired at that time, result in the property not being an eligible clean hydrogen property , determined without reference to paragraph (b) of that definition. ( utilisation autre que pour l’hydrogène ou l’ammoniac ) (2) Subparagraph (c)(vi) of the definition eligible clean hydrogen property in subsection 127.48(1) of the Act is replaced by the following: (vi) that is incorporated into another property that would not otherwise be described in subparagraphs (i) to (v) if the incorporation causes the other property to satisfy the description in any of subparagraphs (i) to (v). ( bien admissible pour l’hydrogène propre ) (3) Paragraph (e) of the definition preliminary clean hydrogen work activity in subsection 127.48(1) of the Act is replaced by the following: (e) clearing or excavating land, except excavation directly related to the installation of eligible clean hydrogen property . ( travaux préliminaires pour l’hydrogène propre ) (4) Subsection 127.48(3) of the Act is replaced by the following: (3) For the purposes of this section, paragraph 12(1)(t), subsection 13(7.1), the description of I in the definition undepreciated capital cost in subsection 13(21), subsection 53(2) and sections 127.44, 127.45, 127.49, 127.491 and 129, the amount deemed under subsection (2) to have been paid by a taxpayer for a taxation year is deemed to have been deducted from the taxpayer’s tax otherwise payable under this Part for the year. (5) Subsection 127.48(4) of the Act is replaced by the following: Time limit for application (4) A payment on account of tax payable shall not be deemed to be paid under subsection (2) if the taxpayer does not file with the Minister the prescribed form containing prescribed information referred to in subsection (2) in respect of the amount on or before the later of December 31, 2026 and the day that is one year after the taxpayer’s filing-due date for the year and, if the prescribed form is filed after the taxpayer’s filing-due date for the year, no payment by the taxpayer is deemed to arise under that subsection until the prescribed form containing prescribed information has been filed with the Minister. (6) Paragraph 127.48(6)(b) of the Act is replaced by the following: (b) subject to paragraph (j) , in applying the Fuel LCA Model, an assessment of emissions from the production of hydrogen by the project and upstream emissions from the production of inputs to the hydrogen-production process shall be taken into account; (7) Paragraph 127.48(6)(d) of the Act is replaced by the following: (d) if the taxpayer produces hydrogen from eligible hydrocarbons, (i) any captured carbon that is subject to an ineligible use is deemed not to be captured, and (ii) any captured carbon that is subject to an eligible use (as defined in subsection 127.44(1)) is deemed to be permanently stored; (8) The portion of paragraph 127.48(6)(e) of the Act before subparagraph (i) is replaced by the following: (e) if, in connection with hydrogen production , the taxpayer generates or purchases, or proposes to generate or purchase, electricity that is (9) Clause 127.48(6)(e)(i)(B) of the Act is replaced by the following: (B) on-site generation equipment that is used solely to convert any one or a combination of hydrogen, heat described in subparagraph (i)(i) or (ii) or eligible hydrocarbons (with carbon dioxide captured using a CCUS process) into electricity that supports the production of hydrogen from eligible hydrocarbons, the contribution of the electricity to carbon intensity is to be modelled as part of the project, (10) Subsection 127.48(6) of the Act is amended by striking out “and” at the end of paragraph (h) and by replacing paragraph (i) with the following: (i) if, in connection with hydrogen production or electricity production in support of hydrogen production, the taxpayer uses heat energy (i) recovered from hydrogen production, recovered from electricity production by the taxpayer in support of hydrogen production or produced by the taxpayer from the combustion of hydrogen or eligible hydrocarbons (with carbon dioxide captured using a CCUS process), the contribution of the heat to carbon intensity is to be modelled as part of the project, (ii) recovered from a non-hydrogen production process of the taxpayer, or purchased from a vendor that produced the heat from eligible hydrocarbons or recovered the waste heat from a production process, the contribution of the heat to carbon intensity is to correspond with the input carbon intensity of purchased steam in the Fuel LCA Model, and (iii) from a source other than as described in subparagraph (i) or (ii), the carbon intensity of the project is deemed to be greater than 4.5; (j) the contribution to carbon intensity of the following may be disregarded: (i) delivering, collecting, recovering, treating or recirculating water, and (ii) energy used to compress hydrogen beyond 30 bar; (k) emissions related to the production of the following substances or types of energy produced in conjunction with hydrogen shall be attributed to hydrogen production: (i) off-gas (including tail gas and other fuel gas), (ii) oxygen, (iii) nitrogen, if the nitrogen is not used by the taxpayer in another production process or sold for commercial use, and (iv) heat from hydrogen production; (l) emissions related to heat produced in conjunction with electricity production by the taxpayer in support of hydrogen production shall be attributed to hydrogen production, if the heat is not used by the taxpayer in another production process or sold for commercial use; (m) emissions associated with energy used in the purification of hydrogen shall be attributed to hydrogen production; and (n) the Clean Hydrogen Investment Tax Credit – Carbon Intensity Modelling Guidance Document published by the Government of Canada is to apply conclusively with respect to the calculation of carbon intensity, except as otherwise required under this section. (11) The portion of paragraph 127.48(10)(a) of the Act before subparagraph (iii) is replaced by the following: (a) not include any amount (i) in respect of which an amount was previously deducted under this section by any person, (ii) in respect of which any other clean economy tax credit (as defined in subsection 127.47(1) ) was deducted by any person, or (12) Subsection 127.48(11) of the Act is replaced by the following: Repayment of assistance (11) Where a taxpayer has, in a particular taxation year, repaid (or has not received and can no longer reasonably be expected to receive) an amount of government assistance or non-government assistance that was applied to reduce the capital cost of a particular eligible clean hydrogen property under paragraph (10)(c) for a preceding taxation year, the amount repaid (or no longer expected to be received) is to be added to the cost to the taxpayer of a separate eligible clean hydrogen property that is deemed to be acquired in the particular year for the purposes of this section, provided that a transaction or event described in paragraph (21)(c) has not occurred in respect of the particular property . (13) Subsection 127.48(13) of the Act is replaced by the following: Unpaid amounts (13) For the purposes of this section, where any part of the capital cost of a taxpayer’s particular eligible clean hydrogen property is unpaid on the day that is 180 days after the end of the taxation year in which a deduction in respect of a clean hydrogen tax credit would otherwise be available in respect of the particular property, such amount is to be (a) excluded from the capital cost of the particular property in the year; and (b) added to the capital cost of a separate eligible clean hydrogen property that is deemed to be acquired by the taxpayer at the time the amount is paid, provided that a transaction or event described in paragraph (21)(c) has not occurred in respect of the particular property. Property deemed in respect of qualified project (13.1) A property is deemed to have been acquired in respect of a qualified clean hydrogen project if (a) the property was acquired in respect of a clean hydrogen project that was not a qualified clean hydrogen project because the Minister of Natural Resources was not accepting the filing of clean hydrogen project plans during the taxation year in which the property was acquired; and (b) in a subsequent taxation year, the project becomes a qualified clean hydrogen project. (14) Subsection 127.48(15) of the Act is replaced by the following: Annual information reporting requirement (15) If a clean hydrogen tax credit was deducted in any taxation year by a taxpayer in respect of a qualified clean hydrogen project, the taxpayer shall file, with its return of income for each taxation year that begins or ends during the compliance period in respect of the project, a prescribed form containing prescribed information in respect of the operations of the project. (15) Section 127.48 of the Act is amended by adding the following after subsection (16): Shared filing (16.1) If more than one person is required by this section to file any documentation or information with the Minister or the Minister of Natural Resources in respect of a clean hydrogen project (including, but not limited to, a revised clean hydrogen project plan, a form described in subsection (15) or a compliance report described in subsection (16)), the filing with full and accurate disclosure by any one of such persons of the documentation or information is deemed to have been made by each person to whom the relevant requirement applies. (16) Subsection 127.48(25) of the Act is replaced by the following: Recovery and recapture — partnerships (25) Subject to section 127.47 , if subsection (12) has at any time applied to add an amount in computing the clean hydrogen tax credit of a current or former member of a partnership, subsections (18) to (23) apply to determine amounts in respect of the partnership as if the partnership was a taxable Canadian corporation, its fiscal period were its taxation year and it had deducted all of the clean hydrogen tax credits that were previously added in computing the clean hydrogen tax credit of any member of the partnership because of the application of subsection (12) in respect of its partnership interest. (17) Subsections 127.48(27) and (28) of the Act are replaced by the following: Election by member (27) A taxable Canadian corporation that is a member of a partnership during a fiscal period of the partnership may elect, in prescribed form and manner, to add to its tax payable under this Part for its taxation year that includes the end of the fiscal period the total amount of tax determined for that fiscal period because of subsection (25) in respect of the partnership. Joint and several, or solidary, liability (28) Each current or former member of a partnership is jointly and severally, or solidarily, liable for any portion of the amount of tax — determined because of subsection (25) in respect of the partnership for a fiscal period — that is not added to the tax payable (a) of a qualifying taxpayer under subsection (26); or (b) of a taxable Canadian corporation because of subsection (27) and paid by the corporation by its filing-due date for its taxation year that includes the end of the fiscal period . Former member liability (28.1) If a particular taxpayer was, at the time that an amount is determined because of subsection (25) in respect of the partnership for a taxation year, no longer a member of the partnership, the particular taxpayer’s liability for tax because of subsection (28) is limited to the total of all amounts each of which is an amount determined for the particular taxpayer under subsection (2) because of its membership in the partnership. (18) Subsections (1) to (3) and (5) to (17) are deemed to have come into force on March 28, 2023. (19) Subsection (4) is deemed to have come into force on April 16, 2024.

56(1) The definition CTM use in subsection 127.49(1) of the Act is replaced by the following: CTM use means the use of a property all or substantially all in (a) activities described in paragraph (a) or (c) of the definition qualified zero emission technology manufacturing activities in section 5202 of the Income Tax Regulations ; (b) activities described in paragraph (a) or (b) of the definition qualifying mineral activity if the property is used to produce primarily qualifying materials, determined based on the value of all commercial outputs in accordance with subsection (2.2); or (c) activities described in any of paragraphs (c) to (f) of the definition qualifying mineral activity if the property is used to produce all or substantially all qualifying materials, determined based on the value of all commercial outputs in accordance with subsection (2.2). ( utilisation pour la FTP ) (2) Paragraph (d) of the definition CTM property in subsection 127.49(1) of the Act is amended by striking out “or” at the end of subparagraph (v), by adding “or” at the end of subparagraph (vi) and by adding the following after subparagraph (vi): (vii) is incorporated into another property described in any of subparagraphs (i) to (vi), as part of a refurbishment of the other property provided that on completion of the refurbishment the other property is still described in any of subparagraphs (i) to (vi). ( bien de FTP ) (3) The definition qualifying material in subsection 127.49(1) of the Act is amended by striking out “and” at the end of paragraph (e) and by adding the following after paragraph (f): (g) antimony; (h) gallium; (i) germanium; (j) indium; and (k) scandium. ( matériau admissible ) (4) Paragraphs (b) to (e) of the definition qualifying mineral activity in subsection 127.49(1) of the Act are replaced by the following: (b) a specified mineral processing activity that is performed at a mine site or well site; (c) a specified mineral processing activity that is performed at a location other than a location described in paragraph (b); (d) a recycling activity that is (i) sorting, disassembly or shredding of a recyclable material, or (ii) a material processing activity substantially similar to a specified mineral processing activity ; (e) a synthetic graphite activity that is (i) performed during or after the graphitization stage, and (ii) a material processing activity substantially similar to a specified mineral processing activity; or (f) spheronization of graphite or coating of spheronized graphite. ( activité minière admissible ) (5) Paragraphs (b) to (f) of the definition specified percentage in subsection 127.49(1) of the Act are replaced by the following: (b) subject to paragraph (a) (i) after December 31, 2023 and before January 1, 2032, 30%, (ii) after December 31, 2031 and before January 1, 2033, 20%, (iii) after December 31, 2032 and before January 1, 2034, 10%, and (iv) after December 31, 2033 and before January 1, 2035, 5%; and (c) after December 31, 2034, nil. ( pourcentage déterminé ) (6) Subsection 127.49(1) of the Act is amended by adding the following in alphabetical order: independent engineer or geoscientist means an individual who (a) is a qualified professional engineer or professional geoscientist as defined in subsection 127(9); and (b) is at all times at arm’s length with, independent of, and not employed by, each taxpayer claiming a related CTM investment tax credit. ( ingénieur ou géoscientifique indépendant ) refurbishment means significant alterations, renovations, improvements or additions to a property to substantially (a) extend its useful life; (b) increase its capacity; or (c) improve its efficiency. ( remise en état ) safe harbour price of a commercial output means the five-year historical average spot price, determined at the end of the taxation year of a taxpayer in which a CTM investment tax credit is deducted in respect of a CTM property, of that output calculated (a) using prices from a recognized commodities exchange; or (b) if prices referred to in paragraph (a) are not available in respect of the output, in accordance with normal and accepted commercial practices in the industry. ( prix au titre de la règle d’exonération ) safe harbour price method , in respect of a CTM property of a taxpayer, means the determination, on an annual basis, of the value of all commercial outputs from the property based on (a) the safe harbour price of the expected commercial outputs from the property if the year for which the determination is made is prior to a year in which the property was used by the taxpayer in commercial production; and (b) the safe harbour price of the actual commercial outputs from the property in a year in which the property was used by the taxpayer in commercial production. ( méthode de détermination du prix au titre de la règle d’exonération ) specified fair market value method , in respect of a CTM property, means the determination, on an annual basis, of the value of all the commercial outputs from the property based on (a) the fair market value, determined at the end of the relevant taxation year, of the expected commercial outputs from the property if the year for which the determination is made is prior to a year in which the property was used by the taxpayer in commercial production; and (b) the fair market value, determined at the end of the relevant taxation year, of the actual commercial outputs from the property in a year in which the property was used by the taxpayer in commercial production. ( méthode de détermination de la juste valeur marchande déterminée ) specified mineral processing activity means a mineral processing activity (including crushing, grinding, milling, separation, sieving, screening, froth floatation, leaching, recrystallization, precipitation, drying, evaporation, heating, calcinating, roasting, smelting, casting of ingots, refining, purification, distillation, electrodeposition and surface roughening of electrodeposited foil) that occurs prior to or as part of a process intended to (a) increase the purity of at least one qualifying material; or (b) produce a material with non-trace amounts of a single qualifying material, and without non-trace amounts of any elements other than permitted elements. ( activité de traitement des minéraux déterminée ) (7) Subsection 127.49(3) of the Act is replaced by the following: (2.1) Notwithstanding subsection (2), a CTM investment tax credit in respect of property used, or to be used, by the taxpayer or by a partnership of which the taxpayer is a member, in any activity described in paragraph (a) or (b) of the definition qualifying mineral activity in subsection (1), is deemed to be nil unless a taxpayer files with the Minister, together with the form and information described in subsection (2), a certification by an independent engineer or geoscientist in respect of the taxpayer in the prescribed form attesting that the property is being used, or is to be used, (a) at a particular mine site or well site of the taxpayer or of a partnership of which the taxpayer is a member, as the case may be; and (b) in accordance with a plan that primarily targets qualifying materials, determined based on the value of all commercial outputs expected to be produced in accordance with subsection (2.2). Valuation of qualifying mineral activity outputs (2.2) In the prescribed form referred to in subsection (2) that is filed by a taxpayer for a taxation year, the taxpayer must elect, in respect of each CTM property of the taxpayer for which the taxpayer claims a CTM investment tax credit for that year, that the determination of the value of all commercial outputs from that property is to be based on either (a) the specified fair market value method, or (b) the safe harbour price method. Time limit for application (3) A payment on account of tax payable shall not be deemed to be paid under subsection (2) if the taxpayer does not file with the Minister the prescribed form containing prescribed information referred to in subsection (2) in respect of the amount on or before the later of December 31, 2026 and the day that is one year after the taxpayer’s filing-due date for the year and, if the prescribed form is filed after the taxpayer’s filing-due date for the year, no payment by the taxpayer is deemed to arise under that subsection until the prescribed form containing the prescribed information has been filed with the Minister. (8) The portion of paragraph 127.49(5)(a) of the Act before subparagraph (iii) is replaced by the following: (a) not include any amount (i) in respect of which an amount was previously deducted under this section by any person, (ii) in respect of which any other clean economy tax credit (as defined in subsection 127.47(1) ) was deducted by any person, (ii.1) in respect of any part of the capital cost of a property if a CCUS tax credit (as defined in subsection 127.44(1)) or a clean hydrogen tax credit (as defined in subsection 127.48(1)) was deducted by any person in respect of that property, or (9) Subsection 127.49(6) of the Act is replaced by the following: Deemed deduction (6) For the purposes of this section, paragraph 12(1)(t), subsection 13(7.1), the description of I in the definition undepreciated capital cost in subsection 13(21) and subsection 53(2) and sections 127.44, 127.45, 127.48, 127.491 and 129, the amount deemed under subsection (2) to have been paid by a taxpayer for a taxation year is deemed to have been deducted from the taxpayer’s tax otherwise payable under this Part for the year. (10) Subsection 127.49(7) of the Act is replaced by the following: Repayment of assistance (7) Where a taxpayer has, in a particular taxation year, repaid (or has not received and can no longer reasonably be expected to receive) an amount of government assistance or non-government assistance that was applied to reduce the cost of a particular property under paragraph (5)(c) for a preceding taxation year, the amount repaid (or no longer expected to be received) is to be added to the cost to the taxpayer of a separate CTM property that is deemed to be acquired in the particular year for the purposes of this section, provided that a transaction or event described in paragraph (11)(c) has not occurred in respect of the particular property . (11) Subsection 127.49(9) of the Act is replaced by the following: Unpaid amounts (9) For the purposes of this section, where any part of the capital cost of a taxpayer’s particular CTM property is unpaid on the day that is 180 days after the end of the taxation year in which a deduction in respect of a CTM investment tax credit would otherwise be available in respect of the particular property, such amount is to be (a) excluded from the capital cost of the particular property in the year; and (b) added to the capital cost of a separate CTM property that is deemed to be acquired at the time the amount is paid, provided that a transaction or event described in paragraph (11)(c) has not occurred in respect of the particular property. (12) Section 127.49 of the Act is amended by adding the following after subsection (18): Election by member to pay tax (18.1) A qualifying taxpayer that is a member of a partnership during a fiscal period of the partnership may elect, in prescribed form and manner, to add to its tax payable under this Part for its taxation year that includes the end of the fiscal period the total amount of tax determined for that fiscal period because of subsections (16) and (17) in respect of the partnership. Joint and several, or solidary, liability (18.2) Each current or former member of a partnership is jointly and severally, or solidarily, liable for any portion of the amount of tax — determined because of subsections (16) and (17) in respect of the partnership for a fiscal period — that is not added to the tax payable (a) of a qualifying taxpayer under subsection (17); or (b) of a qualifying taxpayer because of subsection (18.1) and paid by the qualifying taxpayer by its filing-due date for its taxation year that includes the end of the fiscal period. Former member liability (18.3) If a particular taxpayer was, at the time that an amount is determined because of subsections (16) and (17) in respect of a property of the partnership for a taxation year, no longer a member of the partnership, the particular taxpayer’s liability for tax because of subsection (18.2) is limited to the total of all amounts each of which is an amount determined for the particular taxpayer under subsection (2) in respect of the property because of its membership in the partnership. (13) Subsections (1), (2), (4) to (8) and (10) to (12) are deemed to have come into force on January 1, 2024. (14) Subsection (3) applies in respect of property that is acquired and becomes available for use on or after November 4, 2025. (15) Subsection (9) is deemed to have come into force on April 16, 2024.

