Table of Contents  Previous	Main Menu  Help

Annex 3 - Tax Measures: Supplementary Information and Notices of Ways and Means Motions:
Notices of Ways and Means Motions

Notice of Ways and Means Motion to amend the Excise Tax Act, the Excise Act, 2001, the Excise Act and the Air Travellers Security Charge Act relating to the rate reduction for the GST and the federal component of the HST

That it is expedient to amend the Excise Tax Act, the Excise Act, 2001, the Excise Act and the Air Travellers Security Charge Act as follows:

Part 1—Excise Tax Act

G is

(A) 7%, if the amount determined for D is included, or would be included if the tax became payable, in the description of A in subsection 225.2(2) for a reporting period of the selected listed financial institution that ends before July 1, 2006, and

(B) 6%, in any other case,

P is

(A) 7%, if the amount determined for M is included, or would be included if the tax became payable, in the description of A in subsection 225.2(2) for a reporting period of the selected listed financial institution that ends before July 1, 2006, and

(B) 6%, in any other case,

Imposition of goods and services tax

165. (1) Subject to this Part, every recipient of a taxable supply made in Canada shall pay to Her Majesty in right of Canada tax in respect of the supply calculated at the rate of 6% on the value of the consideration for the supply.

(a) to any supply (other than a supply deemed under section 191 of the Act to have been made) made on or after July 1, 2006;

(b) for the purposes of calculating tax in respect of any supply (other than a supply by way of sale of real property) made before July 1, 2006, but only in respect of the portion of the tax that

(i) becomes payable on or after July 1, 2006, without having been paid before that day, or

(ii) is paid on or after July 1, 2006 without having become payable;

(c) for the purposes of calculating tax in respect of any supply (other than a supply deemed under Part IX of the Act to have been made) by way of sale of real property made before July 1, 2006, if ownership and possession of the property are transferred on or after July 1, 2006 to the recipient under the agreement for the supply unless the supply is a supply of a residential complex pursuant to an agreement of purchase and sale, evidenced in writing, entered into on or before May 2, 2006;

(d) to any supply by way of sale of a residential complex, which is a single unit residential complex (as defined in subsection 123(1) of the Act) or a residential condominium unit, deemed under subsection 191(1) of the Act to have been made on or after July 1, 2006, unless the supply is deemed to have been made as a consequence of the builder giving possession of the complex to a person under an agreement, entered into on or before May 2, 2006, for the supply by way of sale of the building or part of it in which the residential unit forming part of the complex is situated;

(e) to any supply by way of sale of a residential condominium unit deemed under subsection 191(2) of the Act to have been made on or after July 1, 2006, unless possession of the unit was given to the particular person referred to in that subsection before July 1, 2006;

(f) to any supply by way of sale of a residential complex deemed under subsection 191(3) of the Act to have been made on or after July 1, 2006, unless the supply is deemed to have been made as a consequence of the builder giving possession of a residential unit in the complex to a person under an agreement for the supply by way of sale of the building or part of it forming part of the complex and

(i) the agreement was entered into on or before May 2, 2006, or

(ii) another agreement was entered into on or before May 2, 2006 by the builder and another person and that other agreement was not terminated before July 1, 2006, and was for the supply by way of sale of the building or part of it forming part of the complex;

(g) to any supply by way of sale of an addition to a residential complex deemed under subsection 191(4) of the Act to have been made on or after July 1, 2006, unless the supply is deemed to have been made as a consequence of the builder giving possession of a residential unit in the addition to a person under an agreement for the supply by way of sale of the building or part of it forming part of the complex and

(i) the agreement was entered into on or before May 2, 2006, or

(ii) another agreement was entered into on or before May 2, 2006 by the builder and another person and that other agreement was not terminated before July 1, 2006, and was for the supply by way of sale of the building or part of it forming part of the addition;

(h) for the purposes of calculating tax on the cost to another person of supplying property or a service to a financial institution under paragraph (c) of the description of A in subsection 225.2(2) of the Act if the reporting period of the financial institution ends on or after July 1, 2006; and

(i) for the purposes of determining or calculating any of the following amounts if none of paragraphs (a) to (h) applies:

(i) tax on or after July 1, 2006,

(ii) tax that is not payable but would have been payable on or after July 1, 2006, in the absence of certain circumstances described in the Act, and

(iii) an amount or a number, at any time on or after July 1, 2006, by or in accordance with an algebraic formula that makes reference to the rate set out in subsection 165(1) of the Act.

A is

(I) where

1. the benefit amount is required to be included under paragraph 6(1)(a) or (e) of the Income Tax Act in computing the individual’s income from an office or employment and the last establishment of the employer at which the individual ordinarily worked or to which the individual ordinarily reported in the year in relation to that office or employment is located in a participating province, or

2. the benefit amount is required under subsection 15(1) of that Act to be included in computing the individual’s income and the individual is resident in a participating province at the end of the year, 

the total of 5% and the tax rate for the participating province, and 

(II) in any other case, 5%,

e) la personne est réputée avoir payé, au moment du versement de l’indemnité et relativement à la fourniture, une taxe égale au résultat du calcul suivant :

A x (B/C)

où :

A représente le montant de l’indemnité,

B :

(i) la somme du taux fixé au paragraphe 165(1) et du taux de taxe applicable à une province participante si, selon le cas :

(A) la totalité ou la presque totalité des fournitures relativement auxquelles l’indemnité est versée ont été effectuées dans des provinces participantes,

(B) l’indemnité est versée en vue de l’utilisation du véhicule à moteur dans des provinces participantes,

(ii) dans les autres cas, le taux fixé au paragraphe 165(1),

C la somme de 100 % et du pourcentage déterminé selon l’élément B.

(f) the person is deemed to have paid, at the time the allowance is paid, tax in respect of the supply equal to the amount determined by the formula

A x (B/C)

where

A is the amount of the allowance, and

B is

(i) the total of the rate set out in subsection 165(1) and the tax rate for a participating province if

(A) all or substantially all of the supplies for which the allowance is paid were made in participating provinces, or

(B) the allowance is paid for the use of the motor vehicle in participating provinces, and

(ii) in any other case, the rate set out in subsection 165(1), and

C is the total of 100% and the percentage determined for B.

A is

(a) if the supply is made in a participating province, the total of the rate set out in subsection 165(1) and the tax rate for that province, and

(b) in any other case, the rate set out in subsection 165(1),

6. (1) The definition "tax fraction" in subsection 181(1) of the Act is replaced by the following:

"tax fraction"

"tax fraction" of a coupon value or of the discount or exchange value of a coupon means

(a) where the coupon is accepted in full or partial consideration for a supply made in a participating province, the fraction

A/B

where

A is the total of the rate set out in subsection 165(1) and the tax rate for that participating province, and

B is the total of 100% and the percentage determined for A; and

(b) in any other case, the fraction

C/D

where

C is the rate set out in subsection 165(1), and

D is the total of 100% and the percentage determined for C.

A représente :

(i) si la taxe prévue au paragraphe 165(2) était payable relativement à la fourniture du bien ou du service au profit de la personne, la somme du taux fixé au paragraphe 165(1) et du taux de taxe applicable à la province participante dans laquelle cette fourniture a été effectuée,

(ii) dans les autres cas, le taux fixé au paragraphe 165(1),

A is

(i) if tax under subsection 165(2) was payable in respect of the supply of the property or service to the particular person, the total of the rate set out in subsection 165(1) and the tax rate of the participating province in which that supply was made, and

(ii) in any other case, the rate set out in subsection 165(1), and

B is

(i) if tax under subsection 165(2) was payable in respect of the supply, the total of 100%, the rate set out in subsection 165(1) and the tax rate for the participating province in which the supply was made, and

(ii) in any other case, the total of 100% and the rate set out in subsection 165(1), and

A is

(i) if the supply is made in a participating province, the total of the rate set out in subsection 165(1) and the tax rate for that province, and

(ii) in any other case, the rate set out in subsection 165(1),

A is

(A) if the property is situated in a participating province at the particular time, the total of the rate set out in subsection 165(1) and the tax rate for that province, and

(B) in any other case, the rate set out in subsection 165(1),

A is

(I) the rate set out in subsection 165(1) if

1. the property is situated in a participating province at the particular time, it was seized or repossessed before the day that is three years after the implementation date for that province (as defined in section 348) and tax would not have been payable had the property been purchased in Canada from the person at the time it was seized or repossessed, or

2. the property is situated in a non-participating province at the particular time, and

(II) in any other case, the total of the rate set out in subsection 165(1) and the tax rate for the participating province in which the property is situated at the particular time,

A is

(i) if the property is situated in a participating province at the particular time, the total of the rate set out in subsection 165(1) and the tax rate for that province, and

(ii) in any other case, the rate set out in subsection 165(1),

A is

(i) if the supply is made in a participating province, the total of the rate set out in subsection 165(1) and the tax rate for that province, and

(ii) in any other case, the rate set out in subsection 165(1),

A is

(A) if the property is situated in a participating province at the particular time, the total of the rate set out in subsection 165(1) and the tax rate for that province, and

(B) in any other case, the rate set out in subsection 165(1),

A is

(A) the rate set out in subsection 165(1) if

(I) the property is situated in a participating province at the particular time, it was transferred before the day that is three years after the implementation date for that province (as defined in section 348) and tax would not have been payable had the property been purchased in Canada from the person at the time it was transferred, or

(II) the property is situated in a non-participating province at the particular time, and

(B) in any other case, the total of the rate set out in subsection 165(1) and the tax rate for the participating province in which the property is situated at the particular time,

A is

(i) if the property is situated in a participating province at the particular time, the total of the rate set out in subsection 165(1) and the tax rate for that province, and

(ii) in any other case, the rate set out in subsection 165(1),

11. (1) The description of A in clause 184.1(2)(d)(i)(A) of the Act is replaced by the following:

A is

(I) if the supply deemed under subparagraph (a)(i) to be made by the surety is made in a participating province, the total of the rate set out in subsection 165(1) and the tax rate for the participating province, and

(II) in any other case, the rate set out in subsection 165(1), and

(2) Subsection (1) applies to a person acting as a surety under a performance bond in respect of a contract for a particular taxable supply of construction services if a contract payment (within the meaning of subsection 184.1(2) of the Act) becomes due or is paid without having become due to the person on or after July 1, 2006 by reason of the person carrying on the particular construction.

