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Annex 8 - Tax Measures
Notices of Ways and Means Motions

Notice of Ways and Means Motion to Amend the Income Tax Act

That it is expedient to amend the Income Tax Act to provide among other things:

Basic Personal Amount

(1) That, there be added to the amount otherwise determined for the basic personal amount

(a) for 2006, $100,

(b) for 2007, $100,

(c) for 2008, $400, and

(d) for 2009, the greater of $600 and the amount necessary to bring the basic personal amount to $10,000.

(2) That, there be added to the amount otherwise determined for each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative

(a) for 2006, $85,

(b) for 2007, $85,

(c) for 2008, $340, and

(d) for 2009, the greater of $510 and the amount necessary to bring each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative to $8,500.

(3) That, there be added to the amount otherwise determined for the net income threshold for each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative

(a) for 2006, $8.50,

(b) for 2007, $8.50,

(c) for 2008, $34, and

(d) for 2009, the greater of $51 and the amount necessary to bring the net income threshold for each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative to $850.

Retirement Savings Limits

(4) That, for the purpose of applying after 2004 the rules relating to registered pension plans, deferred profit sharing plans and registered retirement savings plans, the money purchase limit be

(a) for years after 2005 and before 2010, the greater of $18,000 indexed after 2005 in accordance with section 147.1 of the Act and

(i) for 2006, $19,000,

(ii) for 2007, $20,000,

(iii) for 2008, $21,000,

(iv) for 2009, $22,000, and

(b) for each year after 2009, the money purchase limit for 2009 indexed after 2009 in accordance with section 147.1 of the Act.

Foreign Property Rule

(5) That the limit in respect of foreign property that may be held by pension funds and other deferred income plans be eliminated for months that end in the 2005 and subsequent calendar years.

Disability Tax Credit

(6) That the provisions of the Act relating to the Disability Tax Credit be modified in accordance with proposals described in the budget documents tabled by the Minister of Finance in the House of Commons on February 23, 2005.

Disability Supports Deduction

(7) That, for the 2005 and subsequent taxation years, there be added to the list of expenses eligible for the disability supports deduction, amounts paid

(a) for deaf-blind intervening services used by an individual who is both blind and profoundly deaf (if paid to persons engaged in the business of providing such services); and

(b) for the following services or devices, if the need for the service or device is certified in writing by a medical practitioner:

(i) job coaching services (other than job placement or career counselling services) provided to an individual with a severe and prolonged impairment (if paid to persons engaged in the business of providing such services),

(ii) reading services provided to an individual who is blind or who has a severe learning disability (if paid to persons engaged in the business of providing such services),

(iii) a device that is a Bliss symbol board for use by an individual who has a speech impairment to help the individual communicate by motioning at the symbols or spelling out words,

(iv) a device that is a Braille note-taker for use by a blind individual to allow that individual to take notes (that can be read back to them or printed or displayed in Braille) with the help of a keyboard,

(v) a device that is a page turner used by an individual with a severe and prolonged impairment that markedly restricts the individual’s ability to use their arms or hands to turn the pages of a book or other bound document, and

(vi) a device or software, designed to be used by a blind individual or an individual with a severe learning disability, to enable the individual to read print (to the extent not already allowed under this deduction).

Refundable Medical Expense Supplement

(8) That, for the 2005 and subsequent taxation years, the maximum refundable medical expense supplement described in subsection 122.51(2) of the Act be increased to $750.

Registered Education Savings Plans (RESP)

(9) That, for the 2005 and subsequent taxation years, the maximum period during which contributions may be made to an RESP and the maximum period during which an RESP may be in existence be extended to 25 years and 30 years, respectively, following the year in which the plan was entered into, if

(a) the beneficiary under the RESP is an individual in respect of whom the disability tax credit may be claimed for the 21st year following the year in which the plan was entered into, and

(b) the RESP does not allow more than one beneficiary at any one time.

Canada Child Tax Benefit—Child Disability Benefit Supplement

(10) That, for benefits paid after June 2005, the provisions of the Act relating to benefits payable under the Canada Child Tax Benefit—Child Disability Benefit Supplement be modified to increase the Child Disability Benefit supplement to $2,000 in respect of each child who is eligible for the disability tax credit.