57(1) The Act is amended by adding the following after section 127.49: 127.491 (1) The following definitions apply in this section. actual emission intensity means the emission intensity of a specified natural gas energy system of a qualifying entity, based on the actual carbon dioxide emissions from the production of electrical energy by the system. ( intensité des émissions réelle ) average actual emission intensity means, for the compliance period of a qualified natural gas energy system, the number determined by the formula ((A × B) + (C × D) + (E × F) + (G × H) + (I × J)) ÷ K where A is the actual emission intensity of the system for the first operating year of the compliance period; B is the quantity, in gigawatt hours, of electrical energy produced by the system in the first operating year of the compliance period; C is the actual emission intensity of the system for the second operating year of the compliance period; D is the quantity, in gigawatt hours, of electrical energy produced by the system in the second operating year of the compliance period; E is the actual emission intensity of the system for the third operating year of the compliance period; F is the quantity, in gigawatt hours, of electrical energy produced by the system in the third operating year of the compliance period; G is the actual emission intensity of the system for the fourth operating year of the compliance period; H is the quantity, in gigawatt hours, of electrical energy produced by the system in the fourth operating year of the compliance period; I is the actual emission intensity of the system for the fifth operating year of the compliance period; J is the quantity, in gigawatt hours, of electrical energy produced by the system in the fifth operating year of the compliance period; and K is the total quantity, in gigawatt hours, of electrical energy produced by the system during the compliance period. ( intensité des émissions réelle moyenne ) clean electricity investment tax credit of a qualifying entity for a taxation year means the total of all amounts each of which is (a) the specified percentage of the capital cost to the qualifying entity of clean electricity property that is acquired by the entity in the year; or (b) an amount required by subsection (12) to be added in computing the entity’s clean electricity investment tax credit at the end of the year. ( crédit d’impôt à l’investissement pour l’électricité propre ) clean electricity property means property of a qualifying entity (a) that is not part of a project the construction of which started before March 28, 2023 (and for this purpose, construction does not include obtaining permits or regulatory approval, conducting environmental assessments, community consultations or impact assessment studies or similar activities); (b) that is situated in Canada (including property described in subparagraph (d)‍(v) or (xiv) of Class 43.‍1 in Schedule II to the Income Tax Regulations that is installed in the exclusive economic zone of Canada) and intended for use exclusively in Canada; (c) that has not been used, or acquired for use or lease, for any purpose whatever before it was acquired by the entity; (d) that, if it is to be leased by a qualifying entity to another person or partnership, is (i) leased to a qualifying entity or a partnership all the members of which are qualifying entities, and (ii) leased in the ordinary course of carrying on a business in Canada by the qualifying entity whose principal business is selling or servicing property of that type, or whose principal business is leasing property, lending money, purchasing conditional sales contracts, accounts receivable, bills of sale, chattel mortgages or hypothecary claims on movables, bills of exchange or other obligations representing all or part of the sale price of merchandise or services, or any combination thereof; and (e) that is (i) property that would be described in subparagraph (d)(ii) of Class 43.1 in Schedule II to the Income Tax Regulations , if that subparagraph were read without reference to its clause (A), (ii) described in subparagraph (d)(v), (vi) or (xiv) of Class 43.1 in Schedule II to the Income Tax Regulations , but excluding a test wind turbine (within the meaning assigned by subsection 1219(3) of the Income Tax Regulations ), (iii) concentrated solar energy equipment , as defined in subsection 127.45(1), that is part of a system used solely for the purpose of generating electrical energy, exclusively from concentrated sunlight, (iv) nuclear energy property, (v) equipment that (A) is part of a system that (I) exports more electrical energy than heat energy on a net basis, as determined on an annual basis, and (II) does not extract fossil fuels for sale, (B) is used exclusively for the purpose of generating electrical energy, or a combination of electrical energy and heat energy, solely from geothermal energy, and (C) is described in subparagraph (d)(vii) of Class 43.1 in Schedule II to the Income Tax Regulations , (vi) waste biomass electricity generation equipment , as defined in subsection 127.45(1), that is part of a system that exports more electrical energy than heat energy on a net basis, as determined on an annual basis, (vii) described in subparagraph (d)(xviii) or (xix) of Class 43.1 in Schedule II to the Income Tax Regulations , but excluding equipment that uses any fossil fuel in operation, (viii) qualified natural gas energy equipment, (ix) qualified interprovincial transmission equipment, or (x) incorporated into another property described in any of subparagraphs (i) to (ix), as part of a refurbishment of the other property provided that on completion of the refurbishment the other property is still described in any of subparagraphs (i) to (ix). ( bien pour l’électricité propre ) compliance period in respect of a specified natural gas energy system of a taxpayer, means the period beginning on the start-up date of the system and ending on the last day of the fifth operating year of the system. ( période de conformité ) dedicated geological storage has the same meaning as in subsection 127.44(1). ( stockage géologique dédié ) designated provincial Crown corporation means a corporation (a) not less than 90% of the shares (except directors’ qualifying shares) or of the capital of which is owned by one or more persons each of which is His Majesty in right of a province; (b) that is Northwest Territories Power Corporation, Qulliq Energy Corporation or Yukon Energy Corporation; or (c) all of the shares (except directors’ qualifying shares) or of the capital of which is owned by one or more persons each of which is a corporation described in paragraph (a) or (b). ( société d’État provinciale désignée ) emission intensity in respect of a qualified natural gas energy system, means the tonnes of carbon dioxide emissions released into the atmosphere for each gigawatt hour of electrical energy produced as determined by the formula A ÷ B where A is the number determined by the formula C − D − E where C is the quantity of carbon dioxide emissions, expressed in tonnes, during an operating year, from the combustion of fuel in the system, as determined in a manner that is acceptable to the Minister of Natural Resources, D is the quantity of carbon dioxide emissions, expressed in tonnes, attributable to the production of useful thermal energy exported by the system, during the operating year, as determined in a manner that is acceptable to the Minister of Natural Resources, and E is the quantity of carbon dioxide captured from the system and stored in dedicated geological storage, expressed in tonnes, during the operating year, as determined in a manner that is acceptable to the Minister of Natural Resources; and B is the quantity of electrical energy produced by the system during the operating year, expressed in gigawatt hours, as determined in a manner that is acceptable to the Minister of Natural Resources. ( intensité des émissions ) government assistance has the same meaning as in subsection 127(9). ( aide gouvernementale ) ineligible use means (a) in respect of a property other than qualified natural gas energy equipment, use of the property at a time that would, if the property were acquired at that time, result in the property not being a clean electricity property, determined without reference to paragraph (c) of the definition clean electricity property ; and (b) in respect of a property that is qualified natural gas energy equipment, (i) use of the property at a time that would, if the property were acquired at that time, result in the property not being a clean electricity property, determined without reference to subparagraph (a)(vi) of the definition qualified natural gas energy equipment and paragraph (c) of the definition clean electricity property , and (ii) any use of the system described in paragraph (a) of the definition qualified natural gas energy equipment , if the actual emission intensity of the system in an operating year is greater than 65 tonnes of carbon dioxide per gigawatt hour of electrical energy, for an operating year that begins after the fifth operating year but before the twenty-first operating year of the system. ( utilisation non admissible ) non-government assistance has the same meaning as in subsection 127(9). ( aide non gouvernementale ) nuclear energy property means property that (a) is part of a fixed location system that (i) is used all or substantially all to generate electrical energy, or a combination of electrical energy and heat energy, from nuclear fission, as determined on an annual basis, and (ii) exports more electrical energy than heat energy on a net basis, as determined on an annual basis; (b) is (i) a reactor, (ii) a reactor vessel, (iii) a reactor control rod, (iv) a moderator, (v) cooling equipment, (vi) heat generating equipment, (vii) nuclear fission fuel handling equipment, (viii) a containment structure, (ix) electrical generating equipment, (x) equipment for the distribution of heat energy within the system, or (xi) equipment that is physically and functionally integrated with property described in any of subparagraphs (i) to (x) and that is ancillary equipment (such as control equipment) used solely to support the functioning of property described in any of subparagraphs (i) to (x); and (c) is not (i) nuclear fission fuel, (ii) property used in nuclear waste disposal or storage, (iii) transmission equipment, (iv) distribution equipment, (v) a vehicle, (vi) property that would be included in Class 17 in Schedule II to the Income Tax Regulations if that Class were read without reference to its paragraph (a.‍1), (vii) equipment used to export heat energy from the system, or (viii) a building or other structure. ( bien pour l’énergie nucléaire ) operating year of a specified natural gas energy system, means each cumulative 365-day period, the first of which begins on the start-up date of a qualifying entity’s specified natural gas energy system, disregarding any period during which the system is not operating.‍ ( année d’exploitation ) preliminary work activity has the same meaning as in subsection 127.45(1), except that the reference to “clean technology property” in paragraph (c) shall be read as “clean electricity property”. ( travaux préliminaires ) qualified interprovincial transmission equipment means property that is primarily used, as determined on an annual basis, to transmit or manage electrical energy that originates in, or is destined for, a province other than the province in which the property is located and (a) that is (i) equipment for the transmission of electrical energy, including cables and switches, that is rated for voltages of at least 69 kilovolts, (ii) electrical transmission structures, including towers and lattices, or (iii) related equipment used to manage electrical energy, including transformers, electric power conditioning equipment and control equipment, that is directly connected to equipment described in subparagraph (i) or (ii); and (b) that is not a building or distribution equipment. ( matériel de transmission interprovinciale admissible ) qualified natural gas energy equipment means property (a) that is part of a system that meets the following conditions: (i) the system (A) is fuelled all or substantially all by the combustion of natural gas, as determined on an annual basis, and (B) is not fuelled by anything other than the combustion of gaseous fuels, (ii) the system is used solely for the purpose of generating electrical energy, or a combination of electrical energy and heat energy, determined without reference to capturing carbon dioxide, (iii) the system exports more electrical energy than heat energy on a net basis as determined on an annual basis, (iv) the system is physically and functionally integrated with equipment that captures and prepares or compresses carbon dioxide for transportation, (v) less than 50% of the gross electrical energy generated by the system is used to power the equipment referred to in subparagraph (iv) as determined on an annual basis, (vi) the system is not expected to exceed an emission intensity of 65 tonnes of carbon dioxide per gigawatt hour of gross electrical energy generated, and (vii) a system evaluation has been issued for the system by the Minister of Natural Resources, in the form and manner determined by the Minister of Natural Resources; (b) that is (i) electrical generating equipment, (ii) heat generating equipment used primarily for the purpose of producing heat energy to operate the electrical generating equipment described in subparagraph (i), (iii) equipment that generates both electrical and heat energy, (iv) equipment that is to be used solely (A) for capturing carbon dioxide that is generated by the system, or (B) to prepare or compress for transportation carbon dioxide captured from the system, (v) heat recovery equipment used primarily for the purpose of conserving energy, or reducing the requirement to acquire energy, by extracting for reuse thermal waste that is generated by equipment referred to in any of subparagraphs (i) to (iv) or (vi), (vi) equipment for the distribution of heat energy within the system, (vii) equipment that is physically and functionally integrated with equipment described in any of subparagraphs (i) to (vi) and that is ancillary equipment (such as control equipment) used solely to support the functioning of equipment described in any of those subparagraphs, or (viii) described in any of subparagraphs (i) to (vii) that is incorporated into a system that would not otherwise be described in paragraph (a) if the incorporation causes the system to satisfy the description in paragraph (a); (c) in the case of equipment that is acquired before the start-up date of the system referred to in paragraph (a), that is verified by the Minister of Natural Resources as being equipment described in paragraph (b); and (d) that is not (i) a building or other structure, (ii) transmission equipment, (iii) distribution equipment, (iv) equipment used to export heat energy from the system, (v) fuel storage or fuel handling equipment, or (vi) pollution abatement equipment. ( matériel d’énergie alimenté au gaz naturel admissible ) qualified natural gas energy system means a system that is described in paragraph (a) of the definition qualified natural gas energy equipment . ( système énergétique alimenté au gaz naturel admissible ) qualified validation firm , in respect of a specified natural gas energy system of a taxpayer, means an engineer or engineering firm that (a) is registered and in good standing with a professional association that has the authority or recognition by law of a jurisdiction in Canada to regulate the profession of engineering in (i) the jurisdiction where the system is located, or (ii) if there is no professional association in the jurisdiction described in subparagraph (i), a jurisdiction in Canada where a professional association regulates the profession of engineering; (b) has appropriate insurance coverage; (c) at all times, is independent of, deals at arm’s length with and is not an employee of the taxpayer; and (d) meets the requirements described in guidelines published by the Minister of Natural Resources. ( firme admissible de validation ) qualified verification firm , in respect of a specified natural gas energy system of a taxpayer, means an individual or firm that (a) is either (i) an engineer or an engineering firm that is registered and in good standing with a professional association that has the authority or recognition by law of a jurisdiction in Canada to regulate the profession of engineering in (A) the jurisdiction where the system is located, or (B) if there is no professional association in the jurisdiction described in clause (A), a jurisdiction in Canada where a professional association regulates the profession of engineering, or (ii) a verification body accredited and in good standing under the Clean Fuel Regulations ; (b) has appropriate insurance coverage; (c) at all times, is independent of, deals at arm’s length with and is not an employee of (i) the taxpayer, or (ii) the qualified validation firm in respect of the system; (d) meets the requirements described in guidelines published by the Minister of Natural Resources; and (e) has expertise in auditing natural gas systems to demonstrate compliance with the Regulations Limiting Carbon Dioxide Emissions from Natural Gas-fired Generation of Electricity . ( firme admissible de vérification ) qualifying corporation means (a) a taxable Canadian corporation; (b) a designated provincial Crown corporation; (c) a corporation described in paragraph 149(1)(d.5) not less than 90% of the shares or the capital of which are owned by one or more entities each of which is (i) a municipality in Canada, or (ii) an aboriginal government (as defined in subsection 241(10)) — or a similar Indigenous governing body — described in paragraph 149(1)(c); (d) a corporation described in paragraph 149(1)(d.6) all of the shares (except directors’ qualifying shares) or the capital of which are owned by one or more of (i) a municipality in Canada, (ii) an aboriginal government (as defined in subsection 241(10)) — or a similar Indigenous governing body — described in paragraph 149(1)(c), or (iii) a corporation described in paragraph 149(1)(d.5); (e) a corporation all of the shares (except directors’ qualifying shares) or of the capital of which are owned by one or more municipalities in Canada in combination with one or more persons each of which is described in the definition designated provincial Crown corporation ; or (f) a corporation to which paragraph 149(1)(o.2) applies. ( société admissible ) qualifying entity means a qualifying corporation or a qualifying trust. ( entité admissible ) qualifying trust means, at all relevant times, a trust (a) each beneficiary of which is a corporation described in paragraph 149(1)(o.2); (b) that is a limited partner of a partnership; and (c) the sole undertaking of which is the holding of its interest in the partnership together with any ancillary activities. ( fiducie admissible ) refurbishment means significant alterations, renovations, improvements or additions to a property to substantially (a) extend its useful life; (b) increase its capacity; or (c) improve its efficiency. ( remise en état ) specified natural gas energy system means a system that is, or was at any time, a qualified natural gas energy system. ( système énergétique alimenté au gaz naturel déterminé ) specified percentage means, in respect of a clean electricity property of a qualifying entity that is acquired (a) before April 16, 2024, determined without reference to subsection (7), nil; (b) subject to paragraph (a), on or after April 16, 2024 and before January 1, 2035, 15%; and (c) after December 31, 2034, nil. ( pourcentage déterminé ) start-up date of a specified natural gas energy system means the first day on which the system generates electrical energy for sale. ( jour du début du projet ) system plan means a plan for a qualified natural gas energy system of a qualifying entity that (a) has been prepared by a qualified validation firm; (b) includes a front-end engineering design study (or an equivalent study as determined by the Minister of Natural Resources) for the system; (c) sets out (i) an expected emission intensity of the electrical energy to be produced by the system that is below 65 tonnes carbon dioxide per gigawatt hour, (ii) an expected ratio of net electrical energy to net heat energy exported that is above 1, and (iii) an expected ratio of electrical energy used to power equipment that captures and prepares or compresses carbon dioxide to gross electrical energy produced that is below 0.5; (d) contains any information required in guidelines published by the Minister of Natural Resources; and (e) is filed by the entity with the Minister of Natural Resources, in the form and manner determined by the Minister of Natural Resources. ( plan du système ) Clean electricity investment tax credit (2) If a qualifying entity files a prescribed form containing prescribed information with the Minister on or before its filing-due date for its taxation year, (a) in the case of an entity that is a taxable Canadian corporation or a qualifying trust, the entity is deemed to have paid on its balance-due day for the year an amount on account of the entity’s tax payable under this Part for the year equal to the entity’s clean electricity investment tax credit for the year; and (b) subject to subsection (3), in the case of an entity that is described in any of paragraphs (b) to (f) of the definition qualifying corporation in subsection (1), the Minister shall, with all due dispatch, pay to the entity an amount equal to its clean electricity investment tax credit for the year. Section 149 entities (3) Subsection (2) does not apply to an entity that is described in any of paragraphs (b) to (f) of the definition qualifying corporation in subsection (1) unless the entity agrees in writing with the Minister to be subject to the provisions of this Act in respect of the entity’s clean electricity investment tax credit, with any modifications to those provisions that the circumstances require. Interpretive rule — nuclear energy property (4) For the purpose of this section, where a qualifying entity has a leasehold interest in a nuclear energy property (a) subject to subsection (7), the entity is deemed to acquire the property when it acquires the leasehold interest in the property; (b) the capital cost of the leasehold interest in the property to the entity is deemed to be its capital cost of the property; and (c) the property is deemed to be disposed of by the entity when it ceases to hold the leasehold interest in the property for proceeds of disposition equal to the fair market value of the property at the time it ceases to hold the leasehold interest. Amount payable (5) Any amount payable by a qualifying entity under this section is deemed to be payable as a tax or as a payment in lieu of tax, as the case may be. Time limit for application (6) If the qualifying entity files with the Minister the prescribed form containing prescribed information referred to in subsection (2) after its filing-due date for the year but on or before the later of the day that is one year after that date and December 31, 2026, subsection (2) applies to the entity except that no payment is deemed to arise under that subsection until the prescribed form containing prescribed information has been filed with the Minister. Time of acquisition (7) For the purpose of this section, clean electricity property is deemed not to have been acquired by a qualifying entity before the property is considered to have become available for use by the entity, determined without reference to paragraphs 13(27)(c) and (28)(d). Qualified natural gas energy system evaluation (8) The Minister of Natural Resources may request from a qualifying entity all documentation and information necessary for the Minister of Natural Resources to complete a qualified natural gas energy system evaluation, including a system plan, and may refuse to complete the evaluation if such documentation or information is not provided by the entity. Special rules — adjustments (9) For the purpose of the definition clean electricity investment tax credit in subsection (1), the capital cost of a clean electricity property to a qualifying entity shall (a) not include any amount (i) in respect of which an amount was previously deducted under this section by any person, (ii) in respect of which any other clean economy tax credit (as defined in subsection 127.47(1)) was deducted by any person, (iii) that has, by virtue of section 21, been added to the cost of a property, (iv) in respect of a qualified natural gas energy system, if a CCUS tax credit (as defined in subsection 127.44(1)) was deducted by any person in respect of any property that is part of the system, (v) in respect of an expenditure incurred for a preliminary work activity, or (vi) if a CCUS tax credit (as defined in subsection 127.44(1)) or a clean hydrogen tax credit (as defined in subsection 127.48(1)) was deducted in respect of any part of the capital cost of the property by any person; (b) be determined without reference to subsections 13(7.‍1) and (7.‍4); (c) be reduced by the total of all amounts, each of which can reasonably be considered to be in respect of the property and is (i) an amount of any government assistance or non-government assistance received by the qualifying entity in or before the taxation year in which the property was acquired, or (ii) an amount not described in subparagraph (i) that, in the taxation year, the qualifying entity is entitled to or can reasonably be expected to receive and that would be government assistance or non-government assistance if it were received by the entity; and (d) be determined with reference to subsections 127(11.‍6) to (11.‍8) in respect of an expenditure or cost to a person except that (i) the reference in subsection 127(11.‍6) to subsection 127(11.‍5) is to be read as a reference to section 127.‍491, (ii) the reference in subsection 127(11.‍6) to subsection 127(26) is to be read as a reference to subsection 127.‍491(14), and (iii) the term “a qualified expenditure” is to be read as “an expenditure eligible to be added to the capital cost of a clean electricity property”. Deemed deduction (10) For the purposes of this section, paragraph 12(1)(t), subsection 13(7.1), the description of I in the definition undepreciated capital cost in subsection 13(21), subsection 53(2) and sections 127.44, 127.45, 127.48, 127.49 and 129, the amount determined under subsection (2) for a qualifying entity for a taxation year is deemed to have been deducted from its tax otherwise payable under this Part for the year. Repayment of assistance (11) Where a qualifying entity has, in a particular taxation year, repaid (or has not received and can no longer reasonably be expected to receive) an amount of government assistance or non-government assistance that was applied to reduce the capital cost of a particular property under paragraph (9)‍(c) for a preceding taxation year, the amount repaid (or no longer expected to be received) is to be added to the capital cost to the entity of a separate clean electricity property that is deemed to be acquired in the particular year for the purposes of this section, provided that a transaction or event described in paragraph (16)(c) has not occurred in respect of the particular property. Partnerships (12) Subject to section 127.47, where, in a particular taxation year of a qualifying entity that is a member of a partnership, an amount would be determined under subsection (2) in respect of the partnership, for its taxation year that ends in the particular year, if the partnership were a taxable Canadian corporation and its fiscal period were its taxation year, the portion of that amount that can reasonably be considered to be the qualifying entity’s share thereof shall be added in computing the clean electricity investment tax credit of the qualifying entity at the end of the particular year. Trust — assistance received by beneficiary (13) For the purposes of computing a clean electricity investment tax credit, where at a particular time a qualifying corporation described in paragraph (a) of the definition qualifying trust is a beneficiary of a qualifying trust, and the beneficiary or the trust has received, is entitled to receive or can reasonably be expected to receive government assistance or non-government assistance, the amount of that assistance that may reasonably be considered to be in respect of a clean electricity property for which a clean electricity investment tax credit is allocated by a partnership to the trust shall be deemed to have been received by the partnership as government assistance or non-government assistance, as the case may be, in respect of the property. Unpaid amounts (14) For the purposes of this section, where any part of the capital cost of a qualifying entity’s particular clean electricity property is unpaid on the day that is 180 days after the end of the taxation year in which a deduction in respect of a clean electricity investment tax credit would otherwise be available in respect of the particular property, such amount is deemed to be (a) excluded from the capital cost of the particular property in the year; and (b) added to the capital cost of a separate clean electricity property that is deemed to be acquired by the qualifying entity at the time the amount is paid, provided that a transaction or event described in paragraph (16)(c) has not occurred in respect of the particular property. Tax shelter investment (15) Subsection (2) does not apply if a clean electricity property — or an interest in a person or partnership that has, directly or indirectly, an interest in, or for civil law, a right in, such property — is a tax shelter investment for the purpose of section 143.2. Recapture — conditions for application (16) Subsection (17) applies in a taxation year of a taxpayer if (a) the taxpayer acquired a particular property that is (i) a clean electricity property, other than qualified natural gas energy equipment, in the year or any of the preceding 10 calendar years, or (ii) a clean electricity property that is qualified natural gas energy equipment, in the year or any of the preceding 20 calendar years; (b) the taxpayer became entitled to a clean electricity investment tax credit in respect of the capital cost, or a portion of the capital cost, of the particular property; and (c) in the year, the particular property (or another property that incorporates the particular property) is converted to an ineligible use, is exported from Canada or is disposed of without having been previously exported or converted to an ineligible use. Recapture (17) If this subsection applies in a taxation year of a taxpayer in respect of a particular property, the taxpayer is liable to pay an amount for the year, on or before its balance-due day for the year, determined by the formula (A − B) × (C ÷ D) where A is the amount of the taxpayer’s clean electricity investment tax credit in respect of the particular property; B is the total of all amounts each of which can reasonably be considered to be the portion of any amount previously paid by the taxpayer because of subsection (18) in respect of the property; C is an amount, not exceeding the amount determined for D, equal to (a) if the particular property is disposed of to a person who deals at arm’s length with the taxpayer, the proceeds of disposition of the property, and (b) in any other case, the fair market value of the property; and D is the capital cost of the particular property on which the clean electricity investment tax credit was deducted. Recovery — qualified natural gas energy systems (18) In the taxation year of a taxpayer in which the compliance period of the taxpayer’s specified natural gas energy system ends, if the average actual emission intensity of the electrical energy produced is greater than 68.5 tonnes of carbon dioxide per gigawatt hour of electrical energy, the taxpayer is liable to pay an amount for the year, on or before its balance-due day for the year, determined by the formula A − B where A is the total amount of clean electricity investment tax credits received in respect of qualified natural gas energy equipment that was part of the system; and B is the total of all amounts each of which can reasonably be considered to be the portion of any amount previously paid by the taxpayer in respect of the equipment described in A because of subsection (17). Compliance — emission intensity (19) If a clean electricity investment tax credit was deducted by a taxpayer in respect of a qualified natural gas energy system, the taxpayer shall file with the Minister and the Minister of Natural Resources, within 180 days after the end of each of the first 20 operating years, a compliance report in prescribed form and manner including the following information: (a) the actual emission intensity of the electrical energy produced by the system during the year; (b) the quantity, in gigawatt hours, of electrical energy produced by the system during the year; (c) any shutdown time of the system in respect of the year; (d) for the compliance report in respect of the fifth operating year, a report that verifies the actual emission intensity of the electrical energy that is produced during each operating year of the compliance period, prepared by a qualified verification firm in respect of the system; and (e) any information required in guidelines published by the Minister of Natural Resources. Minister’s determination (20) For the purpose of subsection (18), the Minister of Natural Resources shall review each of the compliance reports of a qualifying entity described in subsection (19) and the Minister may, in consultation with the Minister of Natural Resources, make a determination or redetermination of the actual emission intensity of the electrical energy produced by an entity’s qualified natural gas energy system for any operating year during the compliance period of the system. Failure to report (21) Each taxpayer that fails to file a compliance report as required by subsection (19) is liable to a penalty, for each such failure, in an amount, not exceeding the total of all clean electricity investment tax credits deducted by the taxpayer in respect of the system, equal to the amount determined by the formula [(4% × A) ÷ 365] × B where A is the total of all amounts, each of which is the amount of a clean electricity investment tax credit in respect of the system deducted by the taxpayer for a taxation year that ended before the applicable date in subsection (19); and B is the number of days during which the failure continues. Certain related party transfers (22) Subsections (16) and (17) do not apply to a qualifying entity (in this subsection referred to as the “transferor”) that disposes of a property to another qualifying entity (in this subsection referred to as the “purchaser”) that is related to the transferor if the purchaser acquired the property in circumstances where the property would be clean electricity property to the purchaser but for paragraph (c) of that definition. Certain related party transfers — recapture deferred (23) If subsection (22) applies, subsection 127(34) applies with such modifications as the circumstances require, including that the reference to subsection 127(33) be read as a reference to subsection 127.‍491(22). Recapture event reporting requirement (24) If subsection (16) or (22) applies to a qualifying entity for a particular year, the entity shall notify the Minister in prescribed form and manner on or before the entity’s filing-due date for the year. Information return — partnerships (25) If subsections (26) and (27) apply with respect to the property of a partnership for a particular fiscal period, the partnership shall notify the Minister in prescribed form and manner on or before the day when a return is required by section 229 of the Income Tax Regulations to be filed in respect of the period. Recapture and recovery — partnerships (26) Subject to section 127.47, if subsection (12) has at any time applied to add an amount in computing the clean electricity investment tax credit of a current or former member of a partnership, then for the purposes of this Part, subsections (16) to (18) and (23) shall apply to determine amounts in respect of the partnership as if the partnership were a taxable Canadian corporation, its fiscal period were its taxation year and it had deducted all of the clean electricity investment tax credits that were previously added in computing the clean electricity investment tax credit of any member of the partnership under subsection (2) because of the application of subsection (12) in respect of its partnership interest. Member’s share of tax (27) Unless subsection (28) applies, if, in a taxation year, a taxpayer is a member of a partnership, the amount that can reasonably be considered to be the taxpayer’s share of any amount of tax determined because of subsection (26) in respect of the partnership for its fiscal period ending in the taxation year shall be added to the taxpayer’s tax otherwise payable under this Part for the taxation year. Election by member to pay tax (28) A taxable Canadian corporation that is a member of a partnership during a fiscal period of the partnership may elect, in prescribed form and manner, to add to its tax payable under this Part for its taxation year that includes the end of the fiscal period the total amount of tax determined for that fiscal period because of subsection (26) in respect of the partnership. Joint and several, or solidary, liability (29) Each current or former member of a partnership is jointly and severally, or solidarily, liable for any portion of the amount of tax determined because of subsection (26) in respect of the partnership for a fiscal period that is not added to the tax payable (a) of a qualifying entity under subsection (27), other than a qualifying entity that is exempt from tax under this Part and has not agreed under subsection (3) to be subject to the provisions of this Act in respect of the entity’s clean electricity investment tax credit; or (b) of a taxable Canadian corporation because of subsection (28) and paid by the corporation by its filing-due date for its taxation year that includes the end of the fiscal period. Former member liability (30) If a taxpayer was, at the time that an amount is determined because of subsection (26) in respect of the partnership for a taxation year, no longer a member of the partnership, the taxpayer’s liability for tax because of subsection (29) is limited to the total of all amounts each of which is an amount determined for the taxpayer under subsection (2) because of its membership in the partnership. Interest on recovery tax (31) For the purpose of applying subsection 161(1) to an amount of tax payable because of subsection (18), the balance-due day of a qualifying entity is deemed to be the balance-due day of the taxation year for the related clean electricity investment tax credit under subsection (2). Environmental compliance (32) A property that would otherwise be a clean electricity property of a qualifying entity is deemed not to be a clean electricity property of the entity if, at the time the property becomes available for use by the entity, there is substantial non-compliance by the entity with the requirements of any environmental law, by-law or regulation of Canada, a province, a municipality or a municipal or public body performing a function of government in Canada that is applicable in respect of the property. Compliance — reasonable efforts (33) The following rules apply in respect of a qualifying entity’s property described in subparagraph (e)(vi), (viii) or (ix) of the definition clean electricity property in subsection (1): (a) where the property is temporarily operated in a manner that is an ineligible use solely because of a deficiency, failing or shutdown of the system of which it is a part, and that deficiency, failing or shutdown is beyond the control of the entity, the property is deemed, for the purposes of subsections (16) and (17), not to be operated in a manner that is an ineligible use during the period of the deficiency, failing or shutdown, if the entity makes all reasonable efforts to rectify the circumstances within a reasonable time; and (b) for the purpose of paragraph (a), the system referred to in that paragraph may include property of another person or partnership if (i) the property would reasonably be considered to be part of the system if the property were owned by the entity, (ii) the property (A) utilizes electrical energy or heat energy obtained from the system, (B) transports or stores carbon dioxide obtained from the system, or (C) generates or stores electricity that is transmitted by the system, (iii) the operation of the property is necessary for the system to avoid operation in a manner that is an ineligible use, and (iv) at the time the system first became operational, the deficiency, failing or shutdown in the operation of the property could not reasonably have been anticipated to occur within five calendar years after that time. Project (34) If a major project is undertaken in discrete phases for bona fide business or engineering reasons, the Minister may determine that each phase is a separate project for the purposes of applying paragraph (a) of the definition clean electricity property in subsection (1). Authority of the Minister of Natural Resources (35) For the purpose of determining whether a property is a clean electricity property, any technical guide published by the Department of Natural Resources, and as amended from time to time, is to apply conclusively with respect to engineering and scientific matters. Clean electricity investment tax credit — purpose (36) The purpose of this section is to encourage the investment of capital in the deployment of clean electricity property in Canada.

58(1) Paragraph 127.52(1)(d.1) of the Act is replaced by the following: (d.1) in respect of a disposition to which paragraph 38(a.1) applies ( other than a disposition of a property that is included in a flow-through share class of property , as defined in section 54 ), the portion of that paragraph before subparagraph (i) were read as “a taxpayer’s taxable capital gain for a taxation year from the disposition of a property is equal to 3/10 of the taxpayer’s capital gain for the year from the disposition of the property if”; (d.2) in respect of a disposition of a property that is included in a flow-through share class of property (as defined in section 54) to which paragraph 38(a.1) applies, the portion of that paragraph before subparagraph (i) were read as “a taxpayer’s taxable capital gain for a taxation year from the disposition of a flow-through share class of property is equal to 3/10 of the amount, if any, by which the taxpayer’s capital gain for the year from the disposition of the flow-through share class of property, exceeds the amount deemed to be a capital gain of the taxpayer from the disposition of another capital property because of the application of subsection 40(12) in respect of the disposition of the flow-through share class of property”; (2) Subparagraph 127.52(1)(h)(vi) of the Act is replaced by the following: (vi) twice the amount deducted under subsection 110.61(2) or 110.62(2) ; (3) Subparagraph 127.52(1)(j)(ii) of the Act is replaced by the following: (ii) paragraphs 20(1)‍(c) to (f) and (bb) in respect of an amount borrowed or paid to earn income from property for the year, other than an amount described under any of paragraphs (b), (c), (c.‍2), (c.‍3) and (e.1), (4) Subsections (1) to (3) apply to taxation years that begin after 2023.

59(1) Paragraph 127.55(f) of the Act is amended by striking out “or” at the end of subparagraph (vi) and by adding the following after subparagraph (vii): (viii) a trust if (A) it is established (I) under a law of Canada or a province and is for the benefit of an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982 , or (II) under a treaty, or a settlement agreement, between His Majesty in right of Canada, or His Majesty in right of a province, and an Indigenous group, community or people described in subclause (I), and (B) all or substantially all of the contributions to the trust before the end of the taxation year are amounts paid under the law, treaty or settlement agreement described in subclause (A)(I) or (II) or are reasonably traceable to those amounts, or (ix) a trust, all of the beneficiaries of which are any combination of (A) all of the members of an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982 , (B) a public body performing a function of government in Canada within the meaning of paragraph 149(1)(c) in relation to an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982 , (C) a person described under paragraph 149(1)(f) or (l) that is organized and operated primarily for health, education, social welfare or community improvement for the benefit of the members of an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982 , (D) a corporation all of the shares (except directors’ qualifying shares) or of the capital of which are owned by a person described in clause (B) or clause (C), a trust described in subparagraph (viii), another corporation that is described in this clause or a combination of those persons, and (E) a trust described in subparagraph (viii). (2) Subsection (1) applies to taxation years that begin after December 31, 2023.