(3) Despite subsection (2) and for the purpose of determining the total amount of all input tax credits in respect of direct inputs (within the meaning of paragraph 184.1(2)(c) of the Act), where a surety is carrying on construction of real property situated in Canada as full or partial satisfaction of the surety’s obligation under a bond, a contract payment (within the meaning of paragraph 184.1(2)(a) of the Act), other than a contract payment that is not in respect of the particular construction, becomes due or is paid without having become due before July 1, 2006 and another contract payment (within the meaning of paragraph 184.1(2)(a) of the Act), other than a contract payment that is not in respect of the particular construction, becomes due without having been paid before that day or is paid without having become due on or after that day, clause 184.1(2)(d)(i)(A) of the Act shall be read as follows:

(A) the amount determined by the formula

(A x B) + (C x D)

where

A is

(I) if the supply deemed under subparagraph (a)(i) to be made by the surety is made in a participating province, the total of 7% and the rate of tax for that participating province, and

(II) in any other case 7%,

B is the total of all contract payments (other than contract payments that are not in respect of the particular construction) that become due before July 1, 2006 or are paid, without having become due, to the surety before that day,

C is

(I) if the supply deemed under subparagraph (a)(i) to be made by the surety is made in a participating province, the total of 6% and the rate of tax for the participating province, and

(II) in any other case, 6%, and

D is the total of all contract payments (other than contract payments that are not in respect of the particular construction) that becomes due on or after July 1, 2006 without having been paid before that day or are paid, without having become due, to the surety on or after July 1, 2006

B is

(i) if that supply is made in a participating province, the total of 100%, the rate set out in subsection 165(1) and the tax rate for that province, and

(ii) in any other case, the total of 100% and the rate set out in subsection 165(1),

Prizes

188. (1) If a commercial activity of a registrant (other than a registrant to whom subsection (5) applies) consists of taking bets or conducting games of chance and, in the course of that activity, the registrant pays an amount of money at any time in a reporting period as a prize or winnings to a bettor or a person playing or participating in the games, for the purpose of determining an input tax credit of the registrant, the registrant shall be deemed to have received at that time a taxable supply of a service for use exclusively in the activity and to have paid, at that time, tax in respect of the supply equal to the amount determined by the formula

(A/B) x C

where

A is

(a) if the supply is made in a participating province, the total of the rate set out in subsection 165(1) and the tax rate for that province, and

(b) in any other case, the rate set out in subsection 165(1),

B is the total of 100% and the percentage determined for A, and

C is the amount of money paid as the prize or winnings.

14. (1) The portion of subsection 193(1) of the Act before paragraph (a) is replaced by the following:

Sale of real property

193. (1) Subject to subsection (2.1), if at a particular time a registrant makes a particular taxable supply of real property by way of sale, other than

Sale by public sector bodies

(2) Subject to subsection (2.1), if at a particular time a registrant that is a public sector body (other than a financial institution) makes a particular taxable supply of real property by way of sale (other than a supply that is deemed under subsection 200(2) or 206(5) to have been made) and, immediately before the time tax becomes payable in respect of the particular taxable supply, the property was not used by the registrant primarily in commercial activities of the registrant, except where subsection (1) applies, the registrant may, despite section 170 and Subdivision d, claim an input tax credit for the reporting period in which tax in respect of the particular taxable supply became payable or is deemed to have been collected, as the case may be, equal to the lesser of

Limitation

(2.1) If the particular taxable supply of property referred to in subsection (1) or (2) is made at a particular time by a public sector body to another person with whom the public sector body is not dealing at arm’s length, the value of A in subsection (1) and the input tax credit under subsection (2) shall not exceed the lesser of

(a) the basic tax content of the property at the particular time; and

(b) the amount determined by the formula

(A/B) x C

where

A is the basic tax content of the property at the particular time,

B is the amount that would be the basic tax content of the property at that time if that amount were determined without reference to the description of B in paragraph (a) and the description of K in paragraph (b) of the definition of "basic tax content" in subsection 123(1), and

C is the tax that is or would, in the absence of section 167, be payable in respect of the particular taxable supply.

A is

(i) if tax under subsection 165(2) was payable in respect of the supply, the total of the rate set out in subsection 165(1) and the tax rate for the participating province in which the supply was made, and

(ii) in any other case, the rate set out in subsection 165(1),

A is

(i) in the case of an acquisition or importation in respect of which tax is payable only under subsection 165(1) or section 212 or 218, as the case may require, and in the case of an acquisition deemed to have been made under subsection (5) of a vehicle or aircraft in respect of which no tax under subsection 165(2) was payable by the registrant, the amount determined by the formula

C/D

where

C is the rate set out in subsection 165(1), and

D is the total of 100% and the percentage determined for C,

(ii) in the case of the bringing into a participating province of the vehicle or aircraft from a non-participating province and in the case of an acquisition in respect of which tax under section 220.06 is payable, the amount determined by the formula

E/F

where

E is the tax rate for the participating province, and

F is the total of 100% and the percentage determined for E, and

(iii) in any other case, the amount determined by the formula

G/H

where

G is the total of the rate set out in subsection 165(1) and the tax rate for a participating province, and

H is the total of 100% and the percentage determined for G, and

A is

(i) in the case of an acquisition or importation in respect of which tax is payable only under subsection 165(1) or section 212 or 218 of the Act, as the case may require, and in the case of an acquisition deemed to have been made under subsection (5) of a vehicle or aircraft in respect of which no tax under subsection 165(2) of the Act was payable by the registrant, 6.5/106.5,

(ii) in the case of the bringing into a participating province of the vehicle or aircraft from a non-participating province and in the case of an acquisition in respect of which tax under section 220.06 of the Act is payable, 8/108, and

(iii) in any other case, 14.5/114.5, and

(a) to have made, immediately before that day, a taxable supply of the property by way of sale and to have collected, on that day, tax in respect of the supply equal to the basic tax content of the property on that day; and

(b) to have received, on that day, a taxable supply of the property by way of sale and to have paid, on that day, tax in respect of the supply equal to the basic tax content of the property on that day.

(2) Subsection (1) applies in respect of an election that is revoked and ceases to have effect on or after May 2, 2006.

Imposition of goods and services tax

212. Subject to this Part, every person who is liable under the Customs Act to pay duty on imported goods, or who would be so liable if the goods were subject to duty, shall pay to Her Majesty in right of Canada tax on the goods calculated at the rate of 6% on the value of the goods.

Imposition of goods and services tax

218. Subject to this Part, every recipient of an imported taxable supply shall pay to Her Majesty in right of Canada tax calculated at the rate of 6% on the value of the consideration for the imported taxable supply.

(2) Subsection (1) applies

(a) to any imported taxable supply made on or after July 1, 2006;

(b) for the purposes of calculating tax in respect of any imported taxable supply made before July 1, 2006, but only in respect of consideration that becomes due on or after that day without having been paid before that day or that is paid, without having become due, on or after July 1, 2006; and

(c) if neither paragraph (a) nor (b) applies, for the purposes of determining or calculating tax that is not payable but would have been payable on or after July 1, 2006, in the absence of certain circumstances described in the Act.