Medical Expense Tax Credit

(11) That, for the 2005 and subsequent taxation years, there be added to the list of expenses eligible for the medical expense tax credit, amounts paid

(a) to purchase, operate and maintain phototherapy equipment for the treatment of psoriasis or other skin disorders;

(b) to operate and maintain an oxygen concentrator;

(c) for deaf-blind intervening services used by an individual who is both blind and profoundly deaf (if paid to persons engaged in the business of providing such services);

(d) for reading services used by an individual who is blind or who has a severe learning disability, if the need for the service is certified in writing by a medical practitioner and paid to persons engaged in the business of providing such services;

(e) for drugs or medical devices obtained under Health Canada’s Special Access Programme;

(f) for the purchase of medical marihuana or marihuana seeds, from Health Canada, for use by a patient who is authorized to possess marihuana for medical purposes under the Marihuana Medical Access Regulations (MMAR) or who holds an Exemption for possession under Section 56 of the Controlled Drugs and Substances Act (CDSA); and

(g) for the purchase of medical marihuana, for use by a patient who is authorized to possess marihuana for medical purposes under the MMAR or who holds an Exemption for possession under Section 56 of the CDSA, from an individual who possesses a Designated-person Production Licence under the MMAR to cultivate or produce marihuana for medical purposes on behalf of that patient or who holds a designated person Exemption for cultivation or production under Section 56 of the CDSA to cultivate or produce marihuana for medical purposes on behalf of that patient.

(12) That, for expenses incurred after February 22, 2005, the provisions of the Act that include as an eligible medical expense reasonable expenses relating to renovations or alterations to a dwelling of a patient who lacks normal physical development or has a severe and prolonged mobility impairment to enable the patient to gain access to, or to be mobile or functional within, the dwelling, be amended to require that such expenses

(a) must be of a type that would not typically be incurred by persons who have normal physical development or who do not have a severe and prolonged mobility impairment; and

(b) must not be of a type that would typically be expected to increase the value of the dwelling.

Medical Expense Tax Credit—Caregiver

(13) That, for the 2005 and subsequent taxation years, the $5,000 maximum amount referred to in subsection 118.2(1) of the Act that an individual is permitted to claim in respect of certain dependants in calculating the medical expense tax credit be increased to $10,000.

Adoption Expense Tax Credit

(14) That, for the 2005 and subsequent taxation years,

(a) an individual be entitled to deduct, in computing tax payable under Part I of the Act for a taxation year in which an adoption order is issued by, or recognized by, a government in Canada in respect of an adopted child of the individual, 16% of the lesser of $10,000 (indexed after 2005) and the total of all amounts paid in respect of eligible adoption expenses incurred during the adoption period in respect of that child (to the extent that the individual has not been reimbursed, and is not entitled to be reimbursed, for these expenses),

(b) eligible adoption expenses include

(i) fees paid to an adoption agency licensed by a provincial or territorial government,

(ii) court costs, legal and administrative expenses,

(iii) reasonable travel and living expenses of the child and the adoptive parents,

(iv) document translation fees,

(v) mandatory fees paid to a foreign institution, and

(vi) any other reasonable expenses required by a provincial or territorial government or an adoption agency licensed by a provincial or territorial government,

(c) the adoption period be the period that

(i) begins at the earlier of the time that the child’s adoption file is opened with a provincial or territorial ministry responsible for adoption (or with an adoption agency licensed by a provincial or territorial government) and the time, if any, that an application related to the adoption is made to a Canadian court, and

(ii) ends at the time of the adoption; and

(d) where more than one individual is entitled to a deduction under this paragraph for a taxation year in respect of a particular child, the total of all amounts so deductible not exceed 16% of the lesser of $10,000 (indexed after 2005) and the total of all eligible adoption expenses incurred in respect of that child, and if the individuals cannot agree as to what portion of the amount each can so deduct, the Minister of National Revenue be permitted to apportion the deduction.

Emergency Medical Services Vehicles

(15) That, for the 2005 and subsequent taxation years, the definition "automobile" in subsection 248(1) of the Act be amended to exclude clearly marked Emergency Medical Services vehicles used to carry paramedics and their emergency medical equipment.

Agricultural Cooperatives

(16) That the Act be modified to introduce a tax deferral in respect of certain dividends paid by an agricultural cooperative corporation in the form of eligible shares, in accordance with proposals described in the Budget documents tabled by the Minister of Finance in the House of Commons on February 23, 2005.

Tsunami Relief

(17) That, for the purpose of section 118.1 of the Act, a gift made by an individual after 2004 and before January 12, 2005 be deemed to have been made in the individual’s 2004 taxation year if

(a) the individual claims a charitable donations tax credit in respect of the gift for the 2004 taxation year,

(b) the gift was made to a registered charity listed under the International Humanitarian Assistance program of the Canadian International Development Agency,

(c) the individual directed the charity to apply the gift to the tsunami relief effort, and

(d) the gift was in the form of cash or was transferred by way of cheque, credit card or money order.