60(1) Clause 128(2)(e)(ii)(A) of the Act is replaced by the following: (A) an amount under any of paragraphs 110(1)(d) to (d.3) and sections 110.6, 110.61 and 110.62 to the extent that the amount is in respect of an amount included in income under subparagraph (i) for that taxation year, and (2) Subparagraph 128(2)(f)(iii) of the Act is replaced by the following: (iii) in computing the individual’s taxable income for the year, no amount were deductible under any of paragraphs 110(1)(d) to (d.3) and sections 110.6, 110.61 and 110.62 in respect of an amount included in income under subparagraph (e)(i), and no amount were deductible under section 111, and (3) Subsections (1) and (2) are deemed to have come into force on January 1, 2024.

61(1) The definitions perte and revenu in subsection 129(4) of the French version of the Act are repealed. (2) Paragraph (b) of the definition income or loss in subsection 129(4) of the English version of the Act is replaced by the following: (b) does not include (i) the income or loss from any property that is incident to or pertains to an active business carried on by it, (ii) the income or loss from any property that is used or held principally for the purpose of gaining or producing income from an active business carried on by it, or (iii) for each election made for the year under subsection 93.4(2) by the corporation or by a partnership of which the corporation is a member (or of which the corporation is deemed to be a member under subsection 93.1(3)), (A) the portion of the FABI amount (within the meaning of subsection 93.4(2)(a)) in respect of the election that is included in computing the corporation’s income under subsection 91(1) for the year or, if the election was made by a partnership of which the corporation is a member, the portion of the FABI amount included in the partnership’s income under subsection 91(1) that is included in the corporation’s income for the year in accordance with subsection 96(1), or (B) the portion of the amount deducted under subsection 91(4) that is determined under subparagraph 93.4(2)(b)(i) to be in respect of the FABI amount to which the election relates. ( revenu ou perte ) (3) Subsection 129(4) of the French version of the Act is amended by adding the following in alphabetical order: revenu ou perte Revenu ou perte d’une société pour une année d’imposition provenant d’une source qui est un bien qui, à la fois : a) comprend le revenu ou la perte provenant d’une entreprise de placement déterminée qu’elle exploite au Canada, sauf celui ou celle provenant d’une source à l’étranger; b) ne comprend pas, selon le cas : (i) le revenu ou la perte provenant d’un bien qui se rapporte directement ou accessoirement à une entreprise qu’elle exploite activement, (ii) le revenu ou la perte provenant d’un bien qui est utilisé ou détenu principalement pour tirer un revenu d’une entreprise qu’elle exploite activement, (iii) pour chaque choix exercé pour l’année en application du paragraphe 93.4(2) par la société ou par une société de personnes dont la société est un associé (ou dont la société est réputée être un associé en vertu du paragraphe 93.1(3)), selon le cas : (A) la fraction du montant REATE (au sens de l’alinéa 93.4(2)a)) relativement au choix qui est incluse dans le calcul du revenu de la société en application du paragraphe 91(1) pour l’année ou, si le choix a été exercé par un société de personnes dont la société est un associé, la fraction du montant REATE incluse au revenu de la société de personnes en vertu du paragraphe 91(1) qui est incluse dans le revenu de la société pour l’année conformément au paragraphe 96(1), (B) la fraction du montant déduit en vertu du paragraphe 91(4) qui est déterminée en application du sous-alinéa 93.4(2)b)(i) relativement au montant REATE auquel le choix se rapporte. ( income or loss ) (4) Subsections (1) to (3) apply to taxation years that begin on or after April 7, 2022.

62(1) The portion of subsection 131(8) of the Act before paragraph (a) is replaced by the following: (8) Subject to subsections (8.1) to (8.3) , a corporation is, for the purposes of this section, a mutual fund corporation at any time in a taxation year if, at that time, it was a prescribed labour-sponsored venture capital corporation or (2) Section 131 of the Act is amended by adding the following after subsection (8.1): Substantial interest (8.2) A corporation (other than a prescribed labour-sponsored venture capital corporation) is deemed not to be a mutual fund corporation after a particular time if, at that time, (a) a person or partnership, or any combination of persons or partnerships that do not deal with each other at arm’s length (in either case, referred to in this subsection and subsection (8.3) as “specified persons”) own, in the aggregate, shares of the capital stock of the corporation having a fair market value of more than 10% of the fair market value of all of the issued and outstanding shares of the capital stock of the corporation; and (b) the corporation is controlled by or for the benefit of one or more specified persons. Exception (8.3) Subsection (8.2) does not apply to a corporation if, at the particular time referred to in that subsection, (a) the corporation was incorporated not more than two years before the particular time; and (b) the aggregate fair market value of the shares of the capital stock of the corporation owned by specified persons does not exceed $5,000,000. (3) Subsections (1) and (2) apply to taxation years that begin after 2024, except that if a corporation was controlled by or for the benefit of a real estate investment trust (as defined in subsection 122.1(1) of the Act) on April 16, 2024, subsections (1) and (2) apply to taxation years of the corporation that begin after 2025.

63Paragraph (a) of the definition tax deferred cooperative share in subsection 135.1(1) of the Act is replaced by the following: (a) issued, after 2005 and before 2031 , by an agricultural cooperative corporation to a person or partnership that is at the time the share is issued an eligible member of the agricultural cooperative corporation, pursuant to an allocation in proportion to patronage;

64(1) Subsection 136(1) of the Act is replaced by the following: 136 (1) Notwithstanding any other provision of this Act, a cooperative corporation that would, but for this section, be a private corporation is deemed not to be a private corporation except for the purposes of paragraphs 87(2)(vv) and (ww) (including, for greater certainty, in applying those paragraphs as provided under paragraph 88(1)(e.2)), the definitions excessive eligible dividend designation , general rate income pool and low rate income pool in subsection 89(1), subsections 89(4) to (6) and (8) to (10), sections 123.4, 125, 125.1, 127 and 127.1, the definition mark-to-market property in subsection 142.2(1), sections 152 and 157, subsection 185.2(3), the definitions qualifying cooperative business and small business corporation in subsection 248(1) (as it applies for the purposes of paragraph 39(1)(c)) and subsection 249(3.1).

65(1) Subsection 142.7(4) of the Act is replaced by the following: (4) If a Canadian affiliate of an entrant bank and the entrant bank make an election under subsection (3) in respect of a transfer of property by the Canadian affiliate to the entrant bank, for the purposes of subsections 15(1), 52(2), 69(1), (4) and (5), 246(1) and 247 (2.02) in respect of the transfer, the fair market value of the property is deemed to be the amount agreed by the Canadian affiliate and the entrant bank in their election. (2) Subsection (1) applies to taxation years and fiscal periods that begin after November 4, 2025.

66(1) The definition issuer in subsection 146(1) of the Act is replaced by the following: issuer means the person referred to in the definition retirement savings plan (a) with whom an annuitant has a contract or arrangement described in paragraph (a) or (b) of that definition, or (b) that established an arrangement described in paragraph (c) of that definition; ( émetteur ) (2) The definition benefit in subsection 146(1) of the Act is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (c.1) and by adding the following after paragraph (c.1): (c.2) an amount that is paid or transferred to an unclaimed property authority in respect of an unlocated individual (3) The portion of the definition refund of premiums in subsection 146(1) of the Act before paragraph (a) is replaced by the following: refund of premiums means any amount paid out of or under an RRSP (other than a tax-paid amount in respect of the plan or an amount paid from an arrangement described in paragraph (c) of the definition retirement savings plan in this subsection ) as a consequence of the death of the annuitant under the plan, (4) The definition retirement savings plan in subsection 146(1) of the Act is amended by striking out “or” at the end of paragraph (a), by adding “or” at the end of paragraph (b) and by adding the following after paragraph (b): (c) an arrangement established at the direction of an unclaimed property authority to receive property from an RRSP or registered pension plan in respect of an unlocated individual; ( régime d’épargne-retraite ) (5) Subsection 146(3) of the Act is amended by adding the following after paragraph (b): (c) does not meet the conditions in subsection (2), if the plan is an arrangement described in paragraph (c) of the definition retirement savings plan in subsection (1); (6) Subsection 146(16) of the French version of the Act is amended by adding the following after paragraph (a.1): a.2) soit à un CELIAPP au profit du rentier, si le paragraphe (8.3) ne s’appliquait pas à un montant relativement à un bien lorsque le rentier a plutôt reçu le bien à titre de prestations dans le cadre d’un régime enregistré d’épargne-retraite; (7) Section 146 of the Act is amended by adding the following after subsection (22): (23) If an unclaimed property authority has established an RRSP to receive property in respect of an unlocated individual, (a) subsections (8.8) to (8.93) do not apply to the unlocated individual in respect of the property (or property substituted for it) while such property is held under the RRSP; (b) paragraph (4)(c) does not apply to any trust governed by the RRSP; and (c) subsection (20) is to be read without reference to its paragraph (c) in respect of an amount credited or added to a deposit while the property (or property substituted for it) is held under the RRSP. Unclaimed property authority — transfers (24) If an unclaimed property authority has established an RRSP to receive property in respect of an unlocated individual and the property (or property substituted for it) is claimed by an individual that is eligible to receive it in accordance with applicable law, the individual who made the claim is deemed to be the annuitant under the RRSP for the purposes of subsection (16), provided that individual is or was (a) if the property was received by the authority from a registered pension plan, the member (as defined in subsection 147.1(1)) of the registered pension plan; (b) if the property was received by the authority from an RRSP, the annuitant (as defined in subsection 146(1)) of the RRSP; (c) a spouse or common-law partner of an individual described in paragraph (a) or (b), immediately before the death of that individual; or (d) a child or grandchild of an individual described in paragraph (a) or (b) who was, immediately before the death of that individual, financially dependent on that individual for support because of mental or physical infirmity. (8) Subsections (1) and (3) to (5) come into force on January 1, 2027. (9) Subsection (2) applies in respect of amounts paid or transferred to an unclaimed property authority after December 31, 2026. (10) Subsection (6) is deemed to have come into force on June 20, 2024. (11) Subsection (7) applies in respect of RRSPs established by an unclaimed property authority after December 31, 2026.

67(1) Paragraphs 146.2(9)(b) and (c) of the Act are replaced by the following: (b) there shall be included in computing a taxpayer’s income for a taxation year the total of all amounts each of which is an amount determined by the formula A − B − C where A is the amount of a payment made out of or under the trust, in satisfaction of all or part of the taxpayer’s beneficial interest in the trust, in the taxation year, after the holder’s death and at or before the exemption-end time, B is the amount designated in respect of the payment as an exempt contribution (as defined in subsection 207.01(1)), and C is an amount designated by the trust not exceeding the lesser of (i) the amount by which the amount of the payment exceeds the amount determined for B in respect of the payment , and (ii) the amount by which the fair market value of all of the property held by the trust immediately before the holder’s death exceeds the total of all amounts each of which is the amount determined for C in respect of any other payment made out of or under the trust prior to the payment ; and (c) there shall be included in computing the trust’s income for its first taxation year, if any, that begins after the exemption-end time the amount determined by the formula D − E − F where D is the sum of the fair market value of all of the property held by the trust at the exemption-end time the total of all payments made out of or under the trust after the holder’s death and at or before the exemption-end time , E is the sum of (i) the total of all amounts each of which is an amount determined for B in paragraph (b), and (ii) the total of all amounts included in a taxpayer’s income under paragraph (b) in respect of the trust, and F is the fair market value of all of the property held by the trust immediately before the holder’s death. (2) Subsection (1) comes into force or is deemed to have come into force on January 1, 2026.

68(1) The definition retirement income fund in subsection 146.3(1) of the Act is replaced by the following: retirement income fund means an arrangement (a) between a carrier and an annuitant under which, in consideration for the transfer to the carrier of property, the carrier undertakes to pay amounts to the annuitant (and, if the annuitant so elects, to the annuitant’s spouse or common-law partner after the annuitant’s death), the total of which is, in each year in which the minimum amount under the arrangement for the year is greater than nil, not less than the minimum amount under the arrangement for that year, but the amount of any such payment does not exceed the value of the property held in connection with the arrangement immediately before the time of the payment, or (b) established at the direction of an unclaimed property authority to receive property from a RRIF, RRSP or registered pension plan in respect of an unlocated individual. ( fonds de revenu de retraite ) (2) The portion of the definition designated benefit in subsection 146.3(1) of the Act before paragraph (a) is replaced by the following: designated benefit of an individual in respect of a RRIF (other than an arrangement described in paragraph (b) of the definition retirement income fund in this subsection ) means the total of (3) The portion of the definition carrier in subsection 146.3(1) of the English version of the Act after paragraph (d) is repealed. (4) The portion of the definition émetteur in subsection 146.3(1) of the French version of the Act before paragraph (a) is replaced by the following: émetteur À l’égard d’un fonds de revenu de retraite, l’une des personnes suivantes : (5) Section 146.3 of the Act is amended by adding the following after subsection (1.5): (1.6) Despite the definition minimum amount in subsection (1), and subject to subsection (1.7), the minimum amount under a retirement income fund for a year is nil, if at the beginning of the year the fund is held under the direction of an unclaimed property authority in respect of an unlocated individual. Accumulated minimum amount (1.7) If an unclaimed property authority directs a carrier of a retirement income fund to transfer all or part of the property held in connection with the fund to a RRIF of an individual who is entitled to claim the property in accordance with applicable law, (a) despite the definition minimum amount in subsection (1), the minimum amount under the fund for the year that includes the transfer is equal to the total of all amounts each of which is the minimum amount that, in the absence of this subsection and subsection (1.6), would have been the minimum amount under the fund in the year of the transfer or a preceding year to which subsection (1.6) applied; and (b) an amount that is not less than the minimum amount determined under paragraph (a) must be paid directly to the individual from the fund before the first such transfer. (6) Section 146.3 of the Act is amended by adding the following after subsection (2): Idem (2.1) Despite subsection (2), the Minister may accept for registration for the purposes of this Act any arrangement that does not meet the conditions in subsection (2) if the arrangement is described in paragraph (b) of the definition retirement income fund in subsection (1). (7) Subsection 146.3(5) of the Act is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d): (e) an amount that is paid or transferred to an unclaimed property authority in respect of an unlocated individual. (8) Section 146.3 of the Act is amended by adding the following after subsection (15): Unclaimed property authority (16) If an unclaimed property authority has established a RRIF to receive property in respect of an unlocated individual, (a) subsections (6) to (6.4) do not apply to the unlocated individual in respect of the property (or property substituted for it) while such property is held under the RRIF; (b) subsection (3.1) does not apply to any trust governed by the RRIF; and (c) subsection (15) is to be read without reference to its paragraph (c) in respect of an amount credited or added to a deposit while the property (or property substituted for it) is held under the RRIF. Unclaimed property authority — transfers (17) If an unclaimed property authority has established a RRIF to receive property in respect of an unlocated individual and the property (or property substituted for it) is claimed by an individual that is eligible to receive it in accordance with applicable law, the individual who made the claim is deemed to be the annuitant under the RRIF for the purposes of paragraphs (2)(d) and (e) and subsection (14.1), provided that individual is or was (a) if the property was received by the authority from a registered pension plan, the member (as defined in subsection 147.1(1)) of the registered pension plan; (b) if the property was received by the authority from an RRSP, the annuitant (as defined in subsection 146(1)) of the RRSP; (c) if the property was received by the authority from a RRIF, the annuitant (as defined in subsection 146.3(1)) of the RRIF; (d) a spouse or common-law partner of an individual described in paragraph (a), (b) or (c), immediately before the death of that individual; or (e) a child or grandchild of an individual described in paragraph (a), (b) or (c) who was, immediately before the death of that individual, financially dependent on that individual for support because of mental or physical infirmity. (9) Subsections (1) to (6) come into force on January 1, 2027. (10) Subsection (7) applies in respect of amounts paid or transferred to an unclaimed property authority after December 31, 2026. (11) Subsection (8) applies in respect of RRIFs established by an unclaimed property authority that receive property in respect of an amount paid or transferred to an unclaimed property authority after December 31, 2026.

69(1) The definition first home savings account or FHSA in subsection 146.6(1) of the Act is replaced by the following: first home savings account or FHSA means a qualifying arrangement registered with the Minister that has not ceased to be a FHSA under subsection 146.6(16). ( compte d’épargne libre d’impôt pour l’achat d’une première propriété ou CELIAPP ) (2) The description of C in paragraph (a) of the definition annual FHSA limit in subsection 146.6(1) of the Act is replaced by the following: C is the amount by which the total of all designated amounts described in paragraph (b) of the definition designated amount in subsection 207.01(1) for the year exceeds the total of all contributions made to a FHSA by the taxpayer after the taxpayer’s first qualifying withdrawal from a FHSA , (3) The portion of subsection 146.6(15) of the Act before paragraph (c) is replaced by the following: (15) If an amount is received at any time from the FHSA of a deceased holder by the holder’s legal representative and a survivor of the holder is entitled to all or a portion of the amount ( in this subsection referred to as the “survivor’s amount”) under a decree, order or judgment of a competent tribunal or under a written agreement (provided that the entitlement relates to the survivor’s rights or interests in respect of property as a result of marriage or common-law partnership), or as a person beneficially interested under the deceased’s estate, the following rules apply: (a) if a payment is made from the estate to a FHSA, RRSP or RRIF of the survivor, the payment is deemed to be a transfer from the FHSA to the extent that it does not exceed the survivor’s amount and it is so designated jointly by the legal representative and the survivor in prescribed form filed with the Minister; (b) if a payment is made from the estate to the survivor, the payment is deemed for the purposes of subsection (14) to have been received by the survivor as a beneficiary to the extent that it does not exceed the survivor’s amount and it is so designated jointly by the legal representative and the survivor in prescribed form filed with the Minister; and (4) Subsections (1) to (3) are deemed to have come into force on April 1, 2023.

70(1) Section 147.4 of the Act is amended by adding the following after subsection (3): (4) Subsection (5) applies to an amount transferred from an annuity contract described in subsection (1) if (a) the conditions set out in paragraphs (1)(a) to (e) were satisfied when the annuitant acquired an interest in the annuity contract; and (b) the transfer is made as a consequence of (i) an individual who is a spouse or common-law partner or former spouse or common-law partner of the annuitant becoming entitled to an interest in the annuity contract under a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the annuitant and the individual, in settlement of rights arising out of, or on a breakdown of, their marriage or common-law partnership, or (ii) a provision of the Pension Benefits Standards Act, 1985 or a similar law of a province that permits the annuitant to commute all or part of their interest in the annuity contract. Treatment of amount transferred (5) Despite paragraph (1)(g), if this subsection applies to an amount transferred from an annuity contract described in subsection (1), the amount transferred is deemed for the purposes of section 147.3 (a) not to be transferred from the annuity contract; and (b) to be transferred from the registered pension plan described in subsection (1) to fully or partially satisfy the individual’s entitlement to benefits under the benefit provision (as defined in subsection 8500(1) of the Income Tax Regulations ) under which the individual’s entitlement to benefits was satisfied by the acquisition of the interest in the annuity contract. (2) Subsection (1) is deemed to have come into force on January 1, 2018.

71(1) Paragraphs 150(1.2)(a) to (c) of the Act are replaced by the following: (a) had been in existence for less than three months; (b) holds assets with a total fair market value that does not exceed $50,000 throughout the year; (b.1) meets the following conditions: (i) each trustee is an individual, (ii) each beneficiary is an individual and is related to each trustee, and (iii) the total fair market value of the property of the trust does not exceed $250,000 throughout the year and the only assets held by the trust throughout the year are one or more of (A) money, (B) a guaranteed investment certificate issued by a Canadian bank or trust company incorporated under the laws of Canada or of a province, (C) a debt obligation described in paragraph (a) of the definition fully exempt interest in subsection 212(3), (D) debt obligations issued by (I) a corporation, mutual fund trust or limited partnership the shares or units of which are listed on a designated stock exchange in Canada, (II) a corporation the shares of which are listed on a designated stock exchange outside Canada, or (III) an authorized foreign bank that are payable at a branch in Canada of the bank, (E) a share, debt obligation or right listed on a designated stock exchange, (F) a share of the capital stock of a mutual fund corporation, (G) a unit of a mutual fund trust, (H) an interest in a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), (I) an interest as a beneficiary under a trust, all the units of which are listed on a designated stock exchange, (J) personal-use property of the trust, or (K) a right to receive income or gains on property described in clauses (A) to (J); (c) is required under the relevant rules of professional conduct or the laws of Canada or a province to hold funds for the purposes of an activity that is regulated under those rules or laws, provided (i) the trust is not maintained as a separate trust for a particular client or clients, or (ii) the only assets held by the trust throughout the year are money with a value that does not exceed $250,000; (2) Subparagraph 150(1.2)(b.1)(ii) of the Act, as enacted by subsection (1), is replaced by the following: (ii) each beneficiary is (A) an individual ( other than a trust ) and is related to each trustee, or (B) a graduated rate estate (or would be a graduated rate estate in the year if the estate had properly designated itself as a graduated rate estate) of an individual who was a beneficiary described in clause (A) in the year of the individual’s death, (3) Clauses 150(1.2)(b.1)(iii)(A) and (B) of the Act, as enacted by subsection (1), are replaced by the following: (A) money, including deposits in a Canadian financial institution as defined in subsection 270(1) , (B) a guaranteed investment certificate issued by a Canadian bank, trust company or credit union incorporated under the laws of Canada or of a province, (4) Subparagraph 150(1.2)(b.1)(iii) of the Act, as enacted by subsection (1), is amended by striking out “or” at the end of clause (J), by adding “or” at the end of clause (K) and by adding the following after clause (K): (L) an exempt policy (as defined in subsection 12.2(11)) issued by a Canadian life insurer, the fair market value of which is to be determined by its cash surrender value; (5) Subparagraph 150(1.2)(c)(ii) of the Act, as enacted by subsection (1), is replaced by the following: (ii) the only assets held by the trust throughout the year are assets described in clause (b.1)(iii)(A) or (B) with a total fair market value that does not exceed $250,000; (6) Paragraph 150(1.2)(j) of the Act is replaced by the following: (j) is, for greater certainty, a graduated rate estate, or would be a graduated rate estate in the year if the estate had properly designated itself as a graduated rate estate ; (7) Paragraph 150(1.2)(n) of the Act is amended by striking out “or” at the end of subparagraph (x), by adding “or” at the end of subparagraph (xi) and by adding the following after subparagraph (xi): (xii) a retirement compensation arrangement the primary purpose of which is to provide annual or more frequent periodic retirement benefits to supplement the benefits provided out of or under one or more registered pension plans, registered retirement savings plans, deferred profit sharing plans or pooled registered pension plans; (8) Subsection 150(1.2) of the Act is amended by striking out “or” at the end of paragraph (o), by adding “or” at the end of paragraph (p) and by adding the following after paragraph (p): (q) is established for the purpose of complying with a statute of Canada or a province and the person or persons acting as trustee of the trust hold the property in trust for a specified purpose. (9) Subsection 150(1.2) of the Act, as amended by subsection (8), is amended by striking out “or” at the end of paragraph (p), by adding “or” at the end of paragraph (q) and by adding the following after paragraph (q): (r) is an employee ownership trust. (10) Subsection 150(1.3) of the Act is repealed. (11) Section 150 of the Act is amended by adding the following after subsection (1.2): (1.3) For the purpose of this section and section 204.2 of the Income Tax Regulations , (a) a trust includes an express trust that would not otherwise be considered a trust under the Act if, under the trust, (i) one or more persons (in this subsection and subsection (1.31) referred to as a “legal owner”) have legal ownership of property that is held for the use of, or benefit of, one or more persons or partnerships, and (ii) the legal owner can reasonably be considered to act as agent for the persons or partnerships who have the use of, or benefit of, the property; (b) each person that is a legal owner of a trust that is described under paragraph (a) is considered to be a trustee of the trust; and (c) each person or partnership that has the use or benefit of property under a trust that is described under paragraph (a) is considered to be a beneficiary of the trust. Deemed trust — exceptions (1.31) Subsection (1.3) does not apply to a trust for a taxation year if (a) each person or partnership that is considered to be a beneficiary under paragraph (1.3)(c) at any time in the year is also a legal owner of the property referred to in that paragraph at that time and there are no legal owners that are not considered to be beneficiaries; (b) the legal owners are individuals that are related persons and the property is real property or immovable that would be the principal residence of one or more of the legal owners for the year if those legal owners had designated the property for the year under the definition principal residence in section 54; (c) the legal owner is an individual and the property is real property or immovable that (i) is held for the use of, or benefit of, the legal owner’s spouse or common-law partner during the year, and (ii) would be the legal owner’s principal residence for the year if the legal owner had designated the property for the year under the definition principal residence in section 54; (d) under the trust (i) the property is held throughout the year solely for the use of, or benefit of, a partnership, (ii) each legal owner is a partner of the partnership, and (iii) a member of the partnership is, or but for subsection 220(2.1) would be, required under section 229 of the Income Tax Regulations to make an information return for a fiscal period of the partnership that includes December 31 of the taxation year; (e) the legal owner holds the property as required by an order of a court; (f) all or substantially all of the property under the trust is Canadian resource property (as defined in subsection 66(15)) that is held solely for the use of, or benefit of, one or more persons or partnerships each of which is (i) a corporation, the shares of which are listed on a designated stock exchange, (ii) a corporation that is controlled by one or more corporations described in subparagraph (i), (iii) a partnership if (A) a majority-interest partner of the partnership is a corporation described in subparagraph (i) or (ii), or (B) a majority-interest group of partners (as defined in subsection 251.1(3)) of the partnership consists of two or more corporations described in subparagraph (i) or (ii), or (iv) a partnership if (A) a majority-interest partner of the partnership is a person or partnership described in subparagraphs (i) to (iii), or (B) a majority-interest group of partners (as defined in subsection 251.1(3)) of the partnership consists of two or more persons or partnerships described in subparagraphs (i) to (iii); (g) under the trust (i) property is held exclusively for the use of, or benefit of, one or more persons described under subsection 149(1), (ii) each legal owner is a person described under subsection 149(1), and (iii) the property consists solely of funds received from His Majesty in right of Canada or a province; or (h) the trustee is a registered securities dealer acting in that capacity or a trust company regulated under the laws of Canada or a Province acting as an investment entity (as defined in subsection 270(1)), if (i) at any time, the only property in the trust is described in clauses (1.2)(b.1)(iii)(A) to (I), and (ii) an information return is issued in respect of all of the income and gains of the trust to all of the beneficiaries of the trust. Related persons (1.32) For the purposes of this section, (a) a related person includes an aunt, uncle, niece and nephew; and (b) a person is related to himself or herself. (12) Subsection 150(1.4) of the Act is replaced by the following: Solicitor-client privilege (1.4) For greater certainty, subsections (1.1) and (1.2) do not require the disclosure of information that is subject to solicitor-client privilege. (13) Subsection 150(1.4) of the Act, as enacted by subsection (12), is replaced by the following: Solicitor-client privilege (1.4) For greater certainty, subsections (1.1) to (1.3) do not require the disclosure of information that is subject to solicitor-client privilege. (14) Subsections (1), (6), (8), (10) and (12) apply to taxation years that end after December 30, 2024 and before December 31, 2025. (15) Subsections (2) to (5), (7) and (9) apply to taxation years that end after December 30, 2025. (16) Subsections (11) and (13) apply to taxation years that end after December 30, 2026.