20. (1) The description of E in subsection 225.2(2) of the Act is replaced by the following:

E is the rate set out in subsection 165(1);

A is the total of 100%, the rate set out in subsection 165(1) and the tax rate for that province, and

(ii) the total consideration for all supplies (in this subparagraph referred to as the "non-participating provinces’ supplies") that are specified supplies to which subsection 165(2) did not apply by the amount determined by the formula

(100%/A) x B

where

A is the total of 100% and the rate set out in subsection 165(1),

B is

(A) if the particular person has made an election under this subsection that is in effect for that fiscal year, the part of the dividend that is in respect of the non-participating province’s supplies, and

(B) in any other case, the amount determined by the formula

(C/D) x E

where

C is the portion of the total of the values determined, in computing the specified amount in respect of the dividend, for B and D in subsection (1) that is attributable to supplies made in non-participating provinces,

D is the total referred to in the description of C, and

E is the specified amount in respect of the dividend; and

22. (1) The description of A in subsection 253(1) of the Act is replaced by the following:

A is

(a) where the tax paid by the individual includes only tax imposed under subsection 165(1) or section 212 or 218, the amount determined by the formula

D/E

where

D is the rate set out in subsection 165(1), and

E is the total of 100% and the percentage determined for D,

(b) where the tax paid by the individual does not include any tax imposed under any of those provisions, the amount determined by the formula

F/G

where

F is the tax rate for a participating province, and

G is the total of 100% and the percentage determined for F, and

(c) in any other case, the amount determined by the formula

H/I

where

H is the total of the rate set out in subsection 165(1) and the tax rate for a participating province, and

I is the total of 100% and the percentage determined for H,

(ii) paid tax in respect of the instrument equal to the amount determined by the formula

A x B

where

A is

(A) where the tax paid by the individual includes only tax imposed under subsection 165(1) or section 212 or 218, the amount determined by the formula

C/D

where

C is the rate set out in subsection 165(1), and

D is the total of 100% and the percentage determined for C,

(B) where the tax paid by the individual does not include any tax imposed under any of those provisions, the amount determined by the formula

E/F

where

E is the tax rate for a participating province, and

F is the total of 100% and the percentage determined for E, and

(C) in any other case, the amount determined by the formula

G/H

where

G is the total of the rate set out in subsection 165(1) and the tax rate for a participating province, and

H is the total of 100% and the percentage determined for G, and

B is the capital cost allowance in respect of that instrument that was deductible under the Income Tax Act in computing the individual’s income from the partnership for that calendar year;

(ii) paid, in that reporting period, tax in respect of that acquisition equal to the amount determined by the formula

A x B

where

A is

(A) where the tax paid by the individual includes only tax imposed under subsection 165(1) or section 212 or 218, the amount determined by the formula

C/D

where

C is the rate set out in subsection 165(1), and

D is the total of 100% and the percentage determined for C, and

(B) where the tax paid by the individual does not include any tax imposed under any of those provisions, the amount determined by the formula

E/F

where

E is the tax rate for a participating province, and

F is the total of 100% and the percentage determined for E, and

(C) in any other case, the amount determined by the formula

G/H

where

G is the total of the rate set out in subsection 165(1) and the tax rate for a participating province, and

H is the total of 100% and the percentage determined for G, and

B is

(A) in the case of property imported by the individual, the amount (not exceeding the total of the value of the property determined under section 215 and the tax calculated on it) in respect of the acquisition and importation of the property by the individual that was deductible under the Income Tax Act in computing the individual’s income from the partnership for that calendar year, and

(B) in any other case, the amount in respect of the acquisition of the property or service by the individual that was so deductible in computing that income.

A is

(a) where the tax paid by the individual includes only tax imposed under subsection 165(1) or section 212 or 218, 6.5/106.5,

(b) where the tax paid by the individual does not include any tax imposed under any of those provisions, 8/108, and

(c) in any other case, 14.5/114.5,

(h) where the total consideration is not more than $350,000, an amount equal to the lesser of $7,560 and 36% of the total tax paid by the particular individual, and

A is the lesser of $7,560 and 36% of the total tax paid by the particular individual, and

(c) the fair market value of the complex, at the time possession of the complex is given to the particular individual under the agreement, is less than $477,000,

(h) if the fair market value referred to in paragraph (c) is not more than $371,000, an amount equal to the lesser of $7,560 and 2.04% of the total (in this subsection referred to as the "total consideration") of all amounts, each of which is the consideration payable by the particular individual to the builder for the supply by way of sale to the particular individual of the building or part of a building referred to in paragraph (a) or of any other structure that forms part of the complex, other than consideration that can reasonably be regarded as rent for the supplies of the land attributable to the complex or as consideration for the supply of an option to purchase that land, and

(i) if the fair market value referred to in paragraph (c) is more than $371,000 but less than $477,000, the amount determined by the formula

A x [($477,000 - B)/$106,000]

where

A is the lesser of $7,560 and 2.04% of the total consideration, and

B is the fair market value referred to in paragraph (c).

(a) an individual is entitled to a rebate under subsection (2), or to be paid or credited the amount of such a rebate under subsection (4), in respect of a residential complex situated in Nova Scotia or would be so entitled if the fair market value of the complex, at the time possession of the complex is given to the individual under the agreement for the supply of the complex to the individual, were less than $477,000, and

(d) the total (in this subsection referred to as the "total consideration") of all amounts, each of which is the consideration payable for the supply to the particular individual of the share or an interest in the corporation, complex or unit, is less than $477,000,

(g) if the total consideration is not more than $371,000, an amount equal to the lesser of $7,560 and 2.04% of the total consideration, and

(h) if the total consideration is more than $371,000 but less than $477,000, the amount determined by the formula

A x [($477,000 - B)/$106,000]

where

A is the lesser of $7,560 and 2.04% of the total consideration, and

B is the total consideration.

(3) Paragraph 255(2.1)(c) of the Act is replaced by the following:

(c) the individual is entitled to a rebate under subsection (2) in respect of the share or would be so entitled if the total (in this subsection referred to as the "total consideration") of all amounts, each of which is the consideration payable for the supply to the individual of the share or an interest in the corporation, complex or unit, were less than $477,000,

the Minister shall, subject to subsection (3), pay a rebate to the particular individual equal to the amount determined by the formula

A x ($450,000 - B)/$100,000

where

A is the lesser of 36% of the total tax paid by the particular individual before an application for the rebate is filed with the Minister in accordance with subsection (3) and

(i) if all or substantially all of that tax was paid at the rate of 6%, $7,560, and

(ii) in any other case, the lesser of $8,750 and the amount determined by the formula

(C x $1,260) + $7,560

where

C is the extent (expressed as a percentage) to which that tax was paid at the rate of 7%, and

B is the greater of $350,000 and the fair market value of the complex referred to in paragraph (b).

A is the lesser of $7,560 and the amount determined by the formula

A is the lesser of $7,560 and the amount determined by the formula

A is the lesser of $7,560 and the amount determined by the formula

(4) Subsection (1) applies to

(a) a taxable supply to a recipient from another person of a residential complex or an interest in a residential complex, in respect of which ownership and possession under the agreement for the supply are transferred on or after July 1, 2006, unless the agreement for the supply is evidenced in writing and was entered into on or before May 2, 2006; and

(b) a deemed purchase (within the meaning of subparagraph 256.2(3)(a)(ii) of the Act) by a builder if the tax in respect of the deemed purchase of a complex or an addition to a complex is deemed to have been paid on or after July 1, 2006.

(a) the agreement was entered into on or before May 2, 2006, or

(b) another agreement was entered into on or before May 2, 2006 by the builder and another person and that other agreement was not terminated before July 1, 2006 and was for the supply by way of sale of the building or part of it forming part of

(i) in the case of a deemed supply of a complex, the complex, or

(ii) in the case of a deemed supply of an addition, the addition.

(a) a taxable supply by way of sale to a recipient from another person of a residential complex, or an interest in a residential complex, in respect of which ownership and possession under the agreement for the supply are transferred on or after July 1, 2006, unless the agreement is evidenced in writing and was entered into on or before May 2, 2006; and

(b) a deemed purchase (within the meaning of subparagraph 256.2(5)(a)(ii) of the Act) by a builder if the tax in respect of the deemed purchase of a complex or an addition to a complex is deemed to have been paid on or after July 1, 2006.

Transitional rebate

256.3 (1) If a particular person, other than a cooperative housing corporation,

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into on or before May 2, 2006, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the particular person on or after July 1, 2006,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(c) is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection, in respect of the tax referred to in paragraph (b),

the Minister shall, subject to subsection (7), pay a rebate to the particular person equal to 1% of the value of the consideration for the supply.

Transitional rebate

(2) If a particular person, other than a cooperative housing corporation,

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into on or before May 2, 2006, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the particular person on or after July 1, 2006,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(c) is entitled to claim a rebate under subsection 256.2(3) in respect of any residential unit situated in the complex,

the Minister shall, subject to subsection (7), pay a rebate to the particular person equal to the amount determined by the formula

A x [0.01 - ((B/A)/7)]

where

A is the consideration payable for the supply to the particular person of the complex, and

B is the amount of the rebate under subsection 256.2(3) that the particular person is entitled to claim in respect of the complex.

Transitional rebate

(3) If a particular person, other than a cooperative housing corporation,

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into on or before May 2, 2006, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the particular person on or after July 1, 2006,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(c) is entitled to claim a rebate under section 259 in respect of the tax referred to in paragraph (b) and is not entitled to claim any input tax credit or any other rebate, other than a rebate under this subsection, in respect of that tax,

the Minister shall, subject to subsection (7), pay a rebate to the particular person equal to the amount determined by the formula

A x [0.01 - ((B/A)/7)]

where

A is the consideration payable for the supply to the particular person of the complex, and

B is

(i) in the case where the complex is situated in a participating province, the amount of the rebate under section 259 that the particular person would have been entitled to claim if no tax under subsection 165(2) would have been payable or paid in respect of the complex; and

(ii) in any other case, the amount of the rebate under section 259 that the particular person is entitled to claim in respect of the complex.

