Budget Implementation Act, 2023, No. 1 (S.C. 2023, c. 26)
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Assented to 2023-06-22
PART 1Amendments to the Income Tax Act and Other Legislation (continued)
R.S., c. 1 (5th Supp.)Income Tax Act (continued)
8 (1) Subparagraph 20(1)(e)(vi) of the Act is replaced by the following:
(vi) where a partnership has ceased to exist,
(A) no amount may be deducted by the partnership under this paragraph in computing its income for its last fiscal period, and
(B) there may be deducted for a taxation year ending after the time that is immediately before the end of the partnership’s last fiscal period (referred to in this clause as the “particular time”) by any person or partnership that was a member of the partnership at the particular time, that proportion of the amount that would, but for this subparagraph, have been deductible under this paragraph by the partnership in the fiscal period ending in the year had it continued to exist and had the partnership interest not been redeemed, acquired or cancelled, that the fair market value of the member’s interest in the partnership at the particular time is of the fair market value of all the interests in the partnership at the particular time;
(2) The description of N in subclause 20(1)(l)(ii)(D)(II) of the Act is replaced by the following:
- N
- is the total of all amounts each of which is the specified reserve adjustment for a loan (other than an income bond or an income debenture) for the year or a preceding taxation year;
(3) Paragraph 20(1)(v) of the Act is replaced by the following:
Marginal note:Mining taxes
(v) such amount as is allowed by regulation in respect of taxes on income from mining operations;
(4) The portion of subsection 20(14) of the Act before paragraph (a) is replaced by the following:
Marginal note:Accrued bond interest
(14) Where, by virtue of an assignment or other transfer of a debt obligation, other than an income bond or an income debenture, the transferee has become entitled to an amount of interest that accrued on the debt obligation for a period commencing before the time of transfer and ending at that time that is not payable until after that time, that amount
(5) The portion of subsection 20(14.1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Interest on debt obligation
(14.1) Where a person who has issued a debt obligation, other than an income bond or an income debenture, is obligated to pay an amount that is stipulated to be interest on that debt obligation in respect of a period before its issue (in this subsection referred to as the “unearned interest amount”) and it is reasonable to consider that the person to whom the debt obligation was issued paid to the issuer consideration for the debt obligation that included an amount in respect of the unearned interest amount,
(6) Subsection (1) is deemed to have come into force on June 26, 2013.
(7) Subsection (3) applies to taxation years that end after 2007. Any assessment of a taxpayer’s tax, interest and penalties payable under the Act for any taxation year that ends before August 9, 2022 that would, in the absence of this subsection, be precluded because of subsections 152(4) to (5) of the Act is to be made to the extent necessary to take into account subsection (3) and subsection 103(1) of this Act if the taxpayer so elects in writing and files that election with the Minister of National Revenue on or before the day that is six months after the day on which this section receives royal assent.
9 Paragraphs 44(1)(c) and (d) of the French version of the Act are replaced by the following:
c) si l’ancien bien est visé à l’alinéa a), avant la fin de la deuxième année d’imposition suivant l’année initiale ou, si elle est postérieure, avant la fin de la période de 24 mois qui suit l’année initiale;
d) sinon, avant la fin de la première année d’imposition suivant l’année initiale ou, si elle est postérieure, avant la fin de la période de 12 mois qui suit l’année initiale,
10 (1) Subparagraph (c.1)(iii.1) of the definition principal residence in section 54 of the Act is amended by striking out “or” at the end of clause (B), by replacing “and” with “or” at the end of clause (C) and by adding the following after clause (C):
(D) a trust
(I) a specified beneficiary of which for the year is a qualifying individual for the year in respect of the trust, and
(II) under which no person other than a beneficiary described in subclause (I) may receive or otherwise obtain the use of, during the beneficiary’s lifetime, any of the income or capital of the trust and the trustees are required to consider the needs of the beneficiary including, without limiting the generality of the foregoing, the comfort, care and maintenance of the beneficiary, and
(2) The definition principal residence in section 54 of the Act is amended by striking out “and” at the end of paragraph (e), by adding “and” at the end of paragraph (f) and by adding the following after paragraph (f):
(g) a qualifying individual, for a taxation year in respect of a trust, means an individual who meets the following conditions:
(i) the individual is, in the year, any of
(A) the settlor of the trust,
(B) the child, grandchild, great grandchild, parent, grandparent, great grandparent, brother, sister, uncle, aunt, niece or nephew of the settlor or of the spouse or common-law partner or former spouse or common-law partner of the settlor, and
(C) the spouse or common-law partner or former spouse or common-law partner of any person described in clause (A) or (B),
(ii) the individual is resident in Canada during the year, and
(iii) an amount is deductible, or would be deductible if this Act were read without reference to paragraph 118.3(1)(c), under subsection 118.3(1) in computing the individual’s tax payable under this Part for the year; (résidence principale)
(3) Subsections (1) and (2) apply to taxation years that begin after 2016.