72(1) Paragraph 152(1)(b) of the Act is replaced by the following: (b) the amount of tax, if any, deemed by any of subsections 120(2) or (2.2), 122.5(3) to (3.003), 122.51(2), 122.7(2) or (3), 122.72(1), 122.8(4), 122.9(2), 122.91(1), 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3), 127.42(2) or (3) , 127.44(2), 127.45(2), 127.48(2), 127.49(2) or 210.2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year. (2) Paragraph 152(1)(b) of the Act, as enacted by subsection (1), is replaced by the following: (b) the amount of tax, if any, deemed by any of subsections 120(2) or (2.2), 122.5(3) to (3.003), 122.51(2), 122.7(2) or (3), 122.72(1), 122.8(4), 122.9(2), 122.91(1), 122.92(3) , 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3), 127.42(2) or (3), 127.44(2), 127.45(2), 127.48(2), 127.49(2) or 210.2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year. (3) Paragraph 152(1)(b) of the Act, as enacted by subsection (2), is replaced by the following: (b) the amount of tax, if any, deemed by any of subsections 120(2) or (2.2), 122.5(3) to (3.003), 122.51(2), 122.7(2) or (3), 122.72(1), 122.8(4), 122.9(2), 122.91(1), 122.92(3), 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3), 127.42(2) or (3), 127.44(2), 127.45(2), 127.48(2), 127.49(2), 127.491(2) or 210.2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year. (4) Paragraph 152(1)(b) of the Act, as enacted by subsection (3), is replaced by the following: (b) the amount of tax, if any, deemed by any of subsections 120(2) or (2.2), 122.5(3) to (3.003), 122.51(2), 122.7(2) or (3), 122.72(1), 122.8(4), 122.9(2), 122.91(1), 122.92(3), 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3), 127.42(2) or (3), 127.421(2) or (3) , 127.44(2), 127.45(2), 127.48(2), 127.49(2), 127.491(2) or 210.2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year. (5) Paragraph 152(1)(b) of the Act, as enacted by subsection (4), is replaced by the following: (b) the amount of tax, if any, deemed by any of subsections 120(2) or (2.2), 122.5(3) to (3.003), 122.51(2), 122.7(2) or (3), 122.72(1), 122.8(4), 122.9(2), 122.91(1), 122.92(3), 122.93(2) , 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3), 127.42(2) or (3), 127.421(2) or (3), 127.44(2), 127.45(2), 127.48(2), 127.49(2), 127.491(2) or 210.2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year. (6) Paragraph 152(1.2)(d) of the Act is replaced by the following: (d) the Minister determines the amount deemed by any of subsections 122.5(3) to (3.003), 122.72(1), 122.8(4) or 127.421(2) or (3) to have been paid by a person for a taxation year to be nil, subsection (2) does not apply to the determination unless the person requests a notice of determination from the Minister. (7) Section 152 of the Act is amended by adding the following after subsection (3.4): (3.5) On receipt of a prescribed form referred to in subsection 127.491(2) from an entity that is described in any of paragraphs (b) to (f) of the definition qualifying corporation in subsection 127.491(1), the Minister shall, with all due dispatch, determine the amount of the entity’s clean electricity investment tax credit under paragraph 127.491(2)(b), or determine that there is no such amount, and shall send a notice of the determination to the entity. (8) Subsection 152(3.5) of the Act, as enacted by subsection (7), is replaced by the following: Clean electricity — notice of determination (3.5) On receipt of a prescribed form referred to in subsection 127.491(2) from an entity that is described in any of paragraphs (b) to (h) of the definition qualifying corporation in subsection 127.491(1), the Minister shall, with all due dispatch, determine the amount of the entity’s clean electricity investment tax credit under paragraph 127.491(2)(b), or determine that there is no such amount, and shall send a notice of the determination to the entity. (9) Subsection 152(3.5) of the Act, as enacted by subsection (8), is replaced by the following: Clean electricity — notice of determination (3.5) On receipt of a prescribed form referred to in subsection 127.491(2) from an entity that is described in any of paragraphs (b) to (i) of the definition qualifying corporation in subsection 127.491(1), the Minister shall, with all due dispatch, determine the amount of the entity’s clean electricity investment tax credit under paragraph 127.491(2)(b), or determine that there is no such amount, and shall send a notice of the determination to the entity. (10) Subsection 152(4) of the Act is amended by adding the following after paragraph (b.94): (b.941) the assessment, reassessment or additional assessment is made before the day that is 36 months after the end of the normal reassessment period for the taxpayer in respect of the year and is made in respect of a disposition, in the year, of shares of the capital stock of a corporation in respect of which the taxpayer claimed a deduction under subsection 110.62(2); (11) Subsection 152(4) of the Act, as amended by subsection (10), is amended by adding the following after paragraph (b.941): (b.95) a prescribed form that is required to be filed by the taxpayer, or a partnership of which the taxpayer is a member, under subsection 127.491(24) or (25) is not filed as and when required, and the assessment, re-assessment or additional assessment is made in relation to transactions or events described in any of subsections 127.491(16), (17), (22), (23) or (26) to (30) before the day that is (i) in the case of a taxpayer described in paragraph (3.1)(a), four years after the day on which the form is filed, and (ii) in any other case, three years after the day on which the form is filed; (12) Paragraph 152(4.01)(b) of the Act is amended by striking out “or” at the end of subparagraph (xiii), by adding “or” at the end of subparagraph (xiv) and by adding the following after subparagraph (xiv): (xv) the transactions or events referred to in paragraph (4)(b.95); (13) Paragraph 152(4.2)(b) of the Act is replaced by the following: (b) redetermine the amount, if any, deemed by any of subsections 120(2) or (2.2), 122.5(3) to (3.003), 122.51(2), 122.7(2) or (3), 122.8(4), 122.9(2), 122.91(1), 122.92(3) , 127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year or deemed by subsection 122.61(1) to be an overpayment on account of the taxpayer’s liability under this Part for the year. (14) Paragraph 152(4.2)(b) of the Act, as enacted by subsection (13), is replaced by the following: (b) redetermine the amount, if any, deemed by any of subsections 120(2) or (2.2), 122.5(3) to (3.003), 122.51(2), 122.7(2) or (3), 122.8(4), 122.9(2), 122.91(1), 122.92(3), 122.93(2) , 127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year or deemed by subsection 122.61(1) to be an overpayment on account of the taxpayer’s liability under this Part for the year. (15) Subsection (1) applies to the 2021 and subsequent taxation years. (16) Subsections (2) and (13) are deemed to have come into force on January 1, 2023. (17) Subsections (3), (7), (11) and (12) are deemed to have come into force on April 16, 2024. (18) Subsections (4) and (6) are deemed to have come into force on June 20, 2024. (19) Subsections (5) and (14) apply to the 2026 and subsequent taxation years. (20) Subsection (8) is deemed to have come into force on December 16, 2024. (21) Subsection (9) is deemed to have come into force on November 4, 2025. (22) Subsection (10) is deemed to have come into force on January 1, 2024.

73(1) Paragraph 153(1)(b) of the Act is replaced by the following: (b) a superannuation or pension benefit, other than an amount described in clause 56(1)(a)(i)(H) , (2) Paragraph 153(1)(j) of the Act is replaced by the following: (j) a payment out of or under an RRSP or a plan referred to in subsection 146(12) as an “amended plan”, other than an amount described in paragraph (c.2) of the definition benefit in subsection 146(1) , (3) Paragraph 153(1)(l) of the Act is replaced by the following: (l) a payment out of or under a RRIF or a fund referred to in subsection 146.3(11) as an “amended fund”, other than an amount described in paragraph 146.3(5)(e) , (4) Section 153 of the Act is amended by adding the following after subsection (7): (8) The Minister may (a) waive the requirement under subsection (1) to deduct or withhold amounts from payments described in paragraph (1)(g) to a non-resident person during a period of time specified by the Minister if it is established in a manner acceptable to the Minister that (i) the payments (A) are income of the non-resident person from a business that is (I) a treaty-protected business, or (II) not carried on in Canada, or (B) would not be included in computing the income of the non-resident person because of paragraph 81(1)(c), and (ii) the conditions established by the Minister are met; and (b) revoke a waiver made under paragraph (a). Class of non-residents (9) A waiver made by the Minister under paragraph (8)(a) may apply in respect of a class of non-resident persons specified by the Minister. (5) Subsections (1) to (3) apply in respect of amounts paid to an unclaimed property authority after December 31, 2026.

74(1) Paragraph 157(3)(e) of the Act is replaced by the following: (e) 1/12 of the total of the amounts each of which is deemed by subsection 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3), 127.44(2), 127.45(2), 127.48(2), 127.49(2) or 127.491(2) to have been paid on account of the corporation’s tax payable under this Part for the year. (2) Paragraph 157(3.1)(c) of the Act is replaced by the following: (c) 1/4 of the total of the amounts each of which is deemed by subsection 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3), 127.44(2), 127.45(2), 127.48(2), 127.49(2) or 127.491(2) to have been paid on account of the corporation’s tax payable under this Part for the taxation year. (3) Subsections (1) and (2) are deemed to have come into force on April 16, 2024.

75(1) Section 160 of the Act is amended by adding the following after subsection (1.6): (1.7) If a purchaser corporation and a taxpayer have jointly elected under paragraph 110.62(1)(e) in respect of a disposition of shares of the capital stock of a corporation and paragraph 110.62(4)(a) applies, the subject corporation, the purchaser corporation and the taxpayer are jointly and severally, or solidarily, liable for the tax payable by the taxpayer under this Part to the extent that the tax payable by the taxpayer is greater than it would have been if the disposition had satisfied the conditions set out in section 110.62. (2) Subsection (1) is deemed to have come into force on January 1, 2024.

76(1) Paragraph 160.1(1)(b) of the Act is replaced by the following: (b) the taxpayer shall pay to the Receiver General interest at the prescribed rate on the excess (other than any portion of the excess that can reasonably be considered to arise as a consequence of the operation of section 122.5, 122.61, 122.72, 122.8 or 127.421 ) from the day it became payable to the date of payment. (2) Subsection 160.1(3) of the Act is replaced by the following: (3) The Minister may at any time assess a taxpayer in respect of any amount payable by the taxpayer because of any of subsections (1) to (1.2) or for which the taxpayer is liable because of subsection (2.1) or (2.2), and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section, as though it were made under section 152 in respect of taxes payable under this Part, except that no interest is payable on an amount assessed in respect of an excess referred to in subsection (1) that can reasonably be considered to arise as a consequence of the operation of section 122.5, 122.61, 122.72, 122.8 or 127.421 . (3) Subsections (1) and (2) are deemed to have come into force on June 20, 2024.

77(1) The portion of subsection 160.2(4) of the Act before paragraph (a) is replaced by the following: (4) If a taxpayer and an annuitant have, by virtue of subsection (1) or (2) become jointly and severally, or solidarily, liable in respect of part or all of a liability of the annuitant under this Act, the following rules apply: (2) Paragraph 160.2(4)(b) of the Act is replaced by the following: (b) a payment by the annuitant on account of the annuitant’s liability discharges the taxpayer’s liability only to the extent that the payment operates to reduce the annuitant’s liability to an amount less than the amount in respect of which the taxpayer was, by subsection (1) or (2), as the case may be, made jointly and severally, or solidarily, liable. (3) Subsections (1) and (2) are deemed to have come into force on April 1, 2023.

78(1) Subsection 163(2) of the Act is amended by adding the following after paragraph (c.6): (c.7) the amount, if any, by which (i) the amount that would be deemed by subsection 122.93(2) to have been paid for the year by the person if that amount were calculated by reference to the person’s claim for the year under that subsection exceeds (ii) the amount that is deemed by that subsection to be paid for the year by the person. (2) Paragraph 163(2)(d.1) of the Act is replaced by the following: (d.1) the amount, if any, by which (i) the amount that would be deemed by subsection 127.44(2), 127.45(2), 127.48(2), 127.49(2) or 127.491(2) , as the case may be, to be paid for the year by the person if that amount were calculated by reference to the information provided in the return or form filed for the year pursuant to that subsection exceeds (ii) the amount that is deemed by subsection 127.44(2), 127.45(2), 127.48(2), 127.49(2) or 127.491(2) , as the case may be, to be paid for the year by the person, (3) Subparagraph 163(5)(a)(i) of the Act is replaced by the following: (i) makes — or participates in, assents to or acquiesces in, the making of — a false statement or omission in a return of income of a trust that is not subject to one of the exceptions listed in paragraphs 150(1.2)(a) to (r) for a taxation year, or (4) Subsection (1) applies to the 2026 and subsequent taxation years. (5) Subsection (2) is deemed to have come into force on April 16, 2024. (6) Subsection (3) applies to taxation years that end after December 30, 2025.

79(1) Subsections 164(6) and (6.1) of the Act are replaced by the following: (6) If in the course of administering the graduated rate estate of a taxpayer, the taxpayer’s legal representative has, in a taxation year (in this subsection referred to as the “particular year”) that is within the first three taxation years of the estate, (a) disposed of capital property of the estate so that the total of all amounts each of which is a capital loss from the disposition of a property in the particular year exceeds the total of all amounts each of which is a capital gain from the disposition of a property in the particular year , or (b) disposed of all of the depreciable property of a prescribed class of the estate so that the undepreciated capital cost to the estate of property of that class at the end of the particular year is, by virtue of subsection 20(16) or any regulation made under paragraph 20(1)(a), deductible in computing the income of the estate for the particular year, despite any other provision of this Act, the following rules apply: (c) such parts of one or more capital losses of the estate from the disposition of properties in the particular year (the total of which is not to exceed the excess referred to in paragraph (a)) as the legal representative so elects, in prescribed form and manner on or before the filing-due date for the particular taxation year of the estate , are deemed (except for the purpose of subsection 112(3) and this paragraph) to be capital losses of the deceased taxpayer from the disposition of the properties by the taxpayer in the taxpayer’s last taxation year and not to be capital losses of the estate from the disposition of those properties, (d) such part of the amount of any deduction described in paragraph (b) (not exceeding the amount that, but for this subsection, would be the total of the non-capital loss and the farm loss of the estate for the particular year) as the legal representative so elects, in prescribed form and manner on or before the filing-due date for the particular year of the estate, is deductible in computing the income of the taxpayer for the taxpayer’s last taxation year and is not deductible in computing any loss of the estate, (e) the legal representative shall, at or before the time prescribed for filing the election referred to in paragraphs (c) and (d), file a prescribed form amending the return of income of the deceased taxpayer for the taxpayer’s last taxation year to give effect to the rules in those paragraphs, and (f) in computing the taxable income of the deceased taxpayer for a taxation year preceding the taxpayer’s last taxation year, no amount may be deducted in respect of an amount referred to in paragraph (c) or (d). Realization of deceased employees’ options (6.1) Despite any other provision of this Act, if a right to acquire securities (as defined in subsection 7(7)) under an agreement in respect of which a benefit was deemed by paragraph 7(1)(e) to have been received by a taxpayer (in this subsection referred to as the “right”) is exercised or disposed of by the taxpayer’s legal representative in a taxation year that is within the first three taxation years of the graduated rate estate of the taxpayer and the representative so elects in prescribed form and manner on or before the filing-due date for the taxation year of the estate , (a) the amount, if any, by which (i) the amount of the benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer in respect of the right exceeds the total of (ii) the amount, if any, by which the value of the right immediately before the time it was exercised or disposed of exceeds the amount, if any, paid by the taxpayer to acquire the right, and (iii) where in computing the taxpayer’s taxable income for the taxation year in which the taxpayer died an amount was deducted under paragraph 110(1)(d) in respect of the benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer in that year by reason of paragraph 7(1)(e) in respect of that right, 1/2 of the amount, if any, by which the amount determined under subparagraph (i) exceeds the amount determined under subparagraph (ii), shall be deemed to be a loss of the taxpayer from employment for the taxpayer’s last taxation year; (b) there shall be deducted in computing the adjusted cost base to the estate of the right at any time the amount of the loss that would be determined under paragraph (a) if that paragraph were read without reference to subparagraph (a)(iii); and (c) the legal representative shall, at or before the time prescribed for filing the election under this subsection, file a prescribed form amending the return of income of the taxpayer for the taxpayer’s last taxation year to give effect to paragraph (a). (2) Subsection (1) applies to taxation years of (a) individuals who died on or after August 12, 2024; and (b) graduated rate estates of individuals who died on or after August 12, 2024.

80(1) Subsection 183.1(7) of the Act is replaced by the following: (7) If this section has been applied in respect of an amount, subsections 110.6(8), 110.61(8) and 110.62(8) do not apply to the capital gain in respect of which the amount formed all or a part of the proceeds of disposition. (2) Subsection (1) is deemed to have come into force on January 1, 2024.

81(1) Subparagraph (a)(ii) of the definition qualifying issuance in subsection 183.3(1) of the Act is replaced by the following: (ii) a bond, debenture, note or other security (other than equity) of the covered entity that was issued solely for cash consideration, or that was issued in an exchange described in paragraph (c) , the terms of which confer on the holder the right to make the exchange, or (2) Paragraph (c) of the definition qualifying issuance in subsection 183.3(1) of the Act is replaced by the following: (c) to a person or partnership, with which the covered entity deals at arm’s length and is not affiliated, in exchange for property used in an active business carried on by the covered entity or by a specified affiliate of the covered entity . ( émission admissible ) (3) Subparagraph (a)(ii) of the definition reorganization transaction in subsection 183.3(1) of the Act is replaced by the following: (ii) another entity that is related to the covered entity immediately before the exchange and is a covered entity for its taxation year that includes the exchange, or (4) Paragraph (c) of the definition reorganization transaction in subsection 183.3(1) of the Act is replaced by the following: (c) on a winding-up (i) of the covered entity during which all or substantially all of the property owned by the covered entity is distributed to the equity holders of the covered entity, or (ii) to which subsection 88(1) applies; (5) The definition reorganization transaction in subsection 183.3(1) of the Act is amended by striking out “or” at the end of paragraph (g) and by adding the following after that paragraph: (g.1) at the demand of a holder of the equity, in accordance with the conditions of the issued units of the trust, for an amount that does not exceed the portion of the net asset value (as defined in subsection 132(4)) of the trust attributable to that equity at the time of the redemption, acquisition or cancellation, if the covered entity is a trust that has one or more classes of units in continuous distribution; or (6) The portion of paragraph (a) of the description of B in subsection 183.3(2) of the Act before the formula is replaced by the following: (a) if equity of the covered entity (other than substantive debt) is redeemed, acquired or cancelled in the taxation year by the covered entity , pursuant to a reorganization transaction described in paragraph (a) or (b) of that definition and any portion of the consideration received by a holder for the equity is not equity consideration described in paragraph (a) or (b) of the definition reorganization transaction , the amount determined by the formula (7) The portion of subsection 183.3(5) of the Act before paragraph (a) is replaced by the following: (5) For the purposes of subsections (1) and (2), if a specified affiliate of a covered entity acquires equity of the covered entity, the equity is deemed to be acquired by the covered entity unless the specified affiliate is (8) Subsections (1) to (7) are deemed to have come into force on January 1, 2024.

82(1) Paragraph 183.4(1)(c) of the Act is replaced by the following: (c) if the entity is a partnership, every member of the partnership must — on or before the day on which a return is, or would be if the entity were a SIFT partnership, required to be filed for the year under section 229 of the Income Tax Regulations — file with the Minister a return for the year under this Part in prescribed form. (2) Section 183.4 of the Act is amended by adding the following after subsection (1): (1.1) For the purposes of paragraph (1)(c), if, in respect of a taxation year of a partnership, a particular member of the partnership has authority to act for the partnership, (a) if the particular member has filed a return as required by this Part for the year, each other person who was a member of the partnership during the year is deemed to have filed the return; and (b) a return that has been filed by any other member of the partnership for the year is not valid and is deemed not to have been filed by any member of the partnership. (3) Subsections (1) and (2) are deemed to have come into force on January 1, 2024.

83(1) Subparagraphs (d)(i) to (iii) of the definition exempt contribution in subsection 207.01(1) of the Act are replaced by the following: (i) the amount by which the amount of the survivor payment exceeds the total of all other contributions designated by the survivor in relation to the survivor payment, and (ii) if the individual had, immediately before the individual’s death, an excess TFSA amount or if payments described in paragraph (b) are made to more than one survivor of the individual, nil or the greater amount, if any, allowed by the Minister in respect of the contribution. ( cotisation exclue ) (2) Subsection (1) comes into force or is deemed to have come into force on January 1, 2026.

84(1) Subsection 207.04(3) of the Act is replaced by the following: (3) For the purposes of this section and subsections 146(10.1), 146.1(5), 146.2(6), 146.3(9), 146.4(5), 146.6(3) and 207.01(6), if a trust governed by a registered plan holds property at any time that is, for the trust, both a prohibited investment and a non-qualified investment, the property is deemed at that time not to be a non-qualified investment, but remains a prohibited investment, for the trust. (2) Section 207.04 of the Act is amended by adding the following after subsection (6): Securities lending arrangements (7) For the purposes of this section and subsections 146(10.1), 146.1(5), 146.2(6), 146.3(9), 146.4(5) and 146.6(3), a right received by a lender under a securities lending arrangement is deemed not to be a non-qualified investment for a trust if (a) the security lent or transferred under the arrangement is described in paragraph (d) of the definition qualified investment in section 204; (b) the lender under the arrangement is the trust; (c) the borrower under the arrangement is a registered securities dealer resident in Canada; (d) it is reasonable to conclude that the controlling individual of the registered plan that governs the trust neither knew nor ought to have known that the security lent or transferred under the arrangement (or property substituted for it) would be, while lent or transferred under the arrangement, received by a person who does not deal at arm’s length with the controlling individual of the registered plan that governs the trust; (e) the trust has a right under the arrangement to require the borrower to transfer or return an identical security (within the meaning assigned by paragraph (b) of the definition securities lending arrangement in subsection 260(1)) at any time throughout the period described in paragraph (c) of that definition; (f) property that is described in paragraph (a) or (b) of the definition qualified investment in section 204 that is of equivalent value to the security lent under the arrangement is held in trust for the benefit of the lender and is to be distributed to the lender in the event that an identical security (within the meaning assigned by paragraph (b) of the definition securities lending arrangement in subsection 260(1)) is not transferred or returned to the lender under the arrangement; and (g) the controlling individual of the registered plan that governs the trust is provided written disclosure of the arrangement and consents to the arrangement prior to the time it is entered into. (3) Subsection (1) is deemed to have come into force on April 1, 2023. (4) Subsection (2) is deemed to have come into force on January 1, 2023.

85(1) The portion of subsection 211.92(10) of the English version of the Act before the formula is replaced by the following: (10) Except where subsection (11) applies, if at any time in a particular taxation year during the total CCUS project review period of a CCUS project a taxpayer disposes of or removes from Canada a property for which the taxpayer’s qualified CCUS expenditure resulted in the determination of a CCUS refurbishment tax credit for the year or a previous taxation year, then there shall be added to the tax otherwise payable by the taxpayer under this Part for the year the amount determined by the formula (2) Subsection 211.92(12) of the Act is replaced by following: Partnerships (12) Subject to section 127.47, if subsection 127.44(11) has at any time applied to add an amount in computing the CCUS tax credit of a current or former member of a partnership, then for the purposes of this Part, subsections (2) to (11) shall apply to determine amounts in respect of the partnership as if the partnership were a taxable Canadian corporation, its fiscal period were its taxation year and it had deducted all of the CCUS tax credits that were previously added in computing the CCUS tax credit of any member of the partnership under subsection 127.44(2) because of the application of subsection 127.44(11) in respect of its partnership interest. (3) Subsection 211.92(15) of the Act is replaced by the following: Joint and several, or solidary, liability (15) Each current or former member of a partnership is jointly and severally, or solidarily, liable for any portion of the amount of tax — determined because of subsection (12) in respect of the partnership for a fiscal period — that is not added to the tax payable (a) of a qualifying taxpayer under subsection (13); or (b) of a taxable Canadian corporation because of subsection (14) and paid by the corporation by its filing-due date for its taxation year that includes the end of the fiscal period . Former member liability (16) If a particular taxpayer was, at the time that an amount is determined because of subsection (12) in respect of the partnership for a taxation year, no longer a member of the partnership, the particular taxpayer’s liability for tax because of subsection (15) is limited to the total of all amounts each of which is an amount determined for the particular taxpayer under subsection 127.44(2) because of its membership in the partnership. (4) Subsections (1) to (3) are deemed to have come into force on January 1, 2022.

86(1) Subsection 211.93(3) of the Act is replaced by the following: (3) If more than one person is required by subsection (1) to submit a knowledge sharing report in respect of a knowledge sharing CCUS project, the submission with full and accurate disclosure by any one of such persons of the report is deemed to have been made by each person to whom subsection (1) applies in respect of the report. (2) Subsection (1) is deemed to have come into force on January 1, 2022.

87(1) Paragraph 212(1)(i) of the Act is replaced by the following: (i) an amount that would, if the non-resident person had been resident in Canada throughout the taxation year in which the amount was received or receivable, be required by paragraph 56(1)(m) or subsection 56.4(2) to be included in computing the non-resident person’s income for the taxation year, except an amount deemed to be a payment of interest and referred to in subsection 214(15) ; (2) Subsection (1) is deemed to have come into force on August 12, 2024.

88(1) The portion of paragraph 212.1(6)(b) of the Act before subparagraph (i) is replaced by the following: (b) for the purposes of subsections (1) and (1.1) and paragraph (c), if at any time a conduit disposes of shares — other than a disposal of shares by a non-resident trust or by a trust resident in Canada that is, at that time, a graduated rate estate of an individual (if the trust acquired the shares on and as a consequence of the individual’s death and the individual was, immediately before their death, resident in Canada ) — of the capital stock of a corporation resident in Canada to a purchaser, then (2) Subsection (1) applies to dispositions that occur after February 26, 2018. (3) A written application made by a person under subsection 227(6) of the Act in respect of an amount that has been paid to the Receiver General is deemed to be filed on time if (a) the application is filed with the Minister of National Revenue within 180 days after the day on which this Act receives royal assent; and (b) the person is no longer liable to pay the amount as a result of the enactment by subsection (1) of the portion of paragraph 212.1(6)(b) of the Act before subparagraph (i).