Corporate Surtax

(18) That the surtax imposed on corporations by section 123.2 of the Act be eliminated for taxation years that end after December 31, 2007, with proration for taxation years that include that date.

Corporate Tax Rate Reduction

(19) That, for taxation years that end after 2007, a deduction be provided from the tax otherwise payable under Part I of the Act by a corporation (other than a corporation that is throughout the year an investment corporation, a mortgage investment corporation or a mutual fund corporation), equal to the designated percentage (0.5 per cent for 2008, 1 per cent for 2009, and 2 per cent after 2009, with proration for taxation years that include days in more than one calendar year) of the amount by which the corporation’s taxable income for the year (or, if the corporation is non-resident, its taxable income earned in Canada for the year) exceeds the total of

(a) if the corporation is throughout the year a Canadian-controlled private corporation, the total of

(i) the least of the amounts determined under paragraphs 125(1)(a) to (c) of the Act in respect of the corporation’s small business deduction for the year, and

(ii) the corporation’s aggregate investment income determined under subsection 129(4) of the Act for the year; and

(b) if the corporation is a credit union, the amount in respect of which the corporation applied the deduction from tax provided by subsection 137(3) of the Act.

SR&ED Investment Tax credit

(20) That, with respect to expenditures made after February 22, 2005 on scientific research and experimental development carried on in Canada, the expression "in Canada" include the exclusive economic zone of Canada as defined in the Oceans Act, including the airspace, seabed and subsoil in respect of that zone.

Notice of Ways and Means Motion to Amend the Excise Tax Act

That it is expedient to amend the Excise Tax Act to provide among other things:

Excise Tax on Jewellery

(1) That the tax rate of ten per cent in paragraphs 5(a) to (c) of Schedule I to the Act be reduced to:

(a) eight per cent, after February 23, 2005,

(b) six per cent, after February 28, 2006,

(c) four per cent, after February 28, 2007,

(d) two per cent, after February 29, 2008, and

(e) zero per cent, after February 28, 2009.

GST/HST Health Care Rebate

"ancillary supply" means

(a) an exempt supply of a service of organizing or coordinating the making of facility supplies or home medical supplies in respect of which supply an amount, other than a nominal amount, is paid or payable to the supplier as medical funding, or

(b) the portion of an exempt supply (other than a facility supply, a home medical supply or a prescribed supply) of property or a service (other than a financial service) that represents the extent of the property or service that is, or is reasonably expected to be, consumed or used for making a facility supply and in respect of which portion an amount, other than a nominal amount, is paid or payable to the supplier as medical funding;

"external supplier" means a charity, a public institution or a qualifying non-profit organization (other than a hospital authority or a facility operator), that makes ancillary supplies, facility supplies or home medical supplies;

"facility operator" means a charity, a public institution or a qualifying non-profit organization (other than a hospital authority), that operates a qualifying facility;

"facility supply" means an exempt supply (other than a prescribed supply) in respect of which

(a) the property or service supplied is made available or rendered to an individual at a public hospital or qualifying facility as part of a medically necessary process of health care for the individual for the purpose of maintaining health, preventing disease or diagnosing or treating an injury, illness or disability, or for the purpose of palliative health care, which process

(i) is undertaken in whole or in part at the public hospital or qualifying facility,

(ii) is reasonably expected to take place under the active direction or supervision, or with the active involvement, of

(A) a physician acting in the course of the practise of medicine,

(B) a midwife acting in the course of the practise of midwifery,

(C) if a physician is not readily accessible in the geographic area in which the process takes place, a nurse practitioner acting in the course of the practise of a nurse practitioner, or

(D) a prescribed person acting in prescribed circumstances, and

(iii) in the case of chronic care, requires that the individual stay overnight at the public hospital or qualifying facility and requires or is reasonably expected to require that

(A) a registered nurse be at the public hospital or qualifying facility at all times when the individual is at the public hospital or qualifying facility,

(B) a physician or, if a physician is not readily accessible in the geographic area in which the process takes place, a nurse practitioner, be at, or be on-call to attend at, the public hospital or qualifying facility at all times when the individual is at the public hospital or qualifying facility,

(C) throughout the process, the individual be subject to medical management and receive a range of therapeutic health care services that includes registered nursing care, and

(D) it not be the case that all or substantially all of each calendar day or part during which the individual stays at the public hospital or qualifying facility is time during which the individual does not receive therapeutic health care services referred to in clause (C), and

(b) if the supplier does not operate the public hospital or qualifying facility, an amount, other than a nominal amount, is paid or payable as medical funding to the supplier in respect of the supply;