Transitional rebate

(4) If a cooperative housing corporation

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into on or before May 2, 2006, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the corporation on or after July 1, 2006,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(c) is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection or under section 256.2 or 259, in respect of the tax referred to in paragraph (b),

the Minister shall, subject to subsection (7), pay a rebate to the corporation equal to the amount determined by the formula

A x [0.01 - ((B/A)/7)]

where

A is the consideration payable for the supply, and

B is

(i) if the corporation is entitled to claim a rebate under section 259 in respect of the complex,

(A) in the case where the complex is situated in a participating province, the amount of the rebate under section 259 that the corporation would have been entitled to claim if no tax under subsection 165(2) would have been payable or paid in respect of the complex, and

(B) in any other case, the amount of the rebate under section 259 that the corporation is entitled to claim in respect of the complex,

(ii) 36% of the tax paid under subsection 165(1) by the corporation in respect of the supply if the corporation is not entitled to claim a rebate under section 259 in respect of the complex, and

(A) the corporation is entitled to, or can reasonably expect to be entitled to, claim a rebate under section 256.2 in respect of any residential unit situated in the complex, or

(B) it is the case that, or it can reasonably be expected that, a share of the capital stock of the corporation is or will be sold to an individual for the purpose of using a residential unit in the complex as the primary place of residence of the individual, or of a relation (as defined in subsection 255(1)) of the individual, and that the individual is or will be entitled to claim a rebate under section 255 in respect of the share, and

(iii) in any other case, zero.

Transitional rebate

(5) If a particular individual

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into on or before May 2, 2006, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the particular individual on or after July 1, 2006,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(c) is entitled to claim a rebate under subsection 254(2) in respect of the complex,

the Minister shall, subject to subsection (7), pay a rebate to the particular individual equal to the amount determined by the formula

A x [0.01 - ((B/A)/7)]

where

A is the total of all amounts, each of which is the consideration payable for the supply to the particular individual of the complex or for any other taxable supply to the particular individual of an interest in the complex in respect of which the particular individual has paid tax under subsection 165(1) calculated at the rate of 7%, and

B is the amount of the rebate under subsection 254(2) that the particular individual is entitled to claim in respect of the complex.

Group of individuals

(6) If a supply of a residential complex is made to two or more individuals, the references in subsection (5) to a particular individual shall be read as references to all of those individuals as a group, but only the particular individual that applied for the rebate under section 254 may apply for the rebate under subsection (5).

Application for rebate

(7) A rebate under this section in respect of a residential complex shall not be paid to a person unless the person files an application for the rebate within two years after the day that ownership of the complex is transferred to the person.

Transitional rebate where section 254.1 applies

256.4 (1) If

(a) under an agreement, evidenced in writing, entered into on or before May 2, 2006 between a particular person and a builder of a residential complex that is a single unit residential complex or a residential condominium unit, the particular person is the recipient of

(i) an exempt supply by way of lease of the land forming part of the complex or an exempt supply of such a lease by way of assignment, and

(ii) an exempt supply by way of sale of the building or part of it in which the residential unit forming part of the complex is situated,

(b) possession of the complex is given to the particular person under the agreement on or after July 1, 2006,

(c) the builder is deemed under subsection 191(1) to have made and received a supply of the complex as a consequence of giving possession of the complex to the particular person under the agreement and to have paid tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(d) the particular person is entitled to claim a rebate under subsection 254.1(2) in respect of the complex,

the Minister shall, subject to subsection (4),

(e) pay a rebate to the particular person equal to the amount determined by the formula

A x [0.01 - ((B/A)/7)]

where

A is the amount determined by the formula

C x (100/D)

where

C is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of the building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex, other than consideration that can reasonably be regarded as rent for the supplies of the land attributable to the complex or as consideration for the supply of an option to purchase that land,

D is

(i) if the complex is situated in a participating province, 115, and

(ii) in any other case, 107, and

B is the amount of the rebate under subsection 254.1(2) that the particular person is entitled to claim in respect of the complex; and

(f) if the builder is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection or under subsection 256.2(4), in respect of the tax referred to in paragraph (c), pay a rebate to the builder equal to the amount determined by the formula

(E - F) x [0.01 - ((G/(E - F))/7)]

where

E is the fair market value of the complex at the time that the builder is deemed to have made the supply referred to in paragraph (c),

F is the amount determined for A under paragraph (e), and

G is the amount of the rebate, if any, that the builder is entitled to claim under subsection 256.2(4).

Transitional rebate where section 254.1 does not apply

(2) If

(a) under an agreement, evidenced in writing, entered into on or before May 2, 2006 between a particular person and a builder of a residential complex that is a single unit residential complex or a residential condominium unit, the particular person is the recipient of

(i) an exempt supply by way of lease of the land forming part of the complex or an exempt supply of such a lease by way of assignment, and

(ii) an exempt supply by way of sale of the building or part of it in which the residential unit forming part of the complex is situated,

(b) possession of the complex is given to the particular person under the agreement on or after July 1, 2006,

(c) the builder is deemed under subsection 191(1) to have made and received a supply of the complex as a consequence of giving possession of the complex to the particular person under the agreement and to have paid tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(d) the particular person is not entitled to claim a rebate under subsection 254.1(2) in respect of the complex;

the Minister shall, subject to subsection (4),

(e) pay a rebate to the particular person equal to the amount determined by the formula

A/B

where

A is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of the building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex, other than consideration that can reasonably be regarded as rent for the supplies of the land attributable to the complex or as consideration for the supply of an option to purchase that land, and

B is

(i) if the complex is situated in a participating province, 115, and

(ii) in any other case, 107; and

(f) if the builder is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection, in respect of the tax referred to in paragraph (c), pay a rebate to the builder equal to the amount determined by the formula

0.01 x [C - (D x (100 / E))]

where

C is the fair market value of the complex at the time the builder is deemed to have made the supply referred to in paragraph (c),

D is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of the building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex, other than consideration that can reasonably be regarded as rent for the supplies of the land attributable to the complex or as consideration for the supply of an option to purchase that land, and

E is

(i) if the complex is situated in a participating province, 115, and

(ii) in any other case, 107.

Group of individuals

(3) If the supplies described in subsection (1) or (2) are made to two or more individuals, the references in that subsection to a particular person shall be read as references to all of those individuals as a group, but, in the case of a rebate where paragraph (1)(e) applies, only the individual that applied for the rebate under section 254.1 may apply for the rebate under subsection (1).

Application for rebate

(4) A rebate under this section in respect of a residential complex shall not be paid to a person unless the person files an application for the rebate within two years after

(a) in the case of a rebate to a person other than the builder of the complex, the day possession of the complex is transferred to the person, and

(b) in the case of a rebate to the builder of the complex, the end of the month in which the tax referred to in paragraph (1)(c) or (2)(c) is deemed to have been paid by the builder.

Transitional rebate for purchaser

256.5 (1) Where

(a) under an agreement, evidenced in writing, entered into between a particular person and a builder of a residential complex or of an addition to it, other than a single unit residential complex or a residential condominium unit, the particular person is the recipient of

(i) an exempt supply by way of lease of the land forming part of the complex or an exempt supply of such a lease by way of assignment, and

(ii) an exempt supply by way of sale of the building or part of it in which a residential unit forming part of the complex or of the addition is situated,

(b) possession of a residential unit forming part of the complex or of the addition is given to the particular person under the agreement on or after July 1, 2006,

(c) the builder is deemed under subsection 191(3) or (4) to have made and received a supply of the complex or of the addition as a consequence of giving possession

(i) of the residential unit to the particular person under the agreement, or

(ii) of a residential unit forming part of the complex or of the addition to another person under an agreement described in paragraph (a) entered into between the other person and the builder,

(d) the builder is deemed to have paid tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(e) if the builder is deemed to have paid the tax referred to in paragraph (d) on or after July 1, 2006, it is the case that the builder and

(i) the particular person entered into the agreement on or before May 2, 2006, or

(ii) a person, other than the particular person, entered into an agreement described in paragraph (a) in respect of a residential unit situated in the residential complex or in the addition that the builder is deemed to have supplied (as described in paragraph (c)) on or before May 2, 2006 and that agreement was not terminated before July 1, 2006,

the Minister shall, subject to subsection (3),

(f) if the particular person is entitled to claim a rebate under subsection 254.1(2) in respect of the complex, pay a rebate to the particular person equal to the amount determined by the formula

A x [0.01 - ((B/A)/7)]

where

A is the amount determined by the formula

C x (100/D)

where

C is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of the building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex or of the addition, other than consideration that can reasonably be regarded as rent for the supplies of the land attributable to the complex or as consideration for the supply of an option to purchase that land, and

D is

(i) if the complex is situated in a participating province, 115, and

(ii) in any other case, 107, and

B is the amount of the rebate under subsection 254.1 that the particular person is entitled to claim in respect of the complex, and

(g) if the particular person is not entitled to claim a rebate under subsection 254.1(2) in respect of the complex, pay a rebate to the particular person equal to the amount determined by the formula

E/F

where

E is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of a building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex or of the addition, other than consideration that can reasonably be regarded as rent for the supplies of the land attributable to the complex or as consideration for the supply of an option to purchase that land, and

F is

(i) if the complex is situated in a participating province, 115, and

(ii) in any other case, 107.