89(1) Subsection 214(15) of the Act is amended by striking out “and” at the end of paragraph (a) and by replacing paragraph (b) with the following: (b) where a non-resident person has entered into an agreement under the terms of which the non-resident person agrees to lend money, or to make money available, to a person resident in Canada, any amount paid or credited as consideration for so agreeing to lend money or to make money available is deemed to be a payment of interest; and (c) where a non-resident person has entered into an agreement under the terms of which the non-resident person agrees to the rescheduling or restructuring of a debt obligation of a person resident in Canada, and the rescheduling or restructuring, as the case may be, provides for the modification of the terms or conditions of the debt obligation or the conversion or substitution of the debt obligation to or with a share or another debt obligation, any amount paid or credited as consideration for so agreeing is deemed to be a payment of interest. (2) Subsection (1) is deemed to have come into force on August 12, 2024.

90(1) Section 215 of the Act is amended by adding the following after subsection (1.1): (1.2) Subsection (1) does not apply in respect of an amount paid or credited by an individual (other than a trust that is not a graduated rate estate) to a non-resident person as rent for the use of a residential property (as defined in subsection 67.7(1)) in which an individual resides (or resided before their death, provided that the amount is paid no more than 36 months after their death). Payment — residential tenants (1.3) If subsection (1.2) applies and subsection (3) does not apply, the non-resident person must immediately remit to the Receiver General the income tax payable under this Part in respect of the amount and submit with the remittance a statement in prescribed form. (2) Subsection (1) is deemed to have come into force on August 12, 2024.

91(1) Subsection 220(2.2) of the Act is replaced by the following: (2.2) Subsection (2.1) does not apply in respect of a prescribed form, receipt or document, or prescribed information, that is filed with the Minister on or after the day specified, in respect of the form, receipt, document or information, in subsection 37(11) or paragraph (m) of the definition investment tax credit in subsection 127(9), or subsection 127.44(17), 127.45(3), 127.48(4), 127.49(3) or 127.491(6) . (2) Subsection (1) is deemed to have come into force on April 16, 2024.

92(1) Subparagraph 241(4)(d)(vi.1) of the Act is amended by striking “and” at the end of clause (C), by adding “and” at the end of clause (D) and by adding the following after clause (D): (E) a property is a clean electricity property (as defined in subsection 127.491(1)) or a qualified natural gas energy equipment (as defined in subsection 127.491(1)), or whether a system is a qualified natural gas energy system (as defined in subsection 127.491(1)), (2) Subparagraph 241(4)(d)(vi.2) of the Act is replaced by the following: (vi.2) to a person employed or engaged in the service of an office or agency of the Government of Canada solely for the purposes of administering or enforcing sections 127.‍44 to 127.‍491 and 211.‍92 to 211.‍95 or the evaluation or formulation of related policies or guidelines, (3) Paragraph 241(4)(d) of the Act is amended by adding the following after subparagraph (x.1): (x.2) to an official of the Department of Employment and Social Development solely for the purpose of the administration or enforcement of the Canada Labour Code as it relates to the misclassification of employees, (4) Subsections (1) and (2) are deemed to have come into force on April 16, 2024.

93(1) The definitions arm’s length allocation , arm’s length transfer price , tax benefit and transfer price in subsection 247(1) of the Act are repealed. (2) The definitions transfer pricing income adjustment and transfer pricing income setoff adjustment in subsection 247(1) of the Act are replaced by the following: transfer pricing income adjustment of a taxpayer for a taxation year means the total of all amounts each of which is the amount, if any, by which an adjustment made under subsection (2.02) (other than an adjustment included in determining a transfer pricing capital adjustment of the taxpayer for a taxation year) would result in an increase in the taxpayer’s income for the year or a decrease in a loss of the taxpayer for the year from a source if that adjustment were the only adjustment made under subsection (2.02) . ( redressement de revenu ) transfer pricing income setoff adjustment of a taxpayer for a taxation year means the total of all amounts each of which is the amount, if any, by which an adjustment made under subsection (2.02) (other than an adjustment included in determining a transfer pricing capital setoff adjustment of the taxpayer for a taxation year) would result in a decrease in the taxpayer’s income for the year or an increase in a loss of the taxpayer for the year from a source if that adjustment were the only adjustment made under subsection (2.02) . ( redressement compensatoire de revenu ) (3) Subparagraph (a)(i) of the definition transfer pricing capital adjustment in subsection 247(1) of the Act is replaced by the following: (i) 1/2 of the amount, if any, by which the adjusted cost base to the taxpayer of a capital property (other than a depreciable property) is reduced in the year because of an adjustment made under subsection (2.02) , or (4) Subparagraph (a)(iii) of the definition transfer pricing capital adjustment in subsection 247(1) of the Act is replaced by the following: (iii) the amount, if any, by which the capital cost to the taxpayer of a depreciable property is reduced in the year because of an adjustment made under subsection (2.02) ; and (5) Subparagraph (b)(i) of the definition transfer pricing capital adjustment in subsection 247(1) of the Act is replaced by the following: (i) 1/2 of the amount, if any, by which the adjusted cost base to a partnership of a capital property (other than a depreciable property) is reduced in a fiscal period that ends in the year because of an adjustment made under subsection (2.02) , and (6) Subparagraph (b)(iii) of the definition transfer pricing capital adjustment in subsection 247(1) of the Act is replaced by the following: (iii) the amount, if any, by which the capital cost to a partnership of a depreciable property is reduced in the period because of an adjustment made under subsection (2.02) , (7) Subsection 247(1) of the Act is amended by adding the following in alphabetical order: actual conditions , in respect of a transaction or series of transactions, means the conditions that actually apply between any of the participants in the transaction or series. ( conditions réelles ) arm’s length conditions , in respect of a transaction or series of transactions, means the conditions that would have applied had the participants been dealing at arm’s length in comparable circumstances, including the possibility that no transaction or series, or a different transaction or series, would have been concluded had the participants been dealing at arm’s length in comparable circumstances. ( conditions de pleine concurrence ) economically relevant characteristics , in respect of a transaction or series of transactions, includes (a) to the extent that the following contractual terms are not inconsistent with the actual conduct of the participants in the transaction or series, (i) the contractual terms of the transaction or series, and (ii) the contractual terms of each other transaction or series that is relevant to the transaction or series and that involves at least one of the participants or any other member of the multinational enterprise group; (b) the actual conduct of the participants in the transaction or series, and in particular the functions performed by those participants, taking into account (i) assets used and risks assumed, (ii) how those functions relate to the wider generation of value by the multinational enterprise group to which the participants belong, (iii) circumstances surrounding the transaction or series, and (iv) industry practices; (c) the characteristics of any property transferred or service provided; (d) the economic circumstances of the participants and of the market in which the participants operate; and (e) the business strategies pursued by the participants. ( caractéristiques économiquement pertinentes ) multinational enterprise group means the group made up of the taxpayer or the partnership, or member of the partnership, and the non-resident person (or a partnership of which the non-resident person is a member) who are participants in a transaction or series of transactions referred to in subsection (2), as well as any other person that does not deal at arm’s length with at least one of the participants. ( groupe d’entreprises multinationales ) Transfer Pricing Guidelines means (a) if no text is prescribed under paragraph (b), the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations , as adopted by the Committee on Fiscal Affairs on January 7, 2022; or (b) any text prescribed by regulation. ( Principes applicables en matière de prix de transfert ) (8) Subsection 247(2) of the Act is replaced by the following: (1.1) For the purposes of this section, a transaction or series of transactions is to be analyzed and determined with reference to the economically relevant characteristics of the transaction or series. Interpretation of conditions (1.2) For the purposes of the definitions actual conditions and arm’s length conditions in subsection (1), the word “conditions” is to be interpreted broadly, and includes, but is not limited to, price, rate, gross margin, net margin, the division of profit, contributions to costs and any commercial or financial information relevant to the determination of the quantum or nature of initial amounts or adjusted amounts, as the case may be. Transfer pricing adjustment — application (2) Subsection (2.02) applies to a taxpayer or a partnership in respect of a transaction or series of transactions if (a) the taxpayer or the partnership and a non-resident person with whom the taxpayer or the partnership, or a member of the partnership, does not deal at arm’s length (or a partnership of which the non-resident person is a member) are participants in the transaction or series; and (b) the transaction or series includes actual conditions different from arm’s length conditions. Transfer pricing adjustment — deeming rule (2.01) For the purposes of paragraph (2)(b), a transaction or series of transactions is deemed to include actual conditions different from arm’s length conditions if a condition does not exist in respect of the transaction or series, but would have existed had the participants in the transaction or series been dealing at arm’s length in comparable circumstances. Transfer pricing adjustment (2.02) If this subsection applies to a taxpayer or a partnership in respect of a transaction or series of transactions, any amounts (in this section referred to as the “initial amounts”) that would be determined for the purposes of applying the provisions of this Act (if this Act were read without reference to this section and section 245) in respect of the taxpayer or the partnership for a taxation year or fiscal period are to be adjusted (in this section referred to as an “adjustment”) to the quantum or nature of the amounts (in this section referred to as the “adjusted amounts”) that would have been determined if arm’s length conditions in respect of the transaction or series had applied. Transfer Pricing Guidelines (2.03) For the purposes of determining the effect of this Part in relation to a taxpayer or a partnership, each of the analysis and determination of a transaction or series of transactions under subsection (1.1), the identification of arm’s length conditions under paragraph (2)(b) and the determination of amounts under subsection (2.02) are to be made so as to best achieve consistency with the Transfer Pricing Guidelines. Most appropriate method (2.04) For the purposes of this Part, whether a transaction or series of transactions includes actual conditions that differ from arm’s length conditions is to be determined through an analysis where the most appropriate method is selected and applied in accordance with the Transfer Pricing Guidelines. (9) The portion of subsection 247(2.1) of the Act before paragraph (a) is replaced by the following: Ordering (2.1) For the purpose of applying subsection (2.02) in the context of the other provisions of this Act, the following order is to be applied: (10) Paragraph 247(2.1)(c) of the Act is replaced by the following: (c) then apply each of the provisions of this Act (other than subsection (2.02) and, for greater certainty, including section 245) using the adjusted amounts. (11) Subparagraphs 247(3)(a)(ii) and (iii) of the Act are replaced by the following: (ii) the total of all amounts each of which is the portion of the taxpayer’s transfer pricing capital adjustment or transfer pricing income adjustment for the year that can reasonably be considered to relate to a particular transaction or series of transactions , where (A) the transaction or series is a qualifying cost contribution arrangement in which the taxpayer or a partnership of which the taxpayer is a member is a participant, or (B) in any other case, the taxpayer or a partnership of which the taxpayer is a member made reasonable efforts to determine amounts that are based on arm’s length conditions in respect of the transaction or series , and to use those amounts for the purposes of this Act, and (iii) the total of all amounts, each of which is the portion of the taxpayer’s transfer pricing capital setoff adjustment or transfer pricing income setoff adjustment for the year that can reasonably be considered to relate to a particular transaction or series , where (A) the transaction or series is a qualifying cost contribution arrangement in which the taxpayer or a partnership of which the taxpayer is a member is a participant, or (B) in any other case, the taxpayer or a partnership of which the taxpayer is a member made reasonable efforts to determine amounts that are based on arm’s length conditions in respect of the transaction or series , and to use those amounts for the purposes of this Act, (12) Subparagraphs 247(3)(b)(i) and (ii) of the Act are replaced by the following: (i) 10% of the amount that would be the taxpayer’s gross revenue for the year if this Act were read without reference to subsection (2.02) , subsections 69(1) and (1.2) and section 245, and (ii) $ 10,000,000 . (13) Subsection 247(4) of the Act is replaced by the following: Contemporaneous documentation (4) For the purposes of subsection (3) and the definition qualifying cost contribution arrangement in subsection (1), a taxpayer or a partnership is deemed not to have made reasonable efforts to determine and use amounts that are based on arm’s length conditions in respect of a transaction or series of transactions or not to have participated in a transaction or series that is a qualifying cost contribution arrangement, unless the taxpayer or the partnership, as the case may be, (a) makes or obtains, on or before the taxpayer’s or partnership’s documentation-due date for the taxation year or fiscal period, as the case may be, in which the transaction or series is entered into, records or documents that provide a description that is complete and accurate in all material respects of (i) the property or services to which the transaction or series relates, (ii) the contractual terms of the transaction or series and their relationship, if any, to the contractual terms of each other transaction or series that is relevant to the transaction or series and that involves at least one of the participants or any other member of the multinational enterprise group , (iii) the identity of the participants and their relationship to each other at the time the transaction or series was entered into, (iv) the functions performed by each of the participants in the transaction or series, based on their actual conduct, taking into account (A) assets used and risks assumed, (B) how those functions relate to the wider generation of value by the multinational enterprise group to which the participants belong, (C) circumstances surrounding the transaction or series, and (D) industry practices, (v) the data and methods considered and the analysis performed to determine amounts that are based on arm’s length conditions and to select and apply the most appropriate method in accordance with the Transfer Pricing Guidelines in respect of the transaction or series, and (vi) the economic circumstances , assumptions, policies and business strategies, if any, that influenced the determination of the amounts that are based on arm’s length conditions in respect of the transaction or series ; (b) for each subsequent taxation year or fiscal period, if any, in which the transaction or series continues, makes or obtains, on or before the taxpayer’s or partnership’s documentation-due date for that year or period, as the case may be, records or documents that completely and accurately describe each material change in the year or period to the matters referred to in any of subparagraphs (a)(i) to (vi) in respect of the transaction or series ; and (c) provides the records or documents described in paragraphs (a) and (b) to the Minister within 30 days after service, made personally or by registered or certified mail, of a written request therefor. Contemporaneous documentation simplification measures (4.1) Subsection (4) does not apply to a taxpayer or partnership for a particular taxation year or fiscal period in respect of a transaction or series if the taxpayer or partnership (a) meets prescribed conditions; and (b) makes, obtains and provides prescribed documentation in prescribed manner. (14) Subsection 247(7) of the Act is replaced by the following: Exclusion — loans to certain controlled foreign affiliates (7) Where, in a taxation year of a corporation resident in Canada, a non-resident person owes an amount to the corporation, the non-resident person is a controlled foreign affiliate of the corporation for the purpose of section 17 throughout the period in the year during which the amount is owing and it is established that the amount owing is an amount owing described in paragraph 17(8)(a) or (b), subsection (2.02) does not apply to adjust the amount of interest paid, payable or accruing in the year on the amount owing. (15) The portion of subsection 247(7.1) of the Act before paragraph (a) is replaced by the following: Exclusion — certain guarantees (7.1) Subsection (2.02) does not apply to adjust an amount of consideration paid, payable or accruing to a corporation resident in Canada (in this subsection referred to as the “parent”) in a taxation year of the parent for the provision of a guarantee to a person or partnership (in this subsection referred to as the “lender”) for the repayment, in whole or in part, of a particular amount owing to the lender by a non-resident person, if (16) Subsection 247(10) of the Act is replaced by the following: No adjustment unless appropriate (10) An adjustment (other than an adjustment that results in or increases a transfer pricing capital adjustment or a transfer pricing income adjustment of a taxpayer for a taxation year) shall not be made under subsection (2.02) unless, in the opinion of the Minister, the circumstances are such that it would be appropriate that the adjustment be made. (17) Subparagraph 247(12)(b)(i) of the Act is amended by striking out “and” at the end of clause (A) and by replacing clause (B) with the following: (B) the definition transfer pricing capital adjustment in subsection (1) were read without reference to the references therein to “1/2 of”, and (C) the definition transfer pricing income adjustment in subsection (1) were read as follows: “of a taxpayer for a taxation year means the total of all amounts each of which is the amount, if any, that would result, from an adjustment made under subsection (2.02) (other than an adjustment included in determining a transfer pricing capital adjustment of the taxpayer for a taxation year), in an increase in the taxpayer’s income for the year or a decrease in a loss of the taxpayer for the year from a source if that adjustment were the only adjustment made under subsection (2.02)” (18) Subparagraph 247(12)(b)(ii) of the Act is amended by striking out “and” at the end of clause (A) and by replacing clause (B) with the following: (B) the definition transfer pricing capital adjustment in subsection (1) were read without reference to the references therein to “1/2 of”, (C) the definition transfer pricing income adjustment in subsection (1) were read as follows: “of a taxpayer for a taxation year means the total of all amounts each of which is the amount, if any, that would result, from an adjustment made under subsection (2.02) (other than an adjustment included in determining a transfer pricing capital adjustment of the taxpayer for a taxation year), in an increase in the taxpayer’s income for the year or a decrease in a loss of the taxpayer for the year from a source if that adjustment were the only adjustment made under subsection (2.02)”, and (D) the definition transfer pricing income setoff adjustment in subsection (1) were read as follows: “of a taxpayer for a taxation year means the total of all amounts each of which is the amount, if any, that would result, from an adjustment made under subsection (2.02) (other than an adjustment included in determining a transfer pricing capital set-off adjustment of the taxpayer for the taxation year), in a decrease in the taxpayer’s income for the year or in an increase in a loss of the taxpayer for the year from a source if that adjustment were the only adjustment made under subsection (2.02)”. (19) Subsections (1) to (18) apply to taxation years and fiscal periods that begin after November 4, 2025.

94(1) The definitions recognized derivatives exchange , specified mutual fund trust , specified synthetic equity arrangement , synthetic equity arrangement chain and tax-indifferent investor in subsection 248(1) of the Act are repealed. (2) The definition superannuation or pension benefit in subsection 248(1) of the Act is replaced by the following: superannuation or pension benefit includes any amount received out of or under a superannuation or pension fund or plan (including, except for the purposes of subparagraph 56(1)(a)(i), a pooled registered pension plan) and, without restricting the generality of the foregoing, includes (a) any payment made to a beneficiary under the fund or plan or to an employer or former employer of the beneficiary under the fund or plan (i) in accordance with the terms of the fund or plan, (ii) resulting from an amendment to or modification of the fund or plan, or (iii) resulting from the termination of the fund or plan, and (b) any payment made to an individual by an unclaimed property authority, if an amount in respect of the payment had been paid to the unclaimed property authority directly from a registered pension plan, an RRSP or a RRIF in respect of an unlocated individual; ( prestation de retraite ou de pension ) (3) Subclause (b)(i)(B)(I) of the definition derivative forward agreement in subsection 248(1) of the Act is replaced by the following: (I) a tax-indifferent ( as defined in subsection 18.2(1) ), or (4) The definition dividend rental arrangement in subsection 248(1) of the Act is amended by adding “and” at the end of paragraph (b.1), by striking out “and” at the end of paragraph (c) and by repealing paragraph (d). (5) Paragraph (j) of the definition employee ownership trust in subsection 248(1) of the Act is replaced by the following: (j) all or substantially all the fair market value of the property of the trust is derived, directly or indirectly, from shares of the capital stock or indebtedness of one or more qualifying businesses that the trust controls and that carry on an active business ; ( fiducie collective des employés ) (6) Paragraph (c) of the definition qualifying business in subsection 248(1) of the Act is replaced by the following: (c) that deals at arm’s length and is not affiliated with any person ( other than a subject corporation referred to in paragraph (a) of the definition qualifying business transfer that controlled and wholly-owned the corporation immediately before the time the trust acquired control of the corporation ) or partnership that owned, directly or indirectly, 50% or more of the fair market value of the shares of the capital stock or indebtedness of the corporation immediately before the time the trust acquired control of the corporation; ( entreprise admissible ) (7) Paragraph (a) of the definition qualifying business transfer in subsection 248(1) of the Act is replaced by the following: (a) immediately before the disposition, all or substantially all the fair market value of the assets of the subject corporation is derived, directly or indirectly, from assets (other than an interest in a partnership) that are used principally in an active business (referred to in this definition as the “business”) carried on by the subject corporation or a corporation that is controlled and wholly-owned by the subject corporation, (8) Subparagraphs (a)(i) and (ii) of the definition synthetic equity arrangement in subsection 248(1) of the Act are replaced by the following: (i) are entered into by the particular person, by a person or partnership that does not deal at arm’s length with, or is affiliated with, the particular person (referred to in this definition as a “connected person”) or, for greater certainty, by any combination of the particular person and connected persons, with one or more persons or partnerships (referred to in this definition as a “counterparty”), (ii) have the effect, or would have the effect, if each agreement entered into by a connected person were entered into by the particular person, of eliminating all or substantially all the particular person’s risk of loss and opportunity for gain or profit in respect of the DRA share, and, for greater certainty, opportunity for gain or profit includes rights to, benefits from and distributions on a share, and (9) Subparagraph (b)(i) of the definition synthetic equity arrangement in subsection 248(1) of the Act is repealed. (10) Paragraph (b) of the definition zero-emission vehicle in subsection 248(1) of the Act is replaced by the following: (b) is acquired, and becomes available for use, by the taxpayer after March 18, 2019 and before 2034 , (11) Paragraph (d) of the definition zero-emission vehicle in subsection 248(1) of the Act is replaced by the following: (d) would be an accelerated investment incentive property or a reaccelerated investment incentive property of the taxpayer if subsections 1104(4) and (4.01) of the Income Tax Regulations were read without their exclusions for property included in Class 54 or Class 55 of Schedule II to those Regulations. ( véhicule zéro émission ) (12) Subparagraph (b)(iv) of the definition fiducie collective des employés in subsection 248(1) of the French version of the Act is replaced by the following: (iv) immédiatement avant le moment d’un transfert admissible d’entreprise à la fiducie, ne détenait pas, directement ou indirectement, seule ou avec une personne ou société de personnes liée ou affiliée, des actions du capital-actions ou des dettes de l’entreprise admissible, dont la valeur est égale ou supérieure à 50 % de la juste valeur marchande des actions du capital-actions et des dettes de l’entreprise admissible, (13) Subsection 248(1) of the Act is amended by adding the following in alphabetical order: qualifying cooperative business , at a particular time, means a corporation, controlled by a worker cooperative, (a) that is a Canadian-controlled private corporation, (b) of which not more than 40% of the directors consist of individuals that, immediately before the time that the worker cooperative acquired control of the corporation, owned, directly or indirectly, together with any person or partnership that is related to or affiliated with the director, 50% or more of the fair market value of the shares of the capital stock or indebtedness of the corporation, and (c) that deals at arm’s length and is not affiliated with any person (other than a subject corporation referred to in paragraph (a) of the definition “qualifying cooperative conversion” that controlled and wholly-owned the corporation immediately before the time the worker cooperative acquired control of the corporation) or partnership that owned, directly or indirectly, 50% or more of the fair market value of the shares of the capital stock or indebtedness of the corporation immediately before the time the worker cooperative acquired control of the corporation; ( entreprise coopérative admissible ) qualifying cooperative conversion means a disposition by a taxpayer of shares of the capital stock of a corporation (in this definition referred to as the “subject corporation”) to another corporation (in this definition referred to as the “purchaser corporation”), if (a) immediately before the disposition, all or substantially all the fair market value of the assets of the subject corporation is derived, directly or indirectly, from assets (other than an interest in a partnership) that are used principally in an active business carried on by the subject corporation or a corporation that is controlled and wholly-owned by the subject corporation, (b) at the time of the disposition, (i) the taxpayer deals at arm’s length with the purchaser corporation, (ii) the purchaser corporation acquires control of the subject corporation, and (iii) the purchaser corporation is a worker cooperative, and (c) at all times after the disposition, (i) the taxpayer deals at arm’s length with the purchaser corporation and subject corporation, and (ii) the taxpayer does not retain any right or influence that, if exercised, would allow the taxpayer (whether alone or together with any person or partnership that is related to or affiliated with the taxpayer) to control, directly or indirectly in any manner whatever, the purchaser corporation or subject corporation; ( conversion admissible de coopérative ) qualifying cooperative worker means an individual who (a) holds a membership share of a corporation that was incorporated or continued by or under the provisions of a law, of Canada or of a province, that provide for the establishment of the corporation as a cooperative corporation or that provide for the establishment of cooperative corporations, (b) is an employee of the corporation or a qualifying cooperative business controlled by the corporation, (c) does not represent, together with any person or partnership that is related to or affiliated with the individual, more than 50% of the members of the worker cooperative, (d) immediately before the time of a qualifying cooperative conversion that involved the corporation, did not own, directly or indirectly, together with any person or partnership that is related to or affiliated with the individual, shares of the capital stock or indebtedness of the corporation or a qualifying cooperative business controlled by the corporation, the value of which is equal to or greater than 50% of the fair market value of the shares of the capital stock and indebtedness of the corporation or the qualifying cooperative business controlled by the corporation, and (e) has not claimed, and is not related to an individual who claimed, a deduction under subsection 110.62(2) in respect of a disposition of shares of the corporation or a qualifying cooperative business controlled by the corporation; ( travailleur admissible de coopérative ) worker cooperative means a corporation that, at all relevant times, satisfies the following conditions: (a) the corporation is resident in Canada, (b) the corporation was incorporated or continued by or under the provisions of a law, of Canada or of a province, that provide for the establishment of the corporation as a cooperative corporation or that provide for the establishment of cooperative corporations, (c) the corporation is established for the purpose of providing employment to its members, (d) the corporation would be controlled by a particular person if each membership share of the capital stock of the corporation that is owned by a qualifying cooperative worker were owned by the particular person, (e) at least 75% of all individuals employed by the corporation and all qualifying cooperative businesses controlled by the corporation (other than an employee who has not completed an applicable probationary period, which may not exceed 12 months) are holders of a membership share of the corporation, (f) each initial membership share provided to an employee of the corporation and any qualifying cooperative business controlled by the corporation is (i) issued in exchange for a payment of a nominal amount determined in the same manner for all members described in the definition qualifying cooperative worker , and (ii) offered to each employee following their completion of an applicable probationary period, which may not exceed 12 months, (g) at least one-third of the directors of the corporation are qualifying cooperative workers of the corporation, (h) not more than 40% of the directors of the corporation consist of individuals each of whom, immediately before the time of a qualifying cooperative conversion that involved the corporation, owned, directly or indirectly, together with any person or partnership that is related to or affiliated with the director, 50% or more of the fair market value of the shares of the capital stock or indebtedness of the corporation or a qualifying cooperative business controlled by the corporation, and (i) the by-laws of the corporation provide a procedure for allocating, crediting or distributing any surplus earnings of the corporation, including that not less than 50% of those earnings must be paid on the basis of the remuneration earned by the qualifying cooperative workers from the corporation or the labour contributed by those members to the corporation; ( coopérative de travailleurs ) (14) Subsection 248(1) of the Act is amended by adding the following in alphabetical order: unclaimed property authority means an entity that receives and holds property on behalf of individuals that cannot be located, as authorized under the provisions of (a) the Pension Benefits Standards Act, 1985 , (b) the Unclaimed Property Act , CQLR, c. B-5.1, (c) the Unclaimed Property Act , S.B.C. 1999, c. 48, or (d) a prescribed law or a law designated by the Minister of Finance for the purpose of this definition that is published in such a manner as the Minister of Finance deems appropriate; ( autorité des biens non réclamés ) unlocated individual means an individual in respect of whom property held under a registered pension plan, RRIF or RRSP can be paid or transferred to an unclaimed property authority in accordance with the laws of Canada or a province; ( particulier introuvable ) (15) Subsection 248(42) of the Act is replaced by the following: (42) For the purposes of the definition synthetic equity arrangement in subsection (1), paragraph (c) of the definition dividend rental arrangement in subsection (1) and subsection 112(10), an arrangement that reflects the fair market value of more than one type of identical share ( within the meaning of subsection 112(10)) is considered to be a separate arrangement with respect to each type of identical share the value of which the arrangement reflects. (16) Subsections (1), (3), (4), (8) to (11) and (15) are deemed to have come into force on January 1, 2025. (17) Subsection (2) applies in respect of amounts paid to an individual by an unclaimed property authority if an amount in respect of the payment was paid to the unclaimed property authority after December 31, 2026. (18) Subsections (5) to (7) are deemed to have come into force on January 1, 2024. (19) Subsection (13) is deemed to have come into force on January 1, 2024. (20) Subsection (14) comes into force on January 1, 2027.