11 (1) Paragraph 60(i) of the Act is replaced by the following:
Marginal note:Premium or payment under PRPP, RRSP or RRIF
(i) any amount that is deductible under section 146 or 146.3 or subsection 147.3(13.1) or 147.5(19) in computing the income of the taxpayer for the year;
(2) Paragraph 60(i) of the Act is replaced by the following:
Marginal note:Premium or payment – FHSA, PRPP, RRSP or RRIF
(i) any amount that is deductible under section 146, 146.3 or 146.6 or subsection 147.3(13.1) or 147.5(19) in computing the income of the taxpayer for the year;
(3) Subsection (1) is deemed to have come into force on December 14, 2012.
(4) Subsection (2) is deemed to have come into force on April 1, 2023.
12 (1) Paragraph 60.03(2)(a) of the Act is replaced by the following:
(a) the pensioner is deemed not to have received the portion of the pensioner’s pension income, qualified pension income or an amount described in subparagraph (c)(i) of the definition eligible pension income in subsection (1), as the case may be, for the taxation year that is equal to the amount of the pensioner’s split-pension amount for that taxation year; and
(2) Paragraph 60.03(2)(b) of the Act is amended by striking out “and” at the end of subparagraph (i), by adding “and” at the end of subparagraph (ii) and by adding the following after subparagraph (ii):
(iii) as an amount described in subparagraph (c)(i) of the definition eligible pension income in subsection (1) to the extent that the split-pension amount was received by the pensioner as an amount described in subparagraph (c)(i) of that definition, if the pension transferee has attained the age of 65 years before the end of the taxation year.
(3) Subsections (1) and (2) apply to the 2015 and subsequent taxation years.
13 (1) The portion of subparagraph (i) of the description of C in paragraph 63(2.3)(c) of the French version of the Act before clause (A) is replaced by the following:
(i) s’il existe une personne assumant les frais d’entretien d’un enfant admissible du contribuable pour l’année, la somme des nombres suivants :
(2) The portion of subparagraph (ii) of the description of C in paragraph 63(2.3)(c) of the French version of the Act before clause (A) is replaced by the following:
(ii) dans les autres cas, la somme des nombres suivants :
14 Paragraph 66.1(9)(f) of the Act is replaced by the following:
(f) all Canadian development expenses described in subparagraph (a)(ii) of the definition Canadian development expense in subsection 66.2(5) incurred by the taxpayer in respect of the well in a taxation year preceding the year, other than
(i) expenses referred to in paragraph (d) or (e),
(ii) restricted expenses, and
(iii) expenses for a well referred to in paragraph (a) that are incurred
(A) after 2020 (including expenses that are deemed by subsection 66(12.66) to have been incurred on December 31, 2020), if the expenses are incurred in connection with an obligation that was committed to in writing (including a commitment to a government under the terms of a licence or permit) by the taxpayer before March 22, 2017, and
(B) after 2018 (including expenses that are deemed by subsection 66(12.66) to have been incurred on December 31, 2018), in any other case,
15 The portion of the definition commercial debt obligation after paragraph (b) in subsection 80(1) of the Act is replaced by the following:
an amount in respect of the interest was or would have been deductible in computing the debtor’s income, taxable income or taxable income earned in Canada, as the case may be, if this Act were read without reference to paragraph 18(1)(g), subsections 18(2), (3.1) and (4) and section 21; (créance commerciale)
16 (1) The portion of paragraph 81(1)(d.1) of the Act before subparagraph (i) is replaced by the following:
Marginal note:Canadian Forces members and veterans amounts
(d.1) the total of all amounts received or enjoyed by the taxpayer or the taxpayer’s spouse or common-law partner or survivor (as defined in subsection 146.2(1)) in the year on account of
(2) Paragraph 81(1)(d.1) of the Act is amended by striking out “or” at the end of subparagraph (iii) and by adding the following after subparagraph (iv):
(v) a benefit provided under the Veterans Health Care Regulations,
(vi) a benefit provided in respect of Rehabilitation Services and Vocational Assistance under Part 2 of the Veterans Well-being Act, or
(vii) a benefit provided to a member of the Canadian Forces under the Compensation and Benefit Instructions for the Canadian Forces that is
(A) a home modifications benefit,
(B) a home modifications move benefit,
(C) a vehicle modifications benefit,
(D) a home assistance benefit,
(E) an attendant care benefit,
(F) a caregiver benefit,
(G) a spousal education upgrade benefit,
(H) a funeral and burial expenses benefit, or
(I) a next of kin travel benefit;
(3) Paragraph 81(1)(d.1) of the Act is amended by striking out “or” at the end of subparagraph (vi), by adding