Group of individuals

(2) If the supplies described in subsection (1) are made to two or more individuals, the references in that subsection to a particular person shall be read as references to all of those individuals as a group, but, in the case of a rebate under paragraph (1)(f), only the individual that applied for the rebate under section 254.1 may apply for the rebate under that paragraph.

Application for rebate

(3) A rebate under this section in respect of a residential complex shall not be paid to a person unless the person files an application for the rebate within two years after the day possession of the unit referred to in paragraph (1)(b) is transferred to the person.

Transitional rebate for builder

256.6 (1) If

(a) under an agreement, evidenced in writing, entered into between a particular person and a builder of a residential complex, other than a single unit residential complex or a residential condominium unit, or of an addition to it the particular person is the recipient of

(i) an exempt supply by way of lease of the land forming part of the complex or a supply of such a lease by way of assignment, and

(ii) an exempt supply by way of sale of the building or part of it in which a residential unit forming part of the complex or of the addition is situated,

(b) the builder is deemed under subsection 191(3) or (4) to have made and received on or after July 1, 2006 a supply of the complex or of the addition as a consequence of giving possession

(i) of the residential unit to the particular person under the agreement, or

(ii) of a residential unit forming part of the complex or of the addition to another person under an agreement described in paragraph (a) entered into between the other person and the builder,

(c) the builder and

(i) the particular person entered into the agreement on or before May 2, 2006, or

(ii) a person, other than the particular person, entered into an agreement described in paragraph (a) in respect of a residential unit situated in the residential complex or in the addition that the builder is deemed to have supplied (as described in paragraph (b)) on or before May 2, 2006 and that agreement was not terminated before July 1, 2006,

(d) the builder is deemed to have paid tax under subsection 165(1) in respect of the supply referred to in paragraph (b) at the rate of 7%; and

(e) the builder is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection or under subsection 256.2(4), in respect of the tax referred to in paragraph (d),

the Minister shall, subject to subsection (2), pay a rebate to the builder equal to the amount determined by the formula

A x [0.01 - ((B/A)/7)]

where

A is the amount determined by the formula

C - [D x (100/E)]

where

C is the fair market value of the complex at the time the builder is deemed to have made the supply referred to in paragraph (b),

D is

(i) if the builder is deemed to have made a supply of a complex, the total of all amounts, each of which is the consideration payable by a person to the builder for the supply by way of sale to the person of the building or part of it forming part of the complex or of any other structure that forms part of the complex, or

(ii) if the builder is deemed to have made a supply of an addition, the total of all amounts, each of which is the consideration payable by a person to the builder for the supply by way of sale to the person of the building or part of it forming part of the addition or of any other structure that forms part of the addition, and

E is

(i) if the complex is situated in a participating province, 115, and

(ii) in any other case, 107, and

B is the rebate, if any, under subsection 256.2(4) that the builder is entitled to claim in respect of the complex, or, if the builder is deemed to have made a supply of an addition, of the addition.

Application for rebate

(2) A rebate under this section in respect of a residential complex or of an addition to it shall not be paid to a person, unless the person files an application for the rebate within two years after the end of the month in which tax referred to subsection (1) is deemed to have been paid by the person.

Non-registrant sale of real property

257. (1) If a person who is not a registrant makes a particular taxable supply of real property by way of sale, the Minister shall, subject to subsections (1.1) and (2), pay a rebate to the person equal to the lesser of

Limitation

(1.1) If the particular taxable supply referred to in subsection (1) is made at a particular time by a public sector body to another person with whom the public sector body is not dealing at arm’s length, the rebate under subsection (1) shall not exceed the lesser of

(a) the basic tax content of the property at the particular time; and

(b) the amount determined by the formula

(A/B) x C

where

A is the basic tax content of the property at the particular time,

B is the amount that would be the basic tax content of the property at that time if that amount were determined without reference to the description of B in paragraph (a) and the description of K in paragraph (b) of the definition "basic tax content" in subsection 123(1), and

C is the tax that is or would, in the absence of section 167, be payable in respect of the particular taxable supply.

(ii) tax deemed under subsection 129(6), 129.1(4), 171(3) or 183(4), or section 191 to have been collected during the period by the person in respect of the property or service,

Rate change — variation of agreement

274.1 If

(a) at any time before July 1, 2006, a supplier and a recipient enter into an agreement for a taxable supply of property or a service,

(b) the supplier and the recipient at a later time either directly or indirectly

(i) vary or alter the agreement for the supply, or

(ii) terminate the agreement and enter into one or more new agreements with each other or with other persons where under one or more of those agreements the supplier supplies, and the recipient receives, one or more supplies that includes all or substantially all the property or service referred to in paragraph (a),

(c) the supplier, the recipient and the other persons are not dealing with each other at arm’s length at the time the agreement is entered into or at the later time,

(d) tax under subsection 165(1) or section 218 in respect of the supply referred to in paragraph (a) would have been calculated at the rate of 7% on all or part of the value of the consideration for the supply attributable to the property or service in the absence of the variation, alteration or termination of the agreement,

(e) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements would, in the absence of this section, be calculated at the rate of 6% on any part of the value of the consideration for the supply, attributable to any part of the property or service, on which tax, in respect of the supply referred to in paragraph (a), was initially calculated at the rate of 7%, and

(f) the variation or alteration of the agreement or the entering into of the new agreements may not reasonably be considered for both the supplier and the recipient to have been undertaken or arranged primarily for bona fide purposes other than to benefit in any manner from the rate change,

the following rule applies

(g) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements shall be calculated at the rate of 7% on any part of the value of the consideration, referred to in paragraph (e), for the supply attributable to any part of the property or service.

Definitions

274.2 (1) The following definitions apply in this section.

"person"

"person" does not include a consumer.

"rate change"

"rate change" means any change in any rate of tax imposed under this Part.

"tax benefit"

"tax benefit" means a reduction, an avoidance or a deferral of tax or other amount payable under this Part or an increase in a refund or rebate of tax or other amount under this Part.

"transaction"

"transaction" has the meaning assigned by subsection 274(1).

Rate change — transactions

(2) If

(a) a transaction, or a series of transactions, involving property is made between two or more persons, all of whom are not dealing with each other at arm’s length at the time any of those transactions are made,

(b) the transaction, any of the transactions in the series of transactions or the series of transactions would in the absence of this section result directly or indirectly in a tax benefit to one or more of the persons involved in the transaction or series of transactions, and

(c) it may not reasonably be considered that the transaction, or the series of transactions, has been undertaken or arranged primarily for bona fide purposes other than to obtain a tax benefit, arising from a rate change, for one or more of the persons involved in the transaction or series of transactions,

the amount of tax, net tax, input tax credit, rebate or other amount payable by, or refundable to, any of those persons under this Part, or any other amount that is relevant to the purposes of computing that amount shall be determined as is reasonable in the circumstances in order to deny the tax benefit to any of those persons.

Denying tax benefit on transactions

(3) Despite any other provisions of this Part, a tax benefit shall only be denied under subsection (2) through an assessment, reassessment or additional assessment.

Request for adjustments

(4) If, with respect to a transaction, a notice of assessment, reassessment or additional assessment involving the application of subsection (2) with respect to the transaction has been sent to a person, any person (other than a person to whom such a notice has been sent) shall be entitled, within one hundred and eighty days after the day of mailing of the notice, to request in writing that the Minister make an assessment, a reassessment or an additional assessment, applying subsection (2) with respect to that transaction.

Duties of Minister

(5) On receipt of a request by a person under subsection (4), the Minister shall, with all due dispatch, consider the request and, despite subsections 298(1) and (2), assess, reassess or make an additional assessment with respect to the person, except that an assessment, a reassessment or an additional assessment may be made under this subsection only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection (4).

(3) Section 274.2 of the Act, as enacted by subsection (1), applies to any transaction made on or after May 2, 2006.

Part II—Excise Act, 2001
(Tobacco Products)

Excise Act, 2001

PART 3.1
TOBACCO PRODUCTS INVENTORY TAX

Definitions

58.1 The definitions in this section apply in this Part.

"loose tobacco"

"loose tobacco" means loose, fine-cut manufactured tobacco for use in making cigarettes.

"separate retail establishment"

"separate retail establishment" of a person means a shop or store of the person

(a) that is geographically separate from other places of business of the person;

(b) at which, in the ordinary course of the person’s business, the person regularly sells, otherwise than through vending machines, tobacco products to consumers, within the meaning of section 123 of the Excise Tax Act, attending at the shop or store; and

(c) in respect of which separate records are maintained.