95(1) Paragraph 251(1)(b) of the Act is replaced by the following: (b) a taxpayer and a personal trust (other than a trust described in any of paragraphs (a) to (e.1) and (h) of the definition trust in subsection 108(1)) are deemed not to deal with each other at arm’s length if the taxpayer, or any person not dealing at arm’s length with the taxpayer, would be beneficially interested in the trust if subsection 248(25) were read without reference to subclauses 248(25)(b)(iii)(A)(II) to (IV); and (2) Subsection (1) is deemed to have come into force on January 1, 2024.

96(1) The definition specified provision in subsection 256.1(1) of the Act is replaced by the following: specified provision means any of subsections 10(10) and 13(24), paragraph 37(1)(h), subsections 66(11.4) and (11.5), 66.7(10) and (11), 69(11) and 111(4), (5), (5.01), (5.1) and (5.3), paragraphs (j) and (k) of the definition investment tax credit in subsection 127(9), subsections 181.1(7) and 190.1(6), section 251.2 and any provision of similar effect. ( dispositions déterminées ) (2) Subsection (1) is deemed to have come into force on August 9, 2022.

97Paragraph 295(5)(d) of the Excise Tax Act is amended by adding the following after subparagraph (v.1): (v.2) to an official of the Department of Employment and Social Development solely for the purpose of the administration or enforcement of the Canada Labour Code as it relates to the misclassification of employees,

98(1) Subparagraph (j.1)(i) of the definition remuneration in subsection 100(1) of the Income Tax Regulations is replaced by the following: (i) the particular payment is in respect of the minimum amount ( determined in accordance with subsection 146.3(1), (1.6) or (1.7) of the Act, as the case may be ) under the fund for a year, or (2) Subsection (1) comes into force on January 1, 2027.

99(1) Paragraph 103(6)(d.1) of the Regulations is replaced by the following: (d.1) a payment made during the lifetime of an annuitant referred to in the definition annuitant in subsection 146.3(1) of the Act under a registered retirement income fund of that annuitant, other than a payment to the extent that it is in respect of the minimum amount ( determined in accordance with subsection 146.3(1), (1.6) or (1.7) of the Act, as the case may be ) under the fund for a year, (2) Subsection (1) comes into force on January 1, 2027.

100(1) The portion of subsection 204.2(1) of the Regulations before paragraph (b) is replaced by the following: 204.2 (1) Every trust, other than a trust described in any of paragraphs 150(1.2)(a) to (q) of the Act, that is required to file a return of income under subsection 150(1) of the Act , shall provide information that includes the name, address, date of birth (in the case of an individual other than a trust), jurisdiction of residence and TIN (as defined in subsection 270(1) of the Act) for each person or partnership who, in the year, (a) is a trustee, beneficiary (subject to subsection (2)) or settlor of the trust; or

204.2(1) Every trust, other than a trust described in any of paragraphs 150(1.2)(a) to (r) of the Act, that is required to file a return of income under subsection 150(1) of the Act, shall provide information that includes the name, address, date of birth (in the case of an individual other than a trust), jurisdiction of residence and TIN (as defined in subsection 270(1) of the Act) for each person or partnership who, in the year,

101(1) Paragraph 600(b) of the Regulations is replaced by the following: (b) subsections 13(4), (7.4) and (29), 20(24), 44(1) and (6), 45(2) and (3), 50(1), 53(2.1), 56.4(13), 70(6.2), (9.01), (9.11), (9.21) and (9.31), 72(2), 73(1), 80.1(1), 82(3), 83(2), 91(1.4), 93.4(2) to (5) , 104(14), 107(2.001), 143(2), 146.01(7), 146.02(7), 164(6) and (6.1), 184(3), 251.2(6) and 256(9) of the Act; (2) Paragraph 600(c) of the Regulations is replaced by the following: (c) paragraphs 12(2.2)(b), (e) of the definition excluded interest and (b) of the definition specified pre-regime loss in subsection 18.2(1) , 66.7(7)(c), (d) and (e) and (8)(c), (d) and (e), 80.01(4)(c), 86.1(2)(f) and 128.1(4)(d), (6)(a) and (c), (7)(d) and (g) and (8)(c) of the Act; (c.1) subclause 95(2)(f.11)(ii)(E)(III) of the Act; and (3) Paragraph 600(c) of the Regulations, as enacted by subsection (2), is replaced by the following: (c) paragraphs 12(2.2)(b), (e) of the definition excluded interest and (b) of the definition specified pre-regime loss in subsection 18.2(1), 66.7(7)(c), (d) and (e) and (8)(c), (d) and (e), 80.01(4)(c), 84.1(2.31)(h) and (2.32)(i) , 86.1(2)(f), 110.61(1)(e), 110.62(1)(e) and 128.1(4)(d), (6)(a) and (c), (7)(d) and (g) and (8)(c) of the Act; (4) Subsection (1) applies to taxation years that begin after 2025. Subsection (1) also applies to preceding taxation years if an election is filed under subsection 93.4(4) or (5) of the Act. (5) Subsection (2) is deemed to have come into force on October 1, 2023. (6) Subsection (3) is deemed to have come into force on January 1, 2024.

102(1) The heading “Property Dispositions” before section 1000 and sections 1000 and 1000.1 of the Regulations are repealed. (2) Subsection (1) applies to taxation years of individuals who died on or after August 12, 2024.

103(1) Subsection 1100(1) of the Regulations is amended by adding the following after paragraph (a.3): (a.4) if a separate class is prescribed by subsection 1101(1ac.1) for a property of a taxpayer that is a new purpose-built residential rental throughout the taxation year, such amount as the taxpayer may claim not exceeding six per cent of the undepreciated capital cost to the taxpayer of the property of that class as of the end of the taxation year (before making any deduction under this subsection for the taxation year); (2) The portion of clause 1100(1)(b)(i)(A) of the Regulations before subclause (I) is replaced by the following: (A) if the property is either an accelerated investment incentive property and the capital cost of the property was incurred before 2024, or a reaccelerated investment incentive property and the capital cost of the property was incurred before 2030 , the lesser of (3) Clause 1100(1)(b)(i)(B) of the Regulations is replaced by the following: (B) if the property is neither an accelerated investment incentive property nor a reaccelerated investment incentive property and is not described in any of subparagraphs (b)(iii) to (v) of the description of F in subsection (2), 50 per cent of the amount for the year calculated in accordance with Schedule III, and (4) Subparagraph 1100(1)(c)(i) of the Regulations is amended by striking out “and” at the end of clause (A) and by adding the following after clause (B): (C) if the property is reaccelerated investment incentive property, the portion of the amount determined under clause (A) that is in respect of the property multiplied by (I) 0.5, if the property becomes available for use in the year and before 2030, and (II) 0.25, if the property becomes available for use in the year and after 2029, and (5) Clause 1100(1)(v)(iv)(A) of the Regulations is replaced by the following: (A) 50 per cent, in the case of an accelerated investment incentive property acquired in the year and before 2024 or a reaccelerated investment incentive property acquired in the year and before 2030 , (6) Subclause 1100(1)(v)(iv)(B)(I) of the Regulations is replaced by the following: (I) accelerated investment incentive property or reaccelerated investment incentive property , and (7) The portion of the first formula in subsection 1100(2) of the Regulations before the description of A is replaced by the following: A(B) + A.1(B.1) − 0.5(C) where (8) The portion of the description of A in subsection 1100(2) of the Regulations before paragraph (a) is replaced by the following: A is, in respect of property of the class that became available for use by the taxpayer in the taxation year and that is accelerated investment incentive property or property acquired before 2025 that is included in any of Classes 54 to 56, (9) Paragraph (a) of the description of A in subsection 1100(2) of the Regulations is replaced by the following: (a) if the property is not included in paragraph (1)(v) or in any of Classes 12, 13, 14, 15, 43.1, 43.2, 53, 54, 55, 56 and 59 or in Class 43 in the circumstances described in paragraph (d), (i) 1/2, for property that became available for use by the taxpayer before 2024, and (ii) nil, for property that became available for use by the taxpayer after 2023, (10) Subparagraph (a)(ii) of the description of A in subsection 1100(2) of the Regulations, as enacted by subsection (9), is replaced by the following: (ii) nil, for property that became available for use by the taxpayer after 2023 ( other than property referred to in any of paragraphs (c.1) to (c.3) ), (11) The description of A in subsection 1100(2) of the Regulations is amended by adding the following after paragraph (c): (c.1) if the class is Class 44, (i) 3, for property that was acquired and became available for use by the taxpayer after April 15, 2024 and before 2027, and (ii) nil, for property that became available for use by the taxpayer after 2026, (c.2) if the class is Class 46, (i) 2 1/3, for property that was acquired and became available for use by the taxpayer after April 15, 2024 and before 2027, and (ii) nil, for property that became available for use by the taxpayer after 2026, (c.3) if the class is Class 50, (i) 9/11, for property that was acquired and became available for use by the taxpayer after April 15, 2024 and before 2027, and (ii) nil, for property that became available for use by the taxpayer after 2026, (12) Subsection 1100(2) of the Regulations is amended by adding the following after the description of A: A.1 is, in respect of property of the class that became available for use by the taxpayer in the taxation year and that is reaccelerated investment incentive property or property acquired after 2024 that is included in any of Classes 54 to 56, (a) if the property is not included in paragraph (1)(v) or in any of Classes 12, 13, 14, 15, 43.1, 44, 46, 50, 53, 54, 55, 56 and 59 or in Class 43 in the circumstances described in paragraph (f), (i) 1/2, for property that became available for use by the taxpayer before 2030, and (ii) nil, for property that became available for use by the taxpayer after 2029, (b) if the class is Class 43.1, (i) 2 1/3, for property that became available for use by the taxpayer before 2030, (ii) 1 1/2, for property that became available for use by the taxpayer in 2030 or 2031, and (iii) 5/6, for property that became available for use by the taxpayer after 2031, (c) if the class is Class 44, (i) 3, for property that became available for use by the taxpayer before 2027, and (ii) nil, for property that became available for use by the taxpayer after 2026, (d) if the class is Class 46, (i) 2 1/3, for property that became available for use by the taxpayer before 2027, and (ii) nil, for property that became available for use by the taxpayer after 2026, (e) if the class is Class 50, (i) 9/11, for property that became available for use by the taxpayer before 2027, and (ii) nil, for property that became available for use by the taxpayer after 2026, (f) if the property is included in Class 53 or — for property acquired after 2025 — is included in Class 43 and would have been included in Class 53 if it had been acquired in 2025, (i) 1, for property included in Class 53, (ii) 2 1/3, for property included in Class 43 that became available for use by the taxpayer before 2030, (iii) 1 1/2, for property included in Class 43 that became available for use by the taxpayer in 2030 or 2031, (iv) 5/6, for property included in Class 43 that became available for use by the taxpayer after 2031, (g) if the class is Class 54 or Class 56, (i) 2 1/3, for property that became available for use by the taxpayer before 2030, (ii) 1 1/2, for property that became available for use by the taxpayer in 2030 or 2031, and (iii) 5/6, for property that became available for use by the taxpayer after 2031, (h) if the class is Class 55, (i) 1 1/2, for property that became available for use by the taxpayer before 2030, (ii) 7/8, for property that became available for use by the taxpayer in 2030 or 2031, and (iii) 3/8, for property that became available for use by the taxpayer after 2031, and (i) in any other case, nil; (13) The description of D in subsection 1100(2) of the Regulations is replaced by the following: D is the total of all amounts, if any, each of which is an amount included in the description of A in the definition undepreciated capital cost in subsection 13(21) of the Act in respect of property of the class that became available for use by the taxpayer in the taxation year and that is accelerated investment incentive property or property acquired before 2025 that is included in any of Classes 54 to 56, and (14) Subsection 1100(2) of the Regulations is amended by striking out “and” at the end of the description of B and by adding the following after the description of B: B.1 is the amount determined, in respect of the class, by the formula D.1 − E.1 where D.1 is the total of all amounts, if any, each of which is an amount included in the description of A in the definition undepreciated capital cost in subsection 13(21) of the Act in respect of property of the class that became available for use by the taxpayer in the taxation year and that is reaccelerated investment incentive property or property acquired after 2024 that is included in any of classes 54 to 56, and E.1 is the amount, if any, by which the amount determined for G exceeds the amount determined for F; and (15) Subparagraph (a)(i) of the description of F in subsection 1100(2) of the Regulations is replaced by the following: (i) because of element A in the definition undepreciated capital cost in subsection 13(21) of the Act in respect of property (other than accelerated investment incentive property or reaccelerated investment incentive property ) that was acquired, or became available for use, by the taxpayer in the taxation year, or (16) Subsection 1100 of the Regulations is amended by adding the following after subsection (2.01): (2.011) For the purposes of subsection (2), (a) if a taxation year begins in 2029 and ends in 2030, the factor determined for A.1 in subsection (2) (other than for the purposes of paragraphs (c), (d) and (e) of the description of A.1 in subsection (2)) is to be replaced by the factor determined by the formula (A(B) + C(D))/(B + D) where A is the factor otherwise determined for A.1 in subsection (2) for 2029, B is the amount that would be determined for D.1 in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2029, C is the factor otherwise determined for A.1 in subsection (2) for 2030, and D is the amount that would be determined for D.1 in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2030; (b) for the purposes of paragraphs (c), (d) and (e) of the description of A.1 in subsection (2), if a taxation year begins in 2026 and ends in 2027, the factor determined for A.1 in subsection (2) is to be replaced by the factor determined by the formula (A(B) + C(D))/(B + D) where A is the factor otherwise determined for A.1 in subsection (2) for 2026, B is the amount that would be determined for D.1 in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2026, C is the factor otherwise determined for A.1 in subsection (2) for 2027, and D is the amount that would be determined for D.1 in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2027; and (c) if a taxation year begins in 2031 and ends in 2032, the factor determined for A.1 in subsection (2) is to be replaced by the factor determined by the formula (A(B) + C(D))/(B + D) where A is the factor otherwise determined for A.1 in subsection (2) for 2031, B is the amount that would be determined for D.1 in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2031, C is the factor otherwise determined for A.1 in subsection (2) for 2032, and D is the amount that would be determined for D.1 in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2032. (17) Section 1100 of the Regulations is amended by adding the following after subsection (2.02): Expenditures excluded from D.1 (2.021) For the purposes of subsection (2), in respect of property of a class in Schedule II that is reaccelerated investment incentive property of a taxpayer solely because of subparagraph 1104(4.01)(b)(i), (a) amounts incurred by any person or partnership in respect of the property are not to be included in determining the amount for D.1 in subsection (2) in respect of the class (i) if the amounts are incurred before 2025, unless (A) the property was acquired after 2024 by a person or partnership from another person or partnership (referred to in this subparagraph as the “transferee” and the “transferor”, respectively), (B) the transferee was either (I) the taxpayer, or (II) a person or partnership that does not deal at arm’s length with the taxpayer, and (C) the transferor (I) dealt at arm’s length with the transferee, and (II) held the property as inventory, and (ii) if the amounts are incurred after 2024 and amounts are deemed to have been deducted under paragraph 20(1)(a) or subsection 20(16) of the Act, in respect of those amounts incurred, under paragraph 1104(4.11)(b); and (b) any amount excluded from the amount determined for D.1 in subsection (2) in respect of the class because of paragraph (a) is to be included in determining the amount for F in subsection (2) in respect of the class, unless no amount in respect of the property would be so included if the property were not reaccelerated investment incentive property of the taxpayer. (18) Subsection (1) is deemed to have come into force on April 16, 2024. (19) Subsections (2) to (8) and (12) to (17) are deemed to have come into force on January 1, 2025. (20) Subsection (9) applies to property acquired after 2021. (21) Subsections (10) and (11) apply to property that is acquired and becomes available for use after April 15, 2024.

104(1) Section 1101 of the Regulations is amended by adding the following after subsection (1ac): (1ac.1) For the purposes of this Part, each property of a taxpayer that is a new purpose-built residential rental is prescribed to be a separate class of property. (2) Section 1101 of the Regulations is amended by adding the following after subsection (2c): International Shipping Vessel (2d) A separate class is prescribed for each vessel of a taxpayer described in Class 7 in Schedule II, including the furniture, fittings, radiocommunication equipment and other equipment attached to the vessel, that has been used by the taxpayer to earn income that would not be included in computing the income of the taxpayer because of paragraph 81(1)(c.1) of the Act. (3) Subsection (1) is deemed to have come into force on April 16, 2024. (4) Subsection (2) is deemed to have come into force on December 31, 2023.

105(1) Subsection 1102(1) of the Regulations is amended by striking out “or” at the end of paragraph (j), by adding “or” at the end of paragraph (k) and by adding the following after paragraph (k): (l) referred to in paragraph 81(1)(c.3) of the Act. (2) Subsection 1102(20.1) of the Regulations is replaced by the following: (20.1) For the purposes of subsections 1100(0.3), (2.02) and (2.021) and 1104(3.1), (4) and (4.01) , a particular person or partnership and another person or partnership shall be considered not to be dealing at arm’s length with each other in respect of the acquisition or ownership of a property if, in the absence of this subsection, they would be considered to be dealing at arm’s length with each other and it may reasonably be considered that the principal purpose of any transaction or event, or a series of transactions or events, is to cause (a) the property to qualify as accelerated investment incentive property, reaccelerated investment incentive property or immediate expensing property; or (b) the particular person or partnership and the other person or partnership to satisfy the condition in subparagraph 1100(0.3)(c)(i) or subclause 1100(2.02)(a)(i)(C)(I) or (2.021)(a)(i)(C)(I) . (3) Subsection (1) is deemed to have come into force on December 31, 2023. (4) Subsection (2) is deemed to have come into force on January 1, 2025.

106(1) Subsection 1104(2) of the Regulations is amended by adding the following in alphabetical order: new purpose-built residential rental means a purpose-built residential rental that (a) was (i) built for use as a purpose-built residential rental if construction began after April 15, 2024 and before 2031, or (ii) previously a building, or part of a building, used as a commercial property that was substantially renovated for use as a purpose-built residential rental if the renovations began after April 15, 2024 and before 2031, and (b) becomes available for use before 2036; ( nouvel ensemble résidentiel construit spécialement pour la location ) purpose-built residential rental means a building or a part of a building situated in Canada (a) that contains (i) four or more residential rental units at least four of which contain private kitchen facilities, a private bath and a private living area, or (ii) 10 or more residential rental units, and (b) in which all or substantially all the residential rental units are rented or offered for rent for continuous periods of not less than 28 consecutive days; ( ensemble résidentiel construit spécialement pour la location ) residential rental unit means a housing unit used or intended for use as a rented residential premises that is not provided to the travelling or vacationing public; ( logement locatif ) (2) Paragraph 1104(4)(a) of the Regulations is replaced by the following: (a) is acquired by the taxpayer after November 20, 2018 and before 2025 and becomes available for use before 2028; and (3) Section 1104 of the Regulations is amended by adding the following after subsection (4): (4.01) For the purposes of this Part and Schedules II to VI, reaccelerated investment incentive property means property of a taxpayer (other than property included in any of Classes 54 to 56) that (a) is acquired by the taxpayer after 2024 and becomes available for use before 2034; and (b) meets either of the following conditions: (i) the property is not a property in respect of which an amount has been deducted under paragraph 20(1)(a) or subsection 20(16) of the Act by any person or partnership for a taxation year ending before the time the property was acquired by the taxpayer, or (ii) the property was not (A) acquired in circumstances where (I) the taxpayer was deemed to have been allowed or deducted an amount under paragraph 20(1)(a) of the Act in respect of the property in computing income for previous taxation years, or (II) the undepreciated capital cost of depreciable property of a prescribed class of the taxpayer was reduced by an amount determined by reference to the amount by which the capital cost of the property to the taxpayer exceeds its cost amount, or (B) previously owned or acquired by the taxpayer or by a person or partnership with which the taxpayer did not deal at arm’s length at any time when the property was owned or acquired by the person or partnership. (4) Section 1104 of the Regulations is amended by adding the following after subsection (4.1): Deemed separate properties (4.11) For the purpose of subparagraph (4.01)(b)(i), if the capital cost to a taxpayer of a depreciable property (referred to in this subsection as the “single property”) includes amounts incurred at different times, then amounts deducted under paragraph 20(1)(a) or subsection 20(16) of the Act in respect of the single property are deemed to have been deducted in respect of a separate property that is not part of the single property to the extent the deducted amounts can reasonably be considered to be in respect of amounts (a) incurred before 2025; or (b) incurred after 2024, if any portion of the single property is considered to have become available for use before the time the single property is first used for the purpose of earning income. (5) The definition transmission equipment in subsection 1104(13) of the Regulations is replaced by the following: transmission equipment means equipment used to transmit electrical energy. ( matériel de transmission ) (6) Subsection 1104(13) of the Regulations is amended by adding the following in alphabetical order: eligible electrical generation equipment means property that is electrical generating equipment described in (a) subparagraph (d)(iii.1), (v), (vi), (vii), (xiv) or (xix) of Class 43.1 in Schedule II; or (b) subparagraph (e)(i) or (iii) of the definition clean electricity property in subsection 127.491(1) of the Act. ( matériel générateur d’électricité admissible ) eligible transmission equipment means property (other than a building) that is transmission equipment of a taxpayer where (a) the transmission equipment is used in connection with eligible electrical generation equipment of the taxpayer; and (b) on annual basis (i) more than 75% of the electrical energy generated by the eligible electrical generation equipment is transmitted by the transmission equipment, and (ii) more than 75% of the electrical energy transmitted by the transmission equipment is generated by the eligible electrical generation equipment. ( matériel de transmission admissible ) (7) Paragraph 1104(15)(b) of the Regulations is replaced by the following: (b) the property utilizes heat obtained from the taxpayer’s system; (8) Subsection 1104(17) of the Regulations is replaced by the following: Environmental Compliance (17) A property that would otherwise be eligible for inclusion in Class 43.1 or Class 43.2 in Schedule II by a taxpayer is deemed not to be eligible for inclusion in either of those classes if, at the time the property becomes available for use, there is substantial non-compliance by the taxpayer with the requirements of any environmental law, by-law or regulation of Canada, a province, a municipality, or a municipal or public body performing a function of government in Canada that is applicable in respect of the property. (9) Subsection (1) is deemed to have come into force on April 16, 2024. (10) Subsections (2) to (4) are deemed to have come into force on January 1, 2025. (11) Subsections (5) and (6) are deemed to have come into force on November 17, 2025. (12) Subsections (7) and (8) are deemed to have come into force on November 21, 2023.

107(1) The formula in subsection 1400(3) of the Regulations is replaced by the following: A + B + (0.95 × C) − (0.9 × D) + E + F + G − [H − (0.9 × I) − (0.05 × J) ] (2) The formula in subsection 1400(3) of the Regulations is amended by striking out “and” at the end of the description of H, by adding “and” at the end of the description of I and by adding the following after the description of I: J is the reinsurance contract held amount in respect of a group of reinsurance contracts that is included in the description of H and that is in respect of a liability for incurred claims in respect of a group of insurance contracts that is included in the description of C. (3) Subsections (1) and (2) apply to taxation years that begin after 2022.

108(1) Paragraph 2902(b) of the Regulations is replaced by the following: (b) an expenditure of a capital nature incurred by a taxpayer in respect of (i) the acquisition of property, except any such expenditure that at the time it was incurred (A) was for first term shared-use-equipment or second term shared-use-equipment (as those terms are defined in subsection 127(9) of the Act), or (B) was for the provision of premises, facilities or equipment if, at the time of the acquisition of the premises, facilities or equipment, it was intended (I) that the premises, facilities or equipment would be used during all or substantially all of the operating time of the premises, facilities or equipment in the expected useful life of the premises, facilities or equipment for the prosecution of scientific research and experimental development in Canada, or (II) that all or substantially all of the value of the premises, facilities or equipment would be consumed in the prosecution of scientific research and experimental development in Canada, (ii) the acquisition of property that is qualified property as defined in subsection 127(9) of the Act, or (iii) the acquisition of property that has been used, or acquired for use or lease, for any purpose whatever before it was acquired by the taxpayer; (2) Subsection (1) applies in respect of property acquired on or after December 16, 2024 and, in the case of lease costs, to amounts that first become payable on or after December 16, 2024.

109(1) The Regulations are amended by adding the following after the heading “Special-Purpose Buildings” after section 2902: 2903 For the purposes of this Part and paragraph 37(8)(e) of the Act, a special-purpose building is a building the working areas of which are designed and constructed to have a displacement in any direction of not more than 0.02 µm (micrometres) and to have, per 0.028 cubic metre of interior airspace, (a) not more than 350 airborne particles of a size less than or equal to 0.1 µm (micrometres) in diameter and no airborne particles of a size greater than 0.1 µm (micrometres) in diameter, (b) not more than 75 airborne particles of a size less than or equal to 0.2 µm (micrometres) in diameter and no airborne particles of a size greater than 0.2 µm (micrometres) in diameter, (c) not more than 30 airborne particles of a size less than or equal to 0.3 µm (micrometres) in diameter and no airborne particles of a size greater than 0.3 µm (micrometres) in diameter, or (d) not more than 10 airborne particles of a size less than or equal to 0.5 µm (micrometres) in diameter and no airborne particles of a size greater than 0.5 µm (micrometres) in diameter.