"home medical supply" means an exempt supply (other than a facility supply or a prescribed supply) of property or a service

(a) that is made

(i) as part of a medically necessary process of health care for an individual for the purpose of maintaining health, preventing disease or diagnosing or treating an injury, illness or disability, or for the purpose of palliative health care, and

(ii) after a physician acting in the course of the practise of medicine, or a prescribed person acting in prescribed circumstances, has identified or confirmed that it is appropriate for the process to take place at the individual’s place of residence or lodging (other than a public hospital or a qualifying facility),

(b) in respect of which the property or service supplied is made available or rendered to the individual at the individual’s place of residence or lodging (other than a public hospital or a qualifying facility), on the authorization of a person who is responsible for coordinating the process and under circumstances in which it is reasonable to expect that the person will carry out that responsibility in consultation with, or with ongoing reference to instructions for the process given by, a physician acting in the course of the practise of medicine, or a prescribed person acting in prescribed circumstances,

(c) in respect of which substantially all of the property or services included in the supply are other than meals, accommodation, domestic services of an ordinary household nature, assistance with the activities of daily living and social, recreational and other related services to meet the psycho-social needs of the individual, and

(d) in respect of which an amount, other than a nominal amount, is paid or payable as medical funding to the supplier in respect of the supply;

"medical funding" of a supplier in respect of a supply means an amount of money (including a forgivable loan but not including any other loan or a refund, remission or rebate of, or credit in respect of, taxes, duties or fees imposed under any statute) that is paid or payable to the supplier in respect of health care services for the purpose of financially assisting the supplier in making the supply or as consideration for the supply by

(a) a government, or

(b) a person that is a charity, a public institution or a qualifying non-profit organization

(i) one of the purposes of which is organizing or coordinating the delivery of health care services to the public, and

(ii) in respect of which it is reasonable to expect that a government will be the primary source of funding for the activities of the person in respect of the delivery of health care services to the public during the fiscal year of the person in which the supply is made;

"midwife" means a person who is entitled under the laws of a province to practise the profession of midwifery;

"physician" means a person who is entitled under the laws of a province to practise the profession of medicine;

"qualifying funding" of the operator of a facility for all or part of a fiscal year of the operator means a readily ascertainable amount of money (including a forgivable loan but not including any other loan or a refund, remission or rebate of, or credit in respect of, taxes, duties or fees imposed under any statute) that is paid or payable to the operator in respect of the delivery of health care services to the public for the purpose of financially assisting in operating the facility during the fiscal year or part, as consideration for an exempt supply of making the facility available for use in making facility supplies at the facility during the fiscal year or part or as consideration for facility supplies of property or services that are made available or rendered at the facility during the fiscal year or part and is paid or payable by

(a) a government, or

(b) a person that is a charity, a public institution or a qualifying non-profit organization

(i) one of the purposes of which is organizing or coordinating the delivery of health care services to the public, and

(ii) in respect of which it is reasonable to expect that a government will be the primary source of funding for the activities of the person in respect of the delivery of health care services to the public during the fiscal year of the person in which the supply is made;

"specified activities" means activities referred to in any of clauses (4.1)(b)(iii)(B) to (D), other than the operation of a public hospital;

"specified supply" of property of a person means

(a) a taxable supply made to the person at any time after December 31, 2004, of property that was owned on that day by the person or by another person who is related to the person at the time that the supply is made, or

(b) a taxable supply that the person is deemed under subsection 211(4) to have made at any time after December 30, 2004, of property that was, on that day, owned by the person, or by another person who last supplied the property to the person by way of sale and who was related to the person on the day the supply by way of sale was made;

(f ) a facility operator, or

(g) an external supplier;

(b) in the case of a hospital authority, a facility operator or an external supplier, 83%,

(2.1) For the purposes of this section, a facility, or part of a facility, other than a public hospital, is a qualifying facility for a fiscal year, or any part of a fiscal year, of the operator of the facility or part, if

(a) supplies of services that are ordinarily rendered during that fiscal year or part to the public at the facility or part would be facility supplies if the references in the definition of that term in subsection (1) to "public hospital or qualifying facility" were references to the facility or part;

(b) an amount, other than a nominal amount, is paid or payable to the operator as qualifying funding in respect of the facility or part for the fiscal year or part; and

(c) an accreditation, licence or other authorization that is recognized or provided for under a law of Canada or a province in respect of facilities for the provision of health care services applies to the facility or part during that fiscal year or part.