"taxed tobacco"

"taxed tobacco" of a person means cigarettes, tobacco sticks, loose tobacco and cigars, in respect of which duty has been imposed under section 42 before July 1, 2006 at a rate set out in paragraph 1(b), 2(b) or 3(b) of Schedule 1 or in section 4 of that Schedule, as those provisions read on June 30, 2006, and that, at the beginning of July 1, 2006,

(a) were owned by that person for sale in the ordinary course of a business of the person;

(b) were not held in a vending machine; and

(c) were not relieved from that duty under this Act.

"unit"

"unit" means one cigarette, tobacco stick, gram of loose tobacco or cigar.

Imposition of tax

58.2 Subject to section 58.3, every person shall pay to Her Majesty a tax on all taxed tobacco of the person at the rate of

(a) 0.2799 cent per cigarette;

(b) 0.2517 cent per tobacco stick;

(c) 0.1919 cent per gram of loose tobacco; and

(d) 0.1814 cent per cigar.

Exemption for small retail inventory

58.3 Tax under this Part in respect of the inventory of all taxed tobacco of a person that is held at the beginning of July 1, 2006 at a separate retail establishment of the person is not payable if that retail establishment holds inventory of 30,000 or fewer units.

Taking of inventory

58.4 Every person liable to pay tax under this Part shall, for the purposes of this Part, determine that person’s inventory of all taxed tobacco.

Returns

58.5 (1) Every person liable to pay tax under this Part shall, on or before August 31, 2006, file a return with the Minister in the prescribed form and manner.

Separate returns

(2) A person authorized under subsection 239(2) of the Excise Tax Act to file separate returns in respect of a separate branch or division may file separate returns under this Part in respect of that branch or division.

Payment

58.6 (1) Every person shall pay to the Receiver General the total tax payable by the person under this Part on or before August 31, 2006.

Minimum interest

(2) No interest in respect of an amount payable by a person under this Part is payable if, at the time the person pays the amount, the total of that interest otherwise payable is less than $25.

Extension

(3) The Minister may at any time extend in writing the time for filing a return, or paying the tax payable, under this Part and, where the Minister so extends the time,

(a) the return shall be filed or tax payable shall be paid within the time as so extended; and

(b) interest is payable under section 170 as if the time had not been extended.

(i) $0.165 multiplied by the number of cigarettes to which the offence relates,

(ii) $0.121 multiplied by the number of tobacco sticks to which the offence relates,

(iii) $0.112 multiplied by the number of grams of manufactured tobacco other than cigarettes or tobacco sticks to which the offence relates, and

(iv) $0.284 multiplied by the number of cigars to which the offence relates, and

(i) $0.246 multiplied by the number of cigarettes to which the offence relates,

(ii) $0.182 multiplied by the number of tobacco sticks to which the offence relates,

(iii) $0.168 multiplied by the number of grams of manufactured tobacco other than cigarettes or tobacco sticks to which the offence relates, and

(iv) $0.66 multiplied by the number of cigars to which the offence relates, and

(a) $0.355548 per cigarette that was removed in contravention of that subsection,

(b) $0.205 per tobacco stick that was removed in contravention of that subsection, and

(c) $203.804 per kilogram of manufactured tobacco, other than cigarettes and tobacco sticks, that was removed in contravention of that subsection.

(b) $0.41025 for each five cigarettes or fraction of five cigarettes contained in any package, in any other case.

(b) $0.0605 per stick, in any other case.

(b) $55.90 per kilogram, in any other case.

4. Cigars: $16.60 per 1,000 cigars.

(a) $0.066 per cigar, and

(b) 66%, computed on

Application

Part III—Excise Act and Excise Act, 2001 (Alcohol Products)

Excise Act

1. On all beer or malt liquor containing more than 2.5% absolute ethyl alcohol by volume, $31.22 per hectolitre.

2. On all beer or malt liquor containing more than 1.2% absolute ethyl alcohol by volume but not more than 2.5% absolute ethyl alcohol by volume, $15.61 per hectolitre.

Excise Act, 2001

(i) $11.696 multiplied by the number of litres of absolute ethyl alcohol in the spirits to which the offence relates,

(ii) $0.62 multiplied by the number of litres of wine to which the offence relates, and

(i) $23.392 multiplied by the number of litres of absolute ethyl alcohol in the spirits to which the offence relates,

(ii) $1.24 multiplied by the number of litres of wine to which the offence relates, and

(i) $23.392 multiplied by the number of litres of absolute ethyl alcohol in the spirits to which the offence relates, and

(ii) $1.24 multiplied by the number of litres of wine to which the offence relates, and

(i) $35.088 multiplied by the number of litres of absolute ethyl alcohol in the spirits to which the offence relates, and

(ii) $1.86 multiplied by the number of litres of wine to which the offence relates, and

Contravention of section 72

242. Every person who contravenes section 72 is liable to a penalty equal to $1.24 per litre of wine to which the contravention relates.

(b) if the contravention relates to wine, $0.62 per litre of that wine.

1. Spirits: $11.696 per litre of absolute ethyl alcohol contained in the spirits.

2. Spirits containing not more than 7% absolute ethyl alcohol by volume: $0.295 per litre of spirits.

(b) in the case of wine that contains more than 1.2% of absolute ethyl alcohol by volume but not more than 7% of absolute ethyl alcohol by volume, $0.295 per litre; and

(c) in the case of wine that contains more than 7% of absolute ethyl alcohol by volume, $0.62 per litre.

Application

Part IV—Air Travellers Security Charge Act

(a) $4.67 for each chargeable emplanement included in the service, to a maximum of $9.34, if

(b) $4.95 for each chargeable emplanement included in the service, to a maximum of $9.90, if

(d) $8.42 for each chargeable emplanement included in the service, to a maximum of $16.84, if

(b) $8.42 for each chargeable emplanement by an individual on an aircraft used to transport the individual to a destination outside Canada but within the continental zone, to a maximum of $16.84, if

Notice of Ways and Means Motion to amend the Excise Tax Act, the Excise Act, 2001, the Excise Act and the Air Travellers Security Charge Act relating to other sales tax measures

That it is expedient to amend the Excise Tax Act, the Excise Act, 2001, the Excise Act and the Air Travellers Security Charge Act to provide among other things:

Excise Tax on Jewellery

(1) That sections 5, 5.1 and 5.2 of Schedule I to the Excise Tax Act be repealed effective May 2, 2006.

Excise Duties for Vintners and Small Brewers

(2) That the provisions of the Excise Act, 2001 and the Excise Act relating to excise duties on wine and beer be modified for vintners and small brewers in accordance with the proposals described in the budget documents tabled by the Minister of Finance in the House of Commons on May 2, 2006.

Administrative Provisions (Standardized Accounting)

(3) That the provisions of the Excise Tax Act, the Excise Act, 2001 and the Air Travellers Security Charge Act relating to accounting, interest, penalties and administration and enforcement be modified in accordance with the harmonization proposals described in the budget documents tabled by the Minister of Finance in the House of Commons on May 2, 2006.

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:

(1) That,

(a) for the 2005 taxation year, the calculation of an individual’s tax payable under Part I of the Act be modified to set the tax rate applicable to the portion of the individual’s taxable income that is equal to or less than $35,595 at 15% and that, as a result, the "appropriate percentage" used in computing the individual’s non-refundable personal tax credits and alternative minimum tax reflect this rate for that taxation year;

(b) for the 2006 taxation year, the calculation of an individual’s tax payable under Part I of the Act be modified to set the tax rate applicable to the portion of the individual’s taxable income that is equal to or less than $36,378 at 15.25%, and that, as a result, the "appropriate percentage" used in computing the individual’s non-refundable personal tax credits and alternative minimum tax reflect this rate for that taxation year; and

(c) for the 2007 and subsequent taxation years, the calculation of an individual’s tax payable under Part I of the Act be modified to set the tax rate applicable to the portion of the individual’s taxable income that is equal to or less than $36,378 (as indexed for the 2007 and subsequent taxation years) at 15.5%, and that, as a result, the "appropriate percentage" used in computing the individual’s non-refundable personal tax credits and alternative minimum tax reflect this rate for those taxation years.

(2) That,

(a) for the 2005 taxation year, the basic personal amount be $8,648;

(b) for the 2006 taxation year, the basic personal amount be $8,839, except that, for the purpose of determining the basic personal amount for the 2007 taxation year, this amount be read as $8,639 for the 2006 taxation year;

(c) for the 2007 taxation year, the basic personal amount be determined by adding $100 to the amount otherwise determined (having regard to subparagraph (b)) to be the basic personal amount for the 2007 taxation year;

(d) for the 2008 taxation year, the basic personal amount be determined by adding $200 to the amount otherwise determined (having regard to subparagraph (c)) to be the basic personal amount for the 2008 taxation year;

(e) for the 2009 taxation year, the basic personal amount be determined by adding the greater of $600 and the amount necessary to bring the basic personal amount to $10,000 to the amount otherwise determined (having regard to subparagraph (d)) to be the basic personal amount for the 2009 taxation year; and

(f) for the 2010 and subsequent taxation years, the basic personal amount be determined by applying indexation to the amount otherwise determined (having regard to subparagraph (e)) to be the basic personal amount for the immediately preceding taxation year.