110(1) Subparagraph 3100(1)(b)(i) of the Regulations is replaced by the following: (i) as a form of assistance from a government, municipality or other public authority, whether as a grant, a subsidy, a forgivable loan, a deduction from tax (other than an amount described in clause (b)(i)(B) of the definition tax shelter in subsection 237.1(1) of the Act) or an investment allowance, or as any other form of assistance, other than an excluded loan as defined in subsection 12(11) of the Act , or (2) Subsection 3100(3) of the Regulations is amended by striking out “or” at the end of paragraph (b), by adding “or” at the end of paragraph (c) and by adding the following after paragraph (c): (d) where the amount is an excluded loan as defined in subsection 12(11) of the Act. (3) Subsections (1) and (2) are deemed to have come into force on January 1, 2022.

111(1) Section 5700 of the Regulations is amended by striking out “and” at the end of paragraph (z.3), by adding “and” at the end of paragraph (z.4) and by adding the following after paragraph (z.4): (z.5) navigation device for low vision for an individual who has a vision impairment. (2) Subsection (1) applies to the 2024 and subsequent taxation years.

112(1) Subparagraph (iii) of the description of A in the definition exempt surplus in subsection 5907(1) of the Regulations is replaced by the following: (iii) the portion of any dividend received in the period and before the particular time by the subject affiliate from another foreign affiliate of the corporation (including, for greater certainty, any dividend deemed under subsection 5905(7) to have been received by the subject affiliate) that was prescribed under paragraph 5900(1)(a) to have been paid out of the payer affiliate’s exempt surplus in respect of the corporation to the extent that it (A) does not give rise to the application of subsection 12.7(3) of the Act in computing the foreign accrual property income of a foreign affiliate of a taxpayer, and (B) is excluded in computing the subject affiliate’s foreign accrual property income because of subparagraph (b)(i) or (ii) of the description of A, or because an amount is determined for H, in the definition foreign accrual property income in subsection 95(1) of the Act, (2) Subparagraph (iv) of the description of A in the definition hybrid surplus in subsection 5907(1) of the Regulations is replaced by the following: (iv) the portion of any dividend received in the period and before the particular time by the subject affiliate from another foreign affiliate of the corporation (including, for greater certainty, any dividend deemed under subsection 5905(7) to have been received by the subject affiliate) that was prescribed under paragraph 5900(1)(a.1) to have been paid out of the payer affiliate’s hybrid surplus in respect of the corporation to the extent that it (A) does not give rise to the application of subsection 12.7(3) of the Act in computing the foreign accrual property income of a foreign affiliate of a taxpayer, and (B) is excluded in computing the subject affiliate’s foreign accrual property income because of subparagraph (b)(i) or (ii) of the description of A, or because an amount is determined for H, in the definition foreign accrual property income in subsection 95(1) of the Act, or (3) Subparagraph (iii) of the description of A in the definition hybrid underlying tax in subsection 5907(1) of the Regulations is replaced by the following: (iii) the total of all amounts each of which is an amount determined by the formula C × D ÷ E where C is the amount that was prescribed under paragraph 5900(1)(c.1) to have been the foreign tax applicable to the portion ( referred to in this subparagraph as the “relevant portion” ) of a dividend received in the period and before the particular time by the subject affiliate from another foreign affiliate of the corporation (including, for greater certainty, a dividend deemed under subsection 5905(7) to have been received by the subject affiliate) that was prescribed under paragraph 5900(1)(a.1) to have been paid out of the payer affiliate’s hybrid surplus in respect of the corporation, D is the amount included under subparagraph (iv) of the description of A in the definition hybrid surplus , in respect of the relevant portion of the dividend received, in computing the subject affiliate’s hybrid surplus, and E is the relevant portion of the dividend received, or (4) Subparagraph (iii) of the description of A in the definition taxable surplus in subsection 5907(1) of the Regulations is replaced by the following: (iii) the portion of any dividend received in the period and before the particular time by the subject affiliate from another foreign affiliate of the corporation (including, for greater certainty, any dividend deemed under subsection 5905(7) to have been received by the subject affiliate) that was prescribed under paragraph 5900(1)(b) to have been paid out of the payer affiliate’s taxable surplus in respect of the corporation to the extent that it (A) does not give rise to the application of subsection 12.7(3) of the Act in computing the foreign accrual property income of a foreign affiliate of a taxpayer, and (B) is excluded in computing the subject affiliate’s foreign accrual property income because of subparagraph (b)(i) or (ii) of the description of A, or because an amount is determined for H, in the definition foreign accrual property income in subsection 95(1) of the Act, (5) Subparagraph (iv) of the description of A in the definition underlying foreign tax in subsection 5907(1) of the Regulations is replaced by the following: (iv) the total of all amounts each of which is an amount determined by the formula C × D ÷ E where C is the amount that was prescribed under paragraph 5900(1)(d) to have been the foreign tax applicable to the portion ( referred to in this subparagraph as the “relevant portion” ) of a dividend received in the period and before the particular time by the subject affiliate from another foreign affiliate of the corporation (including, for greater certainty, a dividend deemed under subsection 5905(7) to have been received by the subject affiliate) that was prescribed under paragraph 5900(1)(b) to have been paid out of the payer affiliate’s taxable surplus in respect of the corporation, D is the amount included under subparagraph (iii) of the description of A in the definition taxable surplus , in respect of the relevant portion of the dividend received, in computing the subject affiliate’s taxable surplus, and E is the relevant portion of the dividend received, or (6) Subsections (1) to (5) apply in respect of any dividend received on or after July 1, 2024.

113(1) The portion of section 8201 of the Regulations before paragraph (a) is replaced by the following: 8201 For the purposes of subsection 16.1(1), the definition outstanding debts to specified non-residents in subsection 18(5), subsections 100(1.3), 112(2), 125.4(1) and 125.5(1), the definition taxable supplier in subsection 127(9), subparagraph 128.1(4)(b)(ii), paragraphs 181.3(5)(a) and 190.14(2)(b), section 233.8, the definition Canadian banking business in subsection 248(1) and paragraph 260(5)(a) of the Act, a permanent establishment of a person or partnership (either of whom is referred to in this section as the “person”) means a fixed place of business of the person, including an office, a branch, a mine, an oil well, a farm, a timberland, a factory, a workshop or a warehouse if the person has a fixed place of business and, where the person does not have any fixed place of business, the principal place at which the person’s business is conducted, and

114(1) Section 8517 of the Regulations is amended by adding the following after subsection (7): (8) For the purposes of this section, if subsection 147.4(5) of the Act deems an amount to be transferred under a defined benefit provision (as defined in subsection 147.1(1) of the Act) of a registered pension plan, the benefits payable under the annuity contract are deemed to be benefits payable under the provision. (2) Subsection (1) is deemed to have come into force on January 1, 2018.

115(1) Section 9002 of the Regulations is amended by adding the following after subsection (3): (4) For the purpose of subsection (3), if a partnership, at a particular time, owns or holds shares of a corporation (or is deemed under this subsection to own or hold shares of a corporation) that have a fair market value of at least 50% of all the issued shares of the corporation, (a) the partnership is deemed not to exist at that time; and (b) each member of the partnership is deemed to own or hold at that time that proportion of shares of any class of the capital stock of the corporation that are property of the partnership at that time, that the fair market value of the member’s interest in the partnership is of the fair market value of all interests in the partnership at that time. (5) For the purpose of paragraph (3)(b), a subsidiary wholly-owned corporation of a credit union is deemed to be a credit union. (2) Subsection (1) applies to taxation years that begin after 2023.

116(1) The portion of paragraph (a) of Class 43.1 in Schedule II to the Regulations after subparagraph (v) is replaced by the following: other than buildings or other structures, heat rejection equipment (such as condensers and cooling water systems), transmission equipment, distribution equipment, fuel handling equipment that is not used to upgrade the combustible portion of the fuel, pollution abatement equipment and fuel storage facilities, (2) Clause (d)(ii)(B) of Class 43.1 in Schedule II to the Regulations is replaced by the following: (B) is the electrical generating equipment and plant (including structures) of that producer including a canal, a dam, a dyke, an overflow spillway, a penstock, a powerhouse (complete with electrical generating equipment and other ancillary equipment), control equipment, fishways or fish bypasses, and eligible transmission equipment, (3) Subparagraph (d)(iv) of Class 43.1 in Schedule II to the Regulations is replaced by the following: (iv) heat recovery equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of conserving energy, reducing the requirement to acquire energy or extracting heat for sale, by extracting for reuse thermal waste that is generated directly in an industrial process (other than an industrial process that generates or processes electrical energy), including such equipment that consists of heat exchange equipment, compressors used to upgrade low pressure steam, vapour or gas, waste heat boilers and other ancillary equipment such as control panels, fans, instruments or pumps, but not including property that is employed in re-using the recovered heat (such as property that is part of the internal heating or cooling system of a building or electrical generating equipment), is pollution abatement equipment , or is a building, (4) Subclause (d)(v)(B)(IV) of Class 43.1 in Schedule II to the Regulations is replaced by the following: (IV) eligible transmission equipment, (5) The portion of subparagraph (d)(vi) of Class 43.1 in Schedule II to the Regulations before clause (A) is replaced by the following: (vi) fixed location photovoltaic equipment that is used by the taxpayer, or a lessee of the taxpayer, primarily for the purpose of generating electrical energy from solar energy if the equipment consists of solar cells or modules and related equipment including inverters, control and conditioning equipment, support structures and eligible transmission equipment, but not including (6) Subparagraph (d)(vii) of Class 43.1 in Schedule II to the Regulations is replaced by the following: (vii) equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of generating electrical energy or heat energy, or both electrical and heat energy, solely from geothermal energy, including such equipment that consists of piping (including above or below ground piping and the cost of completing a well (including the wellhead and production string), or trenching, for the purpose of installing that piping), pumps, heat exchangers, steam separators, electrical generating equipment, eligible transmission equipment and ancillary equipment used to collect the geothermal heat, but not including buildings, distribution equipment, equipment described in subclause (i)(A)(II), property otherwise included in Class 10 and property that would be included in Class 17 if that Class were read without reference to its paragraph (a.1), (7) Subparagraph (d)(viii) of Class 43.1 in Schedule II to the Regulations is replaced by the following: (viii) equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of collecting landfill gas or digester gas, including such equipment that consists of piping (including above or below ground piping and the cost of drilling a well, or trenching, for the purpose of installing that piping), fans, compressors, storage tanks, heat exchangers and related equipment used to collect gas, to remove non-combustibles and contaminants from the gas or to store the gas, but not including pollution abatement equipment and property otherwise included in Class 10 or 17, (8) Clause (d)(ix)(D) of Class 43.1 in Schedule II to the Regulations is amended by striking out “and” at the end of subclause (V), by adding “and” at the end of subclause (VI) and by adding the following after subclause (VI): (VII) pollution abatement equipment, (9) Subparagraph (d)(xi) of Class 43.1 in Schedule II to the Regulations is amended by striking out “and” at the end of clause (E), by adding “and” at the end of clause (F) and by adding the following after clause (F): (G) pollution abatement equipment, (10) Subparagraph (d)(xiii) of Class 43.1 in Schedule II to the Regulations is amended by striking out “and” at the end of clause (C), by adding “and” at the end of clause (D) and by adding the following after clause (D): (E) pollution abatement equipment, (11) Subparagraph (d)(xiv) of Class 43.1 in Schedule II to the Regulations is replaced by the following: (xiv) property that is used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of generating electricity using kinetic energy of flowing water or wave or tidal energy, including support structures, control and conditioning equipment, submerged cables and eligible transmission equipment, but not including buildings, distribution equipment, auxiliary electricity generating equipment, property otherwise included in Class 10 and property that would be included in Class 17 if that class were read without reference to its subparagraph (a.1)(i), (12) Subparagraph (d)(xiv) of Class 43.1 in Schedule II to the Regulations, as enacted by subsection (11), is replaced by the following: (xiv) fixed location property that is used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of generating electricity using kinetic energy of flowing water or wave or tidal energy, including support structures, control and conditioning equipment, submerged cables and eligible transmission equipment, but not including buildings, distribution equipment, auxiliary electricity generating equipment, property otherwise included in Class 10 and property that would be included in Class 17 if that class were read without reference to its subparagraph (a.1)(i), (13) Clause (d)(xvi)(D) of Class 43.1 in Schedule II to the Regulations is amended by striking out “and” at the end of subclause (III), by adding “and” at the end of subclause (IV) and by adding the following after subclause (IV): (V) pollution abatement equipment, (14) Subclause (d)(xviii)(A)(II) of Class 43.1 in Schedule II to the Regulations is replaced by the following: (II) not including buildings, pumped hydroelectric storage, hydro electric dams and reservoirs, property used solely for backup electrical energy, batteries used in vehicles or other automotive equipment, property used to charge vehicles or other automotive equipment , fuel cell systems where the hydrogen is produced via steam reformation of methane and property otherwise included in Class 10 or 17, and (15) The portion of subparagraph (d)(xix) of Class 43.1 in Schedule II to the Regulations before clause (A) is replaced by the following: (xix) a pumped hydroelectric energy storage installation all or substantially all of the use of which by the taxpayer, or by a lessee of the taxpayer, is to store and discharge electrical energy including reversing turbines, eligible transmission equipment, dams, reservoirs and related structures, and that meets the condition in either subclause (d)(xviii)(B)(I) or (II) in this Class, but not including (16) Subparagraph (d)(xx) of Class 43.1 in Schedule II to the Regulations is amended by striking out “and” at the end of clause (C), by adding “and” at the end of clause (D) and by adding the following after clause (D): (E) pollution abatement equipment, (17) Subsections (2), (4) to (6), (11), (14) and (15) apply to property that is acquired and becomes available for use on or after November 17, 2025.

117(1) The portion of Class 56 in Schedule II to the Regulations after the heading “CLASS 56” and before paragraph (a) is replaced by the following: Property that is acquired, and becomes available for use, by a taxpayer after March 1, 2020 and before 2034 , if the property (2) Paragraph (b) of Class 56 in Schedule II to the Regulations is replaced by the following: (b) would be accelerated investment incentive property or reaccelerated investment incentive property of the taxpayer if subsections 1104(4) and (4.01) were read without their exclusions for property included in Class 56. (3) Subsections (1) and (2) are deemed to have come into force on January 1, 2025.

118(1) The portion of paragraph (a) of Class 57 in Schedule II to the Regulations before clause (i)(A) is replaced by the following: (a) equipment, other than excluded CCUS equipment , that (i) is to be used solely for capturing carbon dioxide (2) Paragraph (g) of Class 57 in Schedule II to the Regulations is replaced by the following: (g) property that is (i) incorporated into another property that would not otherwise be described in any of paragraphs (a) to (f) if the incorporation causes the other property to satisfy the description in any of paragraphs (a) to (f), or (ii) used solely to refurbish property described in any of paragraphs (a) to (f) that is part of a CCUS project of the taxpayer. (3) Subsections (1) and (2) are deemed to have come into force on January 1, 2022.

119(1) Paragraph (e) of Class 58 in Schedule II to the Regulations is replaced by the following: (e) property that is (i) incorporated into another property that would not otherwise be described in any of paragraphs (a) to (d) if the incorporation causes the other property to satisfy the description in any of paragraphs (a) to (d), or (ii) used solely to refurbish property described in any of paragraphs (a) to (d) that is part of a CCUS project of the taxpayer. (2) Subsection (1) is deemed to have come into force on January 1, 2022.

120(1) Paragraph 1(a) of Schedule IV to the Regulations is amended by striking out “and” at the end of subparagraph (i) and by adding the following after that subparagraph: (i.1) if the property is a reaccelerated investment incentive property acquired in the year, (A) if the property is acquired before 2030, 1.5 times an amount computed on the basis of a rate per cord, board foot or cubic metre cut in the taxation year, and (B) if the property is acquired after 2029, 1.25 times an amount computed on the basis of a rate per cord, board foot or cubic metre cut in the taxation year, and (2) Subsection (1) is deemed to have come into force on January 1, 2025.

121(1) Paragraphs (a) and (b) of the description of A in section 2 of Schedule V to the Regulations are replaced by the following: (a) 1.5, if the property is an accelerated investment incentive property acquired before 2024 or a reaccelerated investment incentive property acquired before 2030 , (b) 1.25, if the property is an accelerated investment incentive property acquired after 2023 or a reaccelerated investment incentive property acquired after 2029 , and (2) Subsection (1) is deemed to have come into force on January 1, 2025.

122(1) Paragraphs (a) and (b) of the description of A in section 2 of Schedule VI to the Regulations are replaced by the following: (a) 1.5, if the property is an accelerated investment incentive property acquired before 2024 or a reaccelerated investment incentive property acquired before 2030 , (b) 1.25, if the property is an accelerated investment incentive property acquired after 2023 or a reaccelerated investment incentive property acquired after 2029 , and (2) Subsection (1) is deemed to have come into force on January 1, 2025.

123(1) The French version of the Regulations is amended by replacing “troisième” with “quatrième” in the following provisions: (a) subparagraph 1100(1)(ta)(v) and subclause 1100(1)(v)(iv)(B)(II); (b) paragraph 1100(2.02)(b); (c) paragraph 1100(2.2)(h); and (d) subsection 1100(2.3). (2) Subsection (1) is deemed to have come into force on January 1, 2025.

124Any amount payable by the Minister of National Revenue in relation to the application of subsection 127.491(2) of the Income Tax Act is to be paid out of the Consolidated Revenue Fund.

125If Bill C-4, introduced in the 1st session of the 45th Parliament and entitled the Making Life More Affordable for Canadians Act , receives royal assent, then (a) section 118 of the Income Tax Act is amended by adding the following after subsection (10): Top-up tax credit (11) For the purpose of computing the tax payable under this Part by an individual for a taxation year that is after 2024 and before 2031, there may be deducted the amount determined by the formula (A − B × C) × D where A is the amount determined by the formula E + F where E is the total of all amounts each of which is an amount deducted by the individual in computing the individual’s tax payable for the year under this Part under any of subsections (1), (2), (3) and (10) or any of sections 118.01, 118.041, 118.05, 118.06, 118.07, 118.2, 118.3, 118.5, 118.61, 118.62, 118.7, 118.8 and 118.9, and F is the lesser of (a) the amount deducted by the individual in computing the individual’s tax payable for the year under this Part under section 118.1, and (b) $200 multiplied by the appropriate percentage for the year; B is the appropriate percentage for the year; C is the first dollar amount for the year referred to in paragraph 117(2)(b); and D is, (a) if the taxation year is 2025, 3.45%, and (b) in any other case, 7.14%. (b) the description of C in subsection 118.61(1) of the Income Tax Act is replaced by the following: C is the lesser of the value of B and the amount that would be the individual’s tax payable under this Part for the year if no amount were deductible under this Division (other than an amount deductible under this section and any of subsections 118(1) to (10) and sections 118.01 to 118.07, 118.3 and 118.7); (c) paragraph 118.61(2)(b) of the Income Tax Act is replaced by the following: (b) the amount that would be the individual’s tax payable under this Part for the year if no amount were deductible under this Division (other than an amount deductible under this section and any of subsections 118(1) to (10) and sections 118.01 to 118.07, 118.3 and 118.7). (d) subsection 118(11) of the Income Tax Act , as enacted by paragraph (a), is deemed to have come into force on January 1, 2025; (e) the description of C in subsection 118.61(1) of the Income Tax Act , as enacted by paragraph (b), is deemed to have come into force on January 1, 2025; and (f) paragraph 118.61(2)(b) of the Income Tax Act , as enacted by paragraph (c), is deemed to have come into force on January 1, 2025.

126(1) The Digital Services Tax Act , section 96 of chapter 15 of the Statutes of Canada, 2024, is repealed. (2) Subsection (1) is deemed to have come into force on June 20, 2024.

127(1) The Digital Services Tax Regulations , section 97 of chapter 15 of the Statutes of Canada, 2024, are repealed. (2) Subsection (1) is deemed to have come into force on June 20, 2024.

128(1) If a person has, before the day on which this Act receives royal assent, paid an amount to His Majesty in right of Canada and the amount, in the absence of section 126 , would have been taken into account by His Majesty in right of Canada as tax, a penalty, interest or other amount under the Digital Services Tax Act , the Minister of National Revenue must refund to the person the amount, together with interest on the amount at the rate determined under paragraph 2(1)(a) of the Interest Rates (Excise Act, 2001) Regulations , for the period beginning on the day on which the amount was received by the Receiver General for Canada and ending on the day on which the refund is paid. (2) Any refund payable by the Minister of National Revenue under subsection (1) is to be paid out of the Consolidated Revenue Fund.

129Schedule II to the Access to Information Act is amended by striking out the reference to Digital Services Tax Act Loi sur la taxe sur les services numériques and the corresponding reference to “section 108”.

130Subsection 149(3) of the Bankruptcy and Insolvency Act is amended by adding “and” at the end of paragraph (i) and by repealing paragraph (j).

131Paragraph 462.48(2)(c) of the Criminal Code is replaced by the following: (c) the type of information or book, record, writing, return or other document obtained by or on behalf of the Minister of National Revenue for the purposes of Part IX of the Excise Tax Act , the Income Tax Act , the Excise Act, 2001 , the Underused Housing Tax Act , the Select Luxury Items Tax Act or the Global Minimum Tax Act to which access is sought or that is proposed to be examined or communicated; and

132Section 77 of the Excise Tax Act is replaced by the following: 77 A refund shall not be paid, and a credit shall not be allowed, to a person under this Act until the person has filed with the Minister all returns and other records of which the Minister has knowledge that are required to be filed under the Excise Tax Act , the Income Tax Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , the Underused Housing Tax Act , the Select Luxury Items Tax Act and the Global Minimum Tax Act .

133Subsection 229(2) of the Act is replaced by the following: (2) A net tax refund for a reporting period of a person shall not be paid to the person under subsection (1) at any time unless all returns of which the Minister has knowledge and that are required to be filed at or before that time by the person under this Act, the Income Tax Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , the Underused Housing Tax Act , the Select Luxury Items Tax Act and the Global Minimum Tax Act have been filed with the Minister.

134Subsection 230(2) of the Act is replaced by the following: (2) An amount paid on account of net tax for a reporting period of a person shall not be refunded to the person under subsection (1) at any time unless all returns of which the Minister has knowledge and that are required to be filed at or before that time by the person under this Act, the Income Tax Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , the Underused Housing Tax Act , the Select Luxury Items Tax Act and the Global Minimum Tax Act have been filed with the Minister.

135Subparagraph 238.1(2)(c)(iii) of the Act is replaced by the following: (iii) all amounts required under this Act (other than this Part), sections 21 and 33 of the Canada Pension Plan , the Excise Act , the Customs Act , the Income Tax Act , section 82 and Part VII of the Employment Insurance Act , the Customs Tariff , the Excise Act, 2001 , the Underused Housing Tax Act , the Select Luxury Items Tax Act and the Global Minimum Tax Act to be remitted or paid before that time by the registrant have been remitted or paid, and

136Section 263.02 of the Act is replaced by the following: 263.02 A rebate under this Part shall not be paid to a person at any time unless all returns of which the Minister has knowledge and that are required to be filed at or before that time by the person under this Act, the Income Tax Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , the Underused Housing Tax Act , the Select Luxury Items Tax Act and the Global Minimum Tax Act have been filed with the Minister.

137Subsection 296(7) of the Act is replaced by the following: (7) An amount under this section shall not be refunded to a person at any time unless all returns of which the Minister has knowledge and that are required to be filed at or before that time by the person under this Act, the Income Tax Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , the Underused Housing Tax Act , the Select Luxury Items Tax Act and the Global Minimum Tax Act have been filed with the Minister.

138Paragraph 24.3(2)(c) of the Export Development Act is replaced by the following: (c) to the Minister of National Revenue solely for the purpose of administering or enforcing the Excise Tax Act , the Income Tax Act , the Select Luxury Items Tax Act or the Global Minimum Tax Act ; or

139Paragraph 155.2(6)(c) of the Financial Administration Act is replaced by the following: (c) an amount owing by a person to His Majesty in right of Canada, or payable by the Minister of National Revenue to any person, under the Excise Tax Act , the Income Tax Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , the Softwood Lumber Products Export Charge Act, 2006 , the Underused Housing Tax Act , the Select Luxury Items Tax Act or the Global Minimum Tax Act .

140(1) Subsection 12(1) of the Tax Court of Canada Act is replaced by the following: 12 (1) The Court has exclusive original jurisdiction to hear and determine references and appeals to the Court on matters arising under the Canada Pension Plan , the Cultural Property Export and Import Act , Part IX of the Excise Tax Act , the Old Age Security Act , the Petroleum and Gas Revenue Tax Act , Part V.1 of the Customs Act , the Income Tax Act , the Employment Insurance Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , the Softwood Lumber Products Export Charge Act, 2006 , the Disability Tax Credit Promoters Restrictions Act , Part 1 of the Greenhouse Gas Pollution Pricing Act , the Underused Housing Tax Act , the Select Luxury Items Tax Act and the Global Minimum Tax Act when references or appeals to the Court are provided for in those Acts.

141Paragraph 18.29(3)(a) of the Act is amended by adding “or” at the end of subparagraph (ix), by replacing “or” with “and” at the end of subparagraph (x) and by repealing subparagraph (xi).

142Subsection 18.31(2) of the Act is replaced by the following: (2) If it is agreed under section 310 of the Excise Tax Act , section 97.58 of the Customs Act , section 51 of the Air Travellers Security Act , section 204 of the Excise Act, 2001 , section 62 of the Softwood Lumber Products Export Act, 2006 , section 121 of the Greenhouse Gas Pollution Pricing Act , section 45 of the Underused Housing Tax Act , section 105 of the Select Luxury Items Tax Act or section 95 of the Global Minimum Tax Act that a question should be determined by the Court, sections 17.1, 17.2 and 17.4 to 17.8 apply, with any modifications that the circumstances require, in respect of the determination of the question.

143Subsection 18.32(2) of the Act is replaced by the following: (2) If an application has been made under section 311 of the Excise Tax Act , section 52 of the Air Travellers Security Charge Act , section 205 of the Excise Act, 2001 , section 63 of the Softwood Lumber Products Export Charge Act, 2006 , section 122 of the Greenhouse Gas Pollution Pricing Act , section 46 of the Underused Housing Tax Act , section 106 of the Select Luxury Items Tax Act or section 96 of the Global Minimum Tax Act for the determination of a question, the application or determination of the question must, subject to section 18.33, be determined in accordance with sections 17.1, 17.2 and 17.4 to 17.8, with any modifications that the circumstances require.

144Paragraph 18(1)(t) of the Income Tax Act is amended by adding “or” at the end of subparagraph (v) and by repealing subparagraph (vi).

145Subsection 164(2.01) of the Act is replaced by the following: (2.01) The Minister shall not, in respect of a taxpayer, refund, repay, apply to other debts or set-off amounts under this Act at any time unless all returns of which the Minister has knowledge and that are required to be filed by the taxpayer at or before that time under this Act, the Excise Tax Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , the Underused Housing Tax Act , the Select Luxury Items Tax Act and the Global Minimum Tax Act have been filed with the Minister.