(i) the reference in subsection (4) to "specified percentage" were read as a reference to "specified percentage applicable to a selected public service body described in whichever of paragraphs (a) to (g) of the definition of that expression in subsection (1) applies to the person minus 50%",

(ii) the reference in subsection (4) to "specified provincial percentage" were read as a reference to the greater of "specified provincial percentage applicable to a selected public service body described in whichever of paragraphs (a) to (e) of the definition of that expression in subsection (1) applies to the person minus 50%" and "0%",

(iii) in the case of a person who is not designated to be a municipality for the purposes of this section, the reference in the description of C in subsection (4) to "designated activities" were read as a reference to

(A) in the case of a person determined to be a municipality under paragraph (b) of the definition "municipality" in subsection 123(1), activities engaged in by the person in the course of fulfilling the person’s responsibilities as a local authority,

(B) in the case of a person acting in the person’s capacity as a hospital authority, activities engaged in by the person in the course of operating a public hospital, operating a qualifying facility for use in making facility supplies, or of making facility supplies, ancillary supplies or home medical supplies,

(C) in the case of a person acting in the person’s capacity as a facility operator, activities engaged in by the person in the course of operating a qualifying facility for use in making facility supplies, or of making facility supplies, ancillary supplies or home medical supplies,

(D) in the case of a person acting in the person’s capacity as an external supplier, activities engaged in by the person in the course of making ancillary supplies, facility supplies or home medical supplies, or

(E) in any other case, activities engaged in by the person in the course of operating a recognized degree-granting institution, a college affiliated with, or research body of, such an institution, an elementary or secondary school or a post-secondary college or technical institute, as the case may be, and

(iv) in the case of a person who is not designated to be a municipality for the purposes of this section, the reference in the description of F in subsection (4) to "designated activities" were read as a reference to

(A) in the case of a person determined to be a municipality under paragraph (b) of the definition "municipality" in subsection 123(1), activities engaged in by the person in the course of fulfilling the person’s responsibilities as a local authority, or

(B) in any other case, activities engaged in by the person in the course of operating a recognized degree-granting institution, a college affiliated with, or research body of, such an institution, a public hospital, an elementary or secondary school or a post-secondary college or technical institute, as the case may be.

(4.2) For the purposes of determining a rebate payable to a person, in determining an amount under paragraphs 3(a) and 4(a), or paragraph (4.1)(a) if the applicable specified provincial percentage is 0% and the person is a selected public service body described in any of paragraphs (a) to (e) of the definition of that expression in subsection (1) or in paragraph (f) or (g) of that definition if the person is resident in Newfoundland and Labrador, no tax under any of subsection 165(2), sections 212.1 and 218.1 and Division IV.1 payable or deemed to have been paid or collected by the person shall be included

(14) For the purposes of this section, if a person incurs substantially all of the tax that is included in determining the amount of the non-creditable tax charged in respect of property or a service for a claim period of the person acting in the person’s capacity as a hospital authority, a facility operator, or an external supplier, the person is deemed to have incurred all of the tax that is included in determining that amount in the course of fulfilling the person’s responsibilities as a hospital authority, a facility operator or an external supplier, as the case may be.

(15) Despite subsections (3), (4) and (4.1), for the purpose of applying subsection (4.1) to determine a rebate payable under subsection (3) or (4) to a person that is an external supplier, a facility operator or a hospital authority for a claim period of the person, if the person is required to determine under paragraph (4.1)(b) a particular amount, in respect of a specified supply of property of the person made at any time, that would, if subsection (4) applied to the person, be determined by the formula in paragraph (4)(a) for the claim period, and the percentage used for variable "C" of the formula in determining the particular amount is the extent to which the person intended, at that time, to consume, use or supply the property in the course of specified activities, the particular amount shall be determined by the formula

A x B

where

A is the amount that would, in the absence of this subsection,
be determined to be the particular amount, and

B is the amount determined by the formula

(B₁-B₂)/ B₁

where

B₁ is the fair market value of the property at the time of the supply, and

B₂ is the fair market value of the property on January 1, 2005.

Directors’ Liability for GST/HST Refunds

323. (1) If a corporation fails to remit an amount of net tax as required under subsection 228(2) or (2.3) or to pay an amount as required under section 230.1 that was paid to, or was applied to the liability of, the corporation as a net tax refund, the directors of the corporation at the time the corporation was required to remit or pay, as the case may be, the amount are jointly and severally, or solidarily, liable, together with the corporation, to pay the amount and any interest on the amount or penalties relating to the amount.

GST/HST Web Registry

(6.1) Upon being provided by any person with information specified by the Minister sufficient to identify a single person and a number, an official may confirm or deny that the following statements are both true:

(a) the identified person is registered under Subdivision d of Division V; and

(b) the number is the business number of the identified person.

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