(3) That,

(a) for the 2005 taxation year, each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative be $7,344;

(b) for the 2006 taxation year, each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative be $7,505, except that for the purpose of determining each of those amounts for the 2007 taxation year, this amount be read as $7,335 for the 2006 taxation year;

(c) for the 2007 taxation year, each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative be determined by adding $85 to the amounts otherwise determined (having regard to subparagraph (b)) for each of those amounts for the 2007 taxation year;

(d) for the 2008 taxation year, each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative be determined by adding $170 to the amounts otherwise determined (having regard to subparagraph (c)) for each of those amounts for the 2008 taxation year;

(e) for the 2009 taxation year, each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative be determined by adding the greater of $510 and the amount required to bring each of those amounts to $8,500 to the amounts otherwise determined (having regard to subparagraph (d)) for each of those amounts for the 2009 taxation year; and

(f) for the 2010 and subsequent taxation years, each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative be determined by applying indexation to the amount otherwise determined (having regard to subparagraph (e)) to be each of those amounts for the immediately preceding taxation year.

(4) That,

(a) for the 2005 taxation year, the net income threshold for each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative be $734;

(b) for the 2006 taxation year, the net income threshold for each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative be $751, except that for the purpose of determining each of those amounts for 2007, the net income threshold for those amounts be read as $734 for the 2006 taxation year;

(c) for the 2007 taxation year, the net income threshold for each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative be determined by adding $8.50 to the amount otherwise determined (having regard to subparagraph (b)) to be the net income threshold for those amounts for the 2007 taxation year;

(d) for the 2008 taxation year, the net income threshold for each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative be determined by adding $17 to the amount otherwise determined (having regard to subparagraph (c)) to be the net income threshold for those amounts for the 2008 taxation year; and

(e) for the 2009 taxation year, the net income threshold for each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative be determined by adding the greater of $51 and the amount required to bring that threshold to $850, to the amount otherwise determined (having regard to subparagraph (d)) to be the net income threshold for those amounts the 2009 taxation year; and

(f) for the 2010 and subsequent taxation years, the net income threshold for each of the spouse or common-law partner amount and the equivalent amount for a wholly dependent relative be determined by applying indexation to the amount otherwise determined (having regard to subparagraph (e)) to be the net income threshold for those amounts for the immediately preceding taxation year.

(5) That,

(a) for the 2006 taxation year, an individual be entitled to deduct, in computing tax payable under Part I of the Act for the year, an amount equal to the product obtained when the lesser of the individual’s employment income for the taxation year and $250 is multiplied by the appropriate percentage for the taxation year; and

(b) for the 2007 and subsequent taxation years, an individual be entitled to deduct, in computing tax payable under Part I of the Act for the year, an amount equal to the product obtained when the lesser of the individual’s employment income for the taxation year and $1000 (indexed for taxation years after 2007) is multiplied by the appropriate percentage for the taxation year.

(6) That the Act be modified consequential on the introduction of the Universal Child Care Benefit in accordance with proposals described in the budget documents tabled by the Minister of Finance in the House of Commons on May 2, 2006.

(7) That, for a disposition on or after May 2, 2006 by an individual (including, in certain circumstances, a personal trust) of a fishing property, a share of the capital stock of a family fishing corporation, an interest in a family fishing partnership or a qualified fishing property, the provisions of the Act relating to eligible capital property gains, capital gains reserves, replacement property rollovers, intergenerational rollovers from an individual to a child of the individual, trust rollovers from a spousal or common-law partner trust of an individual to a child of the individual and the lifetime capital gains exemption be modified to provide rules applicable in respect of such a disposition that are similar to the rules that apply in respect of dispositions by individuals of a farm property, a share of the capital stock of a family farm corporation, an interest in a family farm partnership or a qualified farm property, respectively, of the individual, and that, for this purpose

(a) "fishing property" of an individual be determined, for the purposes of rules dealing with the capital gains reserves, replacement property rollovers, intergenerational rollovers from an individual to a child of the individual and trust rollovers from a spousal or common-law partner trust of an individual to a child of the individual, by reference to land, depreciable property and eligible capital property that is used principally in a fishing business carried on in Canada in which the individual, or the individual’s spouse or common-law partner, parent, child or grandchild, was actively engaged on a regular and continuous basis;

(b) "share of the capital stock of a family fishing corporation" and "interest in a family fishing partnership" and any related terms be defined in respect of an individual, for the purposes of rules dealing with intergenerational rollovers of such property from the individual to a child of the individual and trust rollovers from a spousal or common-law partner trust of an individual to a child of the individual, in a manner similar to the manner in which the existing definitions "share of the capital stock of family farm corporation" and "interest in a family farm partnership" and the related terms are defined in respect of an individual for those purposes;

(c) "qualified fishing property" be defined, for the purposes of the lifetime capital gains exemption, in respect of an individual to include real property (or for Civil Law, immoveables), fishing vessels and eligible capital property used principally in a fishing business carried on in Canada in which the individual, or the individual’s spouse or common-law partner, parent, child or grandchild, was actively engaged on a regular and continuous basis; and

(d) "share of the capital stock of a family fishing corporation" and "interest in a family fishing partnership" and any related terms be defined, for the purposes of the lifetime capital gains exemption, in respect of an individual in a manner similar to the manner in which the existing definitions "share of the capital stock of family farm corporation" and "interest in a family farm partnership" and the related terms are defined, for those purposes.

(8) That, for flow-through share agreements made on or after May 2, 2006 and on or before March 31, 2007, the definition "flow-through mining expenditure" in subsection 127(9) of the Act include expenses otherwise described in that definition that are incurred, or deemed by subsection 66(12.66) of the Act to have been incurred, before 2008.

(9) That, for eligible tools acquired on or after May 2, 2006,

(a) there may be deducted, in computing the income of an individual from employment as a tradesperson in a taxation year an amount not exceeding the lesser of

(i) $500, and

(ii) the amount, if any, determined by the formula

A – $1,000 (indexed after 2007)

where

A is the lesser of

(A) the total cost to the individual to acquire in the year one or more tools that is an eligible tool, and

(B) the amount otherwise determined to be individual’s income from employment as a tradesperson in the year; and

(b) for the purposes of this paragraph and paragraph (10), an "eligible tool" be a tool (including ancillary equipment) that

(i) was not used for any purpose whatsoever before it is acquired by the individual,

(ii) is certified by the individual’s employer in prescribed form to be required as a condition of, and for use in, the individual’s employment as a tradesperson in the year, and

(iii) is, unless the device or equipment can be used only for the purpose of measuring, locating or calculating, not an electronic communication device or electronic data processing equipment.

(10) That, where the cost of a property is included in computing an individual’s deduction for eligible tools acquired in a taxation year,

(a) for all other purposes of the Act, the individual’s cost of all such property acquired in the taxation year be reduced pro rata by the amount of the individual’s deduction in respect of such property for the year; and

(b) if the property is disposed of by the individual (or by a person with whom the individual does not deal at arm’s length or by a corporation or partnership that acquired the property from any such person in a transaction to which subsection 85(1) or 97(2) of the Act applied), the amount, if any, by which the proceeds of disposition of the property exceed the cost of the property, as adjusted by subparagraph (a), be included in computing the income of the individual or of the person, corporation or partnership, as the case may be, for the taxation year in which the disposition occurs.

(11) That the Act be amended to replace, for the 2007 and subsequent taxation years, the reference to "$1,000" in the description of B in subparagraph 8(1)(r)(ii) of the Act with a reference to "the total of $500 and the amount on which the Canada Employment Credit for the taxation year is calculated".

(12) That, for the 2006 and subsequent taxation years, an individual who is entitled to the education tax credit for a taxation year be entitled to claim a textbook tax credit for the year equal to the product obtained when the appropriate percentage for the year is multiplied by $65 for each month in the year in which the individual was entitled to claim the education tax credit as a full-time student, or $20 for each month in the year in which the individual was entitled to claim the education tax credit as a part-time student.

(13) That, for the 2006 and subsequent taxation years, the total of all amounts received in the year by an individual on account of scholarships, fellowships, and bursaries be excluded from income, if these amounts are received by the individual in connection with the individual’s enrolment at a designated educational institution in a program in respect of which the individual may claim the education tax credit.

(14) That, for the 2006 and subsequent taxation years, the amount of eligible pension income on which the pension tax credit is calculated be increased to $2,000.

(15) That,

(a) for benefits paid after June 2006, the provisions of the Act relating to benefits payable under the Canada Child Tax Benefit – Child Disability Benefit be modified to increase the Child Disability Benefit to $2,300 in respect of each child who is eligible for the disability tax credit; and

(b) for benefits paid after June 2006, the threshold for the phase-out of this benefit be modified in accordance with proposals described in the budget documents tabled by the Minister of Finance in the House of Commons on May 2, 2006.

(16) That,

(a) for the 2006 and subsequent taxation years, the maximum refundable medical expense supplement described in subsection 122.51(2) of the Act be increased to $1,000; and

(b) for the 2005 and subsequent taxation years, the income threshold at which the refundable medical expense supplement described in subsection 122.51(2) of the Act begins to be phased-out be set at $21,663 (indexed).