146The portion of subsection 221.2(2) of the Act before paragraph (a) is replaced by the following: (2) If a particular amount was appropriated to an amount (in this section referred to as the “debt”) that is or may become payable by a person under this Act, the Excise Tax Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , the Underused Housing Tax Act , the Select Luxury Items Tax Act or the Global Minimum Tax Act , the Minister may, on application by the person, appropriate the particular amount, or a part of it, to another amount that is or may become payable under any of those Acts and, for the purposes of any of those Acts,

147Paragraph (a) of the definition program legislation in section 2 of the Canada Revenue Agency Act is amended by adding “and” at the end of subparagraph (x) and by repealing subparagraph (xi).

148Subsection 40(4) of the Air Travellers Security Charge Act is replaced by the following: (4) A refund shall not be paid until the person has filed with the Minister all returns and other records of which the Minister has knowledge that are required to be filed under this Act, the Excise Tax Act , the Income Tax Act , the Excise Act, 2001 , the Underused Housing Tax Act , the Select Luxury Items Tax Act and the Global Minimum Tax Act .

149(1) Paragraph 188(6)(a) of the Excise Act, 2001 is replaced by the following: (a) the Minister under this Act, the Excise Act , the Excise Tax Act , the Income Tax Act , the Air Travellers Security Charge Act , the Underused Housing Tax Act , the Select Luxury Items Tax Act and the Global Minimum Tax Act ; or (2) Clause 188(7)(b)(ii)(A) of the Act is replaced by the following: (A) the Minister under this Act, the Excise Act , the Excise Tax Act , the Income Tax Act , the Air Travellers Security Charge Act , the Underused Housing Tax Act , the Select Luxury Items Tax Act and the Global Minimum Tax Act , or

150Subsection 189(4) of the Act is replaced by the following: (4) A refund shall not be paid until the person has filed with the Minister or the Minister of Public Safety and Emergency Preparedness all returns and other records of which the Minister has knowledge and that are required to be filed under this Act, the Excise Act , the Excise Tax Act , the Customs Act , the Income Tax Act , the Air Travellers Security Charge Act , the Underused Housing Tax Act , the Select Luxury Items Tax Act and the Global Minimum Tax Act .

151Section 34 of the Underused Housing Tax Act is replaced by the following: 34 An amount under section 33 is not to be paid to a person by the Minister at any time, unless all returns of which the Minister has knowledge and that are required to be filed at or before that time by the person under this Act, the Excise Tax Act , the Income Tax Act , the Excise Act, 2001 , the Air Travellers Security Charge Act , Part 1 of the Greenhouse Gas Pollution Pricing Act , the Select Luxury Items Tax Act and the Global Minimum Tax Act have been filed with the Minister.

152Section 45 of the Select Luxury Items Tax Act is replaced by the following: 45 A rebate under this Subdivision is not to be paid to a person at any time unless all returns of which the Minister has knowledge and that are required to be filed at or before that time by the person under this Act, the Excise Tax Act , the Income Tax Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , Part 1 of the Greenhouse Gas Pollution Pricing Act , the Underused Housing Tax Act and the Global Minimum Tax Act have been filed with the Minister.

153Section 48 of the Act is replaced by the following: 48 If a trustee is appointed under the Bankruptcy and Insolvency Act to act in the administration of the estate or succession of a bankrupt, a rebate under this Division that the bankrupt was entitled to claim before the appointment must not be paid after the appointment unless all returns required to be filed in respect of the bankrupt under this Act, the Excise Tax Act , the Income Tax Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , Part 1 of the Greenhouse Gas Pollution Pricing Act , the Underused Housing Tax Act and the Global Minimum Tax Act in respect of periods ending before the appointment have been filed and all amounts required to be paid under that Part and those Acts by the bankrupt in respect of those periods have been paid.

154The portion of subsection 53(3) of the Act before the formula is replaced by the following: (3) If, at any time, a person referred to in subsection (1) or (2) fails to give or maintain security in an amount satisfactory to the Minister, the Minister may retain as security, out of any amount that may be or may become payable to the person under this Act, the Excise Tax Act , the Excise Act, 2001 , Part 1 of the Greenhouse Gas Pollution Pricing Act , the Underused Housing Tax Act or the Global Minimum Tax Act , an amount not exceeding the amount determined by the formula

155Subsection 57(6) of the Act is replaced by the following: (6) A rebate under subsection (4) is not to be paid to a person at any time unless all returns of which the Minister has knowledge and that are required to be filed at or before that time by the person under this Act, the Excise Tax Act , the Income Tax Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , Part 1 of the Greenhouse Gas Pollution Pricing Act , the Underused Housing Tax Act and the Global Minimum Tax Act have been filed with the Minister.

156Section 94 of the Act is replaced by the following: 94 An amount under section 92 or 93 is not to be paid to a person by the Minister at any time, unless all returns of which the Minister has knowledge and that are required to be filed at or before that time by the person under this Act, the Excise Tax Act , the Income Tax Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , Part 1 of the Greenhouse Gas Pollution Pricing Act , the Underused Housing Tax Act and the Global Minimum Tax Act have been filed with the Minister.

157The description of B in paragraph 67(2)(a) of the Global Minimum Tax Act is replaced by the following: B is the total of all amounts, if any, the transferee was assessed under paragraph 97.44(1)(b) of the Customs Act , subsection 325(2) of the Excise Tax Act , subsection 160(2) of the Income Tax Act , subsection 297(3) of the Excise Act, 2001 , subsection 161(1) of the Greenhouse Gas Pollution Pricing Act , subsection 80(3) of the Underused Housing Tax Act or subsection 150(4) of the Select Luxury Items Tax Act in respect of the property, and

158Section 77 of the Act is replaced by the following: 77 The Minister must not, in respect of a person, refund, repay, apply to other debts or set off amounts under this Act until the person has filed with the Minister all returns and other records of which the Minister has knowledge that are required to be filed under this Act, the Income Tax Act , the Excise Tax Act , the Excise Act, 2001 , the Air Travellers Security Charge Act , the Greenhouse Gas Pollution Pricing Act , the Underused Housing Tax Act and the Select Luxury Items Tax Act .

159(1) The portion of subsection 181(5) of the Excise Tax Act before paragraph (a) is replaced by the following: (5) For the purposes of this Part, if , in full or partial consideration for a taxable supply of property or a service, a supplier that is a registrant accepts a coupon that may be exchanged for the property or service or that entitles the recipient of the supply to a reduction of, or a discount on, the price of the property or service and a particular person at any time pays, exclusively in the course of commercial activities of the particular person, an amount to the supplier for the redemption of the coupon, the following rules apply: (2) Section 181 of the Act is amended by adding the following after subsection (5): Redemption – commercial activities (6) For the purposes of subsection (5), a payment is made by a person exclusively in the course of commercial activities of the person only if (a) the person is not a financial institution and all or substantially all of the activities in the course of which the payment is made are commercial activities; or (b) the person is a financial institution and all of the activities in the course of which the payment is made are commercial activities. (3) Subsections (1) and (2) are deemed to have come into force on August 16, 2025. They also apply in respect of any payment made by a person before August 16, 2025 to a supplier for the redemption of a coupon if the person has not claimed an input tax credit in respect of the payment in a return under Division V of Part IX of the Act that is filed before August 16, 2025.

160(1) Subsection 191(9) of the Act is replaced by the following: (9) For the purposes of this section, subsection 256.2(3.1) and the Real Property (GST/HST) Regulations , the construction or substantial renovation of a multiple unit residential complex or a condominium complex, or the construction of an addition to a multiple unit residential complex, shall be deemed to be substantially completed not later than the day all or substantially all of the residential units in the complex or addition are occupied after the construction or substantial renovation is begun. (2) Subsection (1) is deemed to have come into force on September 14, 2023.

161(1) Section 256.2 of the Act is amended by adding the following after subsection (2): (2.01) For the purposes of applying this section and the Real Property (GST/HST) Regulations (other than prescribed provisions) in respect of a taxable supply of property that is a residential complex or an addition to a residential complex, if the taxable supply and the property meet the conditions described in paragraph (3.1)(a) or (b), clause (a)(iii)(A) of the definition qualifying residential unit in subsection (1) is to be read as follows: (A) as the primary place of residence of the person or a relation of the person, or of a lessor of the complex or a relation of that lessor, for a period of at least one year or for a shorter period where the next use of the unit after that shorter period is as described in clause (B), (A.1) if the person is a university that is established and operated otherwise than for profit, a public college that is established and operated otherwise than for profit or a school authority that is established and operated otherwise than for profit, as a place of residence for students attending the university, the public college or a school of the school authority, or (2) The portion of subsection 256.2(3) of the Act after paragraph (d) and before the first formula in that subsection is replaced by the following: the Minister shall, subject to subsections (3.1) to (3.4) , (7) and (8), pay a rebate to the person equal to the total of all amounts each of which is an amount, in respect of a residential unit that forms part of the residential complex or addition, as the case may be, and is a qualifying residential unit of the person at the particular time, determined by the formula (3) The description of B in subsection 256.2(3.2) of the Act is replaced by the following: B is the unit’s percentage of total floor space. (4) Section 256.2 of the Act is amended by adding the following after subsection (3.2): Purpose-built rental housing – student residence (3.3) The rules set out in subsection (3.4) apply in respect of the construction or substantial renovation of a residential complex or an addition to a multiple unit residential complex if the following conditions are met: (a) the builder of the residential complex or addition is a university, a public college or a school authority; (b) the construction or substantial renovation of the residential complex or addition is carried out primarily for the purpose of providing a place of residence for students attending the university, the public college or a school of the school authority; (c) the builder would, in the absence of subsection 191(6), be deemed under section 191 to have made and received, at a particular time, a taxable supply by way of sale of the residential complex or addition; and (d) in respect of the taxable supply referred to in paragraph (c) that would, in the absence of subsection 191(6), be deemed under section 191 to have been made and received by the builder, it is the case that (i) the residential complex or addition is property prescribed for the purposes of subsection (3.1), determined as if the deemed purchase referred to in subparagraph (3)(a)(ii) were the taxable supply and the particular time referred to in paragraph (3)(b) were the particular time referred to in paragraph (c), and (ii) the taxable supply and the residential complex or addition meet the conditions prescribed for the purposes of subsection (3.1) and the conditions described in paragraph (3.1)(a) or (b). Amount of rebate – student residence (3.4) If the conditions set out in subsection (3.3) are met in respect of the construction or substantial renovation of a residential complex or an addition to a multiple unit residential complex, for the purposes of applying subsection (3) in respect of the construction or substantial renovation of the residential complex or addition, the following rules apply: (a) the conditions in subparagraph (3)(a)(ii) and paragraphs (3)(b) to (d) are deemed to be met at the particular time referred to in paragraph (3.3)(c); (b) the deemed purchase referred to in subparagraph (3)(a)(ii) is deemed to be the taxable supply referred to in paragraph (3.3)(c) that would, in the absence of subsection 191(6), be deemed under section 191 to have been made and received by the builder of the residential complex or addition; (c) the particular time referred to in paragraph (3)(b) is deemed to be the particular time referred to in paragraph (3.3)(c); and (d) despite subsections (3.1) and (3.2), the amount of the rebate under subsection (3) in respect of the construction or substantial renovation of the residential complex or addition is equal to the amount determined as if the first formula in subsection (3) and the descriptions for that formula were read as follows: A × B where A is the amount that, in the absence of subsection 191(6), the person would have been entitled to claim under section 193 or 257 in respect of the deemed purchase of the residential complex or addition determined as if the references in section 193 or 257, as the case may be, to “basic tax content” were read as references to “ qualifying portion of basic tax content (as defined in subsection 256.2(1))”, and B is the unit’s percentage of total floor space. (5) Paragraph 256.2(7)(a) of the Act is amended by striking out “and” at the end of subparagraph (ii) and by adding the following after that subparagraph: (ii.1) in the case of a rebate under subsection (3), the amount of which is determined under subsection (3.4), in respect of the construction or substantial renovation of a residential complex or an addition to a multiple unit residential complex, the end of the month that includes the particular time referred to in paragraph (3.3)(c) in respect of the construction or renovation of the residential complex or addition, and (6) Subsections (1) to (5) are deemed to have come into force on September 14, 2023. (7) If a person is, or would be in the absence of paragraph 256.2(7)(a) of the Act (as amended by subsection (5)), entitled to a rebate under subsection 256.2(3) of the Act (as amended by subsection (2)) in respect of the construction or substantial renovation of a residential complex or an addition to a multiple unit residential complex, if the construction or renovation is substantially completed before the day on which this Act receives royal assent and if the amount of the rebate is determined under subsection 256.2(3.4) of the Act (as enacted by subsection (4)), the rebate may, despite paragraph 256.2(7)(a) of the Act (as amended by subsection (5)), be paid to the person if the person files an application for the rebate before the second anniversary of the day on which this Act receives royal assent. (8) If a person is, or would be in the absence of paragraph 256.2(7)(a) of the Act (as amended by subsection (5)), entitled to a rebate under subsection 256.2(3) of the Act (as amended by subsection (2)) in respect of the construction or substantial renovation of a residential complex or an addition to a multiple unit residential complex, if the construction or renovation is substantially completed before the day on which this Act receives royal assent, if the amount of the rebate is determined under subsection 256.2(3.2) of the Act (as amended by subsection (3)) and if the rebate is in respect of a taxable supply described in subsection 256.2(2.1) of the Act, the rebate may, despite paragraph 256.2(7)(a) of the Act (as amended by subsection (5)), be paid to the person if the person files an application for the rebate before the second anniversary of the day on which this Act receives royal assent.

162(1) The portion of the definition practitioner in section 1 of Part II of Schedule V to the Act before paragraph (b) is replaced by the following: practitioner , in respect of a supply of optometric, chiropractic, physiotherapy, chiropodic, podiatric, audiological, speech-language pathology, occupational therapy, psychological, psychotherapy, counselling therapy, midwifery, dietetic, acupuncture or naturopathic services, means a person who (a) practises the profession of optometry, chiropractic, physiotherapy, chiropody, podiatry, audiology, speech-language pathology, occupational therapy, psychology, psychotherapy, counselling therapy, midwifery, dietetics, acupuncture or naturopathy as a naturopathic doctor, as the case may be, (2) Subsection (1) is deemed to have come into force on November 5, 2025.

163(1) Paragraph 7(f) of Part II of Schedule V to the Act is repealed. (2) Subsection (1) applies to supplies made after June 5, 2025, except that it does not apply to a supply of osteopathic services made after June 5, 2025 but before November 5, 2025 if the supplier did not charge, collect or remit any amount as or on account of tax under Part IX of the Act in respect of the supply.

164(1) The Real Property (GST/HST) Regulations are amended by adding the following after section 3: 3.1 (1) For the purposes of this section and for greater certainty, a share of the capital stock of a corporation includes a share of the capital stock of a cooperative corporation. Total consideration – supply of share (2) For the purposes of this section, the total consideration for a supply to a person of a share in the capital stock of a corporation that confers a right in respect of a residential unit situated in a residential complex is the total of all amounts, each of which is the consideration payable for the supply to the person of the share or an interest in the corporation, the residential complex or the residential unit. Excluded equity housing supply (3) For the purposes of these Regulations, a taxable supply is an excluded equity housing supply of a residential complex if the taxable supply is a supply by way of sale to a corporation of the residential complex, an interest in the residential complex or an addition to the residential complex and it is the case that, in respect of a residential unit situated in the residential complex, (a) the corporation makes a particular supply of a share of the capital stock of the corporation to a particular person; (b) the share confers on the particular person a right to possess the residential unit or a right to enter into an agreement for the supply by the corporation of the residential unit to the particular person by way of a lease that is, or is similar to, an arrangement commonly referred to as a “proprietary lease”; and (c) if the particular person were to make a subsequent supply of the share to the corporation or another person, the total consideration for the subsequent supply would not be prohibited from exceeding the total consideration for the particular supply under the statute by or under which the corporation was incorporated, under the corporation’s charter, articles of association, by-laws or contracts with its shareholders or members or under contracts between its shareholders or members.

165(1) Subsection 4(1) of the Regulations is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b): (c) in any case, the taxable supply is not an excluded equity housing supply of the residential complex. (2) Subsection (1) is deemed to have come into force on September 14, 2023.

166(1) The Regulations are amended by adding the following after section 4: 4.1 For the purposes of subsection 256.2(2.1) of the Act, in respect of a taxable supply of property that is a residential complex, an interest in a residential complex or an addition to a multiple unit residential complex, it is a prescribed condition that the taxable supply is not an excluded equity housing supply of the residential complex.

167The Underused Housing Tax Act is amended by adding the following after section 1: Non-application 1.1 No tax is payable under subsection 6(3) by a person in respect of a residential property for 2025 and subsequent calendar years.

168The Act is amended by adding the following before section 7: 6.1 Despite sections 7 and 10, a person is not required to file a return for a residential property for 2025 and subsequent calendar years.

169(1) The Underused Housing Tax Act , section 10 of chapter 5 of the Statutes of Canada, 2022, is repealed. (2) Subsection (1) comes into force on January 1, 2035.

170(1) The Underused Housing Tax Regulations , section 116 of chapter 19 of the Statutes of Canada, 2022, are repealed. (2) Subsection (1) comes into force on January 1, 2035.

171(1) The Select Luxury Items Tax Act is amended by adding the following after section 1: Non-application 1.1 Despite anything in this Act, tax under Division 2 of Part 1 in respect of a subject aircraft or subject vessel is not payable if, in the absence of this section, the tax would become payable under that Division after November 4, 2025.

172(1) Subsection 50(6) of the Act is replaced by the following: (6) Despite subsection (3), a person is not required to be registered for the purposes of this Act as a vendor in respect of (a) subject aircraft or subject vessels after November 4, 2025; or (b) a type of subject item if the person is a prescribed person. (2) Subsection (1) is deemed to have come into force on November 5, 2025.

173(1) The Act is amended by adding the following after section 52: 52.1 Every registration under this Division in respect of subject aircraft or subject vessels is cancelled on February 1, 2028.

174(1) Section 55 of the Act is amended by adding the following after subsection (3): (3.1) Despite subsection (1), a return for a reporting period of a person that begins after December 2025 is not required to be filed if (a) the person is registered under this Division as a vendor in respect of subject aircraft or subject vessels; (b) the person is neither registered nor required to be registered under this Division as a vendor in respect of subject vehicles; and (c) no tax becomes payable by the person during the reporting period. (2) Subsection 55(3.1) of the Act, as enacted by subsection (1), is repealed. (3) Subsection (1) is deemed to have come into force on November 5, 2025. (4) Subsection (2) comes into force on February 1, 2028.

175The Select Luxury Items Tax Regulations are made as follows: Select Luxury Items Tax Regulations Definition Definition of Act 1 In these Regulations, Act means the Select Luxury Items Tax Act .

2For the purposes of paragraph (g) of the definition subject aircraft in subsection 2(1) of the Act, an aircraft is a prescribed aircraft if ownership of the aircraft is transferred to a purchaser from a vendor by way of sale under an agreement in writing (in this section referred to as the “sale agreement”) and (a) it is the case that (i) the purchaser entered into the sale agreement before 2022, or (ii) the purchaser (A) entered into the sale agreement after 2021, and (B) entered into another agreement in writing before 2022 with the vendor in respect of the aircraft, under which the purchaser (I) paid a deposit in respect of the aircraft to the vendor before 2022, (II) agrees to enter into the sale agreement, and (III) agrees to forfeit the deposit if the purchaser fails to enter into the sale agreement; (b) the sale agreement was entered into between the purchaser and the vendor in the course of the vendor’s business of offering aircraft for sale; (c) the aircraft is delivered or made available in Canada in relation to the sale agreement; (d) possession of the aircraft is transferred to the purchaser under the sale agreement at a particular time; (e) the vendor is a registered vendor in respect of subject aircraft at the particular time; and (f) the purchaser is neither registered, nor required to be registered, as a vendor in respect of subject aircraft under Division 5 of Part 1 of the Act at, or at any time before, the particular time.

3For the purposes of paragraph (h) of the definition subject vessel in subsection 2(1) of the Act, a vessel is a prescribed vessel if ownership of the vessel is transferred to a purchaser from a vendor by way of sale under an agreement in writing (in this section referred to as the “sale agreement”) and (a) it is the case that (i) the purchaser entered into the sale agreement before 2022, or (ii) the purchaser (A) entered into the sale agreement after 2021, and (B) entered into another agreement in writing before 2022 with the vendor in respect of the vessel, under which the purchaser (I) paid a deposit in respect of the vessel to the vendor before 2022, (II) agrees to enter into the sale agreement, and (III) agrees to forfeit the deposit if the purchaser fails to enter into the sale agreement; (b) the sale agreement was entered into between the purchaser and the vendor in the course of the vendor’s business of offering vessels for sale; (c) the vessel is delivered or made available in Canada in relation to the sale agreement; (d) possession of the vessel is transferred to the purchaser under the sale agreement at a particular time; (e) the vendor is a registered vendor in respect of subject vessels at the particular time; and (f) the purchaser is neither registered, nor required to be registered, as a vendor in respect of subject vessels under Division 5 of Part 1 of the Act at, or at any time before, the particular time.

4For the purposes of sections 2 and 3 , a particular person transfers ownership of an aircraft or vessel to another person even if, at the time ownership is transferred to the other person, the particular person retains partial ownership or transfers partial ownership to any third person.

5(1) For the purposes of subsection 18(7) of the Act, the circumstances set out in this section are prescribed circumstances. Taxable amount – sale of partial ownership (2) Subject to subsection (3), for the purposes of section 18 of the Act and for the purposes of determining under section 34 of the Act the amount of tax payable under section 18 of the Act, if a vendor sells only partial ownership of a subject item to a purchaser, the taxable amount of the subject item is the amount determined by the formula A + B where A is the greater of the value of the consideration for the sale of the subject item and the retail value of the subject item at the time at which the sale is completed; and B is the total of all amounts, each of which is the greater of the value of the consideration for, and the fair market value of, an improvement in respect of the subject item that is provided by the vendor, or a person that does not deal at arm’s length with the vendor, in connection with the sale of the subject item, but only to the extent that the amount is not included in the determination of A. Multiple sales of partial ownership (3) For the purposes of section 18 of the Act and for the purposes of determining under section 34 of the Act the amount of tax payable under section 18 of the Act, if a particular sale of only partial ownership of a subject item between a vendor and a purchaser is completed at a particular time and if another sale of only partial ownership of the subject item between the vendor and a purchaser is completed at or after the particular time, the taxable amount of the subject item in respect of the other sale is equal to zero if (a) the taxable amount of the subject item in respect of the particular sale is determined under subsection (2); and (b) before the particular time, the vendor entered into an agreement in writing for the particular sale and an agreement in writing for the other sale.

6(1) For the purposes of section 33 of the Act, the circumstances set out in this section are prescribed circumstances. Tax not payable – aircraft (2) The tax under section 18 of the Act in respect of a sale of a subject aircraft by a vendor to a purchaser is not payable if (a) the vendor is a registered vendor in respect of subject aircraft at the particular time at which the sale is completed; (b) the purchaser is neither registered, nor required to be registered, as a vendor in respect of subject aircraft under Division 5 of Part 1 of the Act at the particular time; (c) an exemption certificate does not apply in respect of the sale in accordance with section 36 of the Act; (d) the subject aircraft (i) is to be exported as soon after the particular time as is reasonable having regard to the circumstances surrounding the exportation, the sale and, if applicable, the normal business practice of the purchaser and vendor, (ii) is not to be used in Canada at any time before the exportation except to the extent reasonably necessary or incidental to its manufacture, offering for sale, transportation or exportation, and (iii) is not to be registered with the Government of Canada or a province before the exportation except if the registration is done solely for a purpose incidental to its manufacture, offering for sale, transportation or exportation; and (e) the vendor maintains evidence satisfactory to the Minister of the exportation of the subject aircraft.

7(1) For the purposes of subsection 36(3) of the Act, the circumstances set out in this section are prescribed circumstances. Exemption certificate – aircraft (2) Subject to subsection (3), an exemption certificate applies in respect of a sale of a subject aircraft by a vendor to a purchaser if (a) the vendor is a registered vendor in respect of subject aircraft at the particular time at which the sale is completed; (b) the certificate is made in prescribed form containing prescribed information; (c) the certificate includes (i) the identification number of the subject aircraft, (ii) a declaration by the purchaser that (A) the subject aircraft is to be exported as soon after the particular time as is reasonable having regard to the circumstances surrounding the exportation, the sale and, if applicable, the normal business practice of the purchaser and vendor, (B) the subject aircraft is not to be used in Canada at any time before the exportation except to the extent reasonably necessary or incidental to its manufacture, offering for sale, transportation or exportation, (C) the subject aircraft is not to be registered with the Government of Canada or a province before the exportation except if the registration is done solely for a purpose incidental to its manufacture, offering for sale, transportation or exportation, and (D) the purchaser is neither registered, nor required to be registered, as a vendor in respect of subject aircraft under Division 5 of Part 1 of the Act at the particular time, and (iii) an acknowledgement by the purchaser that the purchaser is assuming liability to pay any amount of tax in respect of the subject aircraft that is or may become payable by the purchaser under the Act; (d) the purchaser provides to the vendor, in a manner satisfactory to the Minister, the certificate in respect of the sale; and (e) the vendor retains the certificate. Exemption certificate – multiple purchasers (3) If a subject aircraft is sold by a vendor to more than one purchaser, an exemption certificate applies in respect of the sale of the subject aircraft only if, in the absence of this subsection, an exemption certificate would apply in respect of each purchaser in accordance with subsection (2).

8For the purposes of subsection 59(1) of the Act, a person is a prescribed person for a reporting period of the person if the person (a) is a registered vendor in respect of subject vehicles throughout the reporting period; and (b) is not otherwise registered, or required to be registered, under Division 5 of Part 1 of the Act at any time during the reporting period.

9For the purposes of paragraph 119(a) of the Act, subsection 71(2) of the Act is a prescribed provision.

10(1) For the purposes of section 33 of the Act, the circumstances set out in this section are prescribed circumstances. Tax not payable on sale (2) Neither the tax under section 18 of the Act nor the tax under section 29 of the Act in respect of a subject item that is sold by a vendor to a purchaser is payable if the purchaser entered into an agreement in writing before 2022 with the vendor for the sale of the subject item in the course of the vendor’s business of offering for sale that type of subject item. Tax not payable on import (3) The tax under section 20 of the Act in respect of a subject item that is imported is not payable if (a) the importer entered into an agreement in writing before 2022 with a vendor for the transfer of ownership of the subject item to the importer by way of sale; and (b) the agreement was entered into in the course of the vendor’s business of offering for sale that type of subject item. Tax not payable on use (4) The tax under section 26 of the Act in respect of a subject item that is used in Canada at a particular time is not payable if (a) a person entered into an agreement in writing before 2022 with a vendor for the transfer of ownership of the subject item to the person by way of sale; (b) the agreement was entered into in the course of the vendor’s business of offering for sale that type of subject item; and (c) the person is an owner of the subject item at the particular time.