(17) That, for the 2006 and subsequent taxation years, an individual be entitled to deduct, in computing tax payable under Part I of the Act for the year, an amount equal to the product obtained when the appropriate percentage for the year is multiplied by the total of all amounts paid in the year in respect of eligible public transit passes (in respect of transit on or after July 1, 2006) for the use of the individual, the individual’s spouse or common-law partner, or a child of the individual who has not before the end of the taxation year attained the age of 19 years (to the extent that the amounts are not included in computing this tax credit by any other individual for the taxation year) and, for this purpose, an eligible public transit pass be a public transit pass that is valid for a period of at least one month of public transit.

(18) That, for gifts made on or after May 2, 2006,

(a) a taxpayer’s taxable capital gain not include any portion of the capital gain from a gift to which paragraph 38(a.1) or (a.2) of the Act applies; and

(b) in determining the amount of the deduction permitted in paragraph 110(1)(d.01) of the Act in respect of an amount included in income from employment in respect of a donated security, the reference in that paragraph to "1/4" be replaced with a reference to "1/2".

(19) That the amount paid to an apprentice under the Apprenticeship Grant described in the budget documents tabled by the Minister of Finance in the House of Commons on May 2, 2006 be included in computing the apprentice’s income for the taxation year in which it is received.

(20) That

(a) the federal dividend gross-up be increased to 45 per cent and the dividend tax credit be adjusted to 11/18ths of the gross-up in respect of taxable dividends ("eligible dividends") paid after 2005 by

(i) public corporations resident in Canada (and any other resident corporations that are not Canadian-controlled private corporations (CCPCs) and are subject to the general corporate tax rate), and

(ii) CCPCs resident in Canada to the extent that their income (other than investment income) is subject to tax at the general corporate tax rate;

(b) special rules apply to ensure that eligible dividends are measured correctly where corporations resident in Canada become or cease to be subject to the small business tax rate or undergo reorganizations involving other corporations resident in Canada; and

(c) for these purposes,

(i) a corporation resident in Canada that would generally otherwise not be able to pay an eligible dividend, but that has received an eligible dividend, be permitted to pay an eligible dividend to the extent of the eligible dividend it has received, and

(ii) a corporation that would generally otherwise be able to pay an eligible dividend, but that has received a dividend (an "ineligible dividend"), from a corporation resident in Canada, that is not an eligible dividend, be required first to pay an ineligible dividend to the extent of the ineligible dividend it has received.

(21) 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 1.5 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 that is subject to the rate of corporate income tax applicable under section 123 of the Act (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.

(22) That, for taxation years that begin on or after May 2, 2006 the deduction under section 123.4(2) of the Act not be provided in respect of any taxable income for the year that is not subject to the rate of corporate income tax applicable under section 123 of the Act.

(23) 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.

(24) That the rules in subsections 125(2) and (3) of the Act determining the business limit of a Canadian-controlled private corporation (CCPC) be modified for taxation years that end after 2006 such that

(a) subject to subparagraph (b), the business limit of a CCPC for a taxation year be the total of

(i) that proportion of $300,000 that the number of days in the taxation year that are in 2006 is of the number of days in the taxation year, and

(ii) that proportion of $400,000 that the number of days in the taxation year that are after 2006 is of the number of days in the taxation year; and

(b) for the purpose of subsection 125(3) of the Act, associated CCPCs allocate a business limit for taxation years beginning after 2006 by allocating a total business limit of $400,000.

(25) That the references in the description of M in the definition "specified partnership income" in subsection 125(7) of the Act to $300,000 and $822 be replaced for fiscal periods of a partnership that end after 2006 with references to $400,000 and $1,096.

(26) That, for taxation years that end after 2006, in applying subsection 127(10.2) of the Act,

(a) the reference to "$5,000,000" in the formula in subsection 127(10.2) concerning a corporation’s expenditure limit for a particular taxation year be replaced with a reference to "$6,000,000"; and

(b) the reference to "$300,000" in the description of A in that formula be replaced with a reference to "$400,000".

(27) That the small business deduction under subsection 125(1) of the Act be adjusted for taxation years that end after 2007 such that the rate of federal income tax applied to income eligible for that deduction be

(a) that proportion of 12% that the number of days in the taxation year that are in 2007 is of the number of days in the taxation year;

(b) that proportion of 11.5% that the number of days in the taxation year that are in 2008 is of the number of days in the taxation year; and

(c) that proportion of 11% that the number of days in the taxation year that are after 2008 is of the number of days in the taxation year.

(28) That the 10 taxation year carry-forward period, in respect of non-capital losses, farm losses, restricted farm losses, losses applied under Part IV of the Act, and Canadian life investment losses under Part XII.3 of the Act incurred, and investment tax credits earned, in taxation years that end after 2005, be extended to 20 taxation years.

(29) That, for the 2006 and subsequent taxation years, a corporation’s specified percentage for the purpose of subsection 181.1(1) of the Act be (other than for the purposes of subsection 125(5.1) of the Act and the definition "unused surtax credit" in subsection 181.1(6) of the Act) that proportion of 0.175% that the number of days in the taxation year that are in 2005 is of the number of days in the taxation year.

(30) That, for the 2006 and subsequent taxation years, a corporation (other than a corporation described in subsection 181.1(3) of the Act) be treated as a large corporation for the purpose of subsection 225.1(8) of the Act if the total taxable capital employed in Canada at the end of the taxation year of the corporation (and of any related corporations) exceeds $10 million.

(31) That, for the 2006 and subsequent taxation years, a corporation that is a large corporation for the purpose of subsection 225.1(8) of the Act that fails to file a return described in section 235 of the Act for the taxation year be liable to pay a penalty under section 235 of the Act, for each complete month, not exceeding 40 months, during which the return is outstanding, equal to the total of

(a) 0.0005% of the corporation’s taxable capital employed in Canada for the taxation year; and

(b) 0.25% of the tax that would be payable by the corporation for the taxation year under Part VI if the Act were read without reference to its subsection 190.1(3).

(32) That, for taxation years that end on or after July 1, 2006, the minimum tax on financial institutions in Part VI of the Act be modified (other than for the purpose of calculating a financial institution’s "unused Part I tax credit" for carry-back to taxation years that end before July 1, 2006) by creating a single rate of tax of 1.25% and a single capital deduction of $1 billion, with proration for taxation years that begin before and include that date.

(33) That, for the 2006 and subsequent taxation years, a taxpayer who carries on a business in a taxation year be allowed to add in computing their investment tax credit at the end of the taxation year an amount in respect of each eligible apprentice employed in the business by the taxpayer in the taxation year and after May 2, 2006 equal to the lesser of $2,000 and 10% of eligible salary and wages payable by the taxpayer in respect of the employment, and that,

(a) subject to subparagraph (b), eligible salary and wages in respect of the employment of an eligible apprentice in a taxation year be the total of all amounts each of which is the amount of salary and wages payable by the taxpayer to the eligible apprentice in respect of the eligible apprentice’s employment in Canada in the taxation year and during the first 24 months of the apprenticeship, other than remuneration based on profits, bonuses, an amount described in section 6 or 7 of the Act, and amounts deemed to be incurred by subsection 78(4) of the Act;

(b) if an eligible apprentice is employed in a particular calendar year by the taxpayer and any other person who is related to the taxpayer (including a partnership that has a member that is related to the taxpayer), the eligible salary and wages incurred by the taxpayer in respect of that eligible apprentice be nil for the taxation year of the taxpayer that includes the end of that calendar year, unless the taxpayer is designated by all of those related persons to be the eligible employer of the eligible apprentice for the purpose of this investment tax credit;

(c) an eligible apprentice be an individual who is working in a prescribed trade in the first two years of the individual’s provincially registered apprenticeship contract; and

(d) a prescribed trade be a trade that is one of the 45 Red Seal Trades or a trade prescribed to be a trade that is in Canada’s strategic economic interest.

(34) That the provisions of the Act relating to accounting, interest, penalties and administration and enforcement be modified in accordance with the harmonization proposals described in the budget documents tabled by the Minister of Finance in the House of Commons on May 2, 2006.

(35) That, in accordance with proposals described in a Notice of Ways and Means Motion tabled in the House of Commons on November 17, 2005, a tax deferral be introduced in respect of certain dividends paid after 2005 in the form of eligible shares by an agricultural cooperative corporation.

(36) That, for the 2005 and subsequent taxation years, the eligibility criteria for the Disability Tax Credit be modified in accordance with proposals described in a Notice of Ways and Means Motion tabled in the House of Commons on November 17, 2005.

(37) That, for the 2005 and subsequent taxation years, the list of expenses eligible for the disability supports deduction be expanded in accordance with proposals described in a Notice of Ways and Means Motion tabled in the House of Commons on November 17, 2005.

(38) That, for the 2005 and subsequent taxation years, the list of expenses eligible for the medical expense tax credit be expanded in accordance with proposals described in a Notice of Ways and Means Motion tabled in the House of Commons on November 17, 2005.

(40) 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.

(41) That, for the 2005 and subsequent taxation years, an adoption expense tax credit be introduced in accordance with proposals described in a Notice of Ways and Means Motion tabled in the House of Commons on November 17, 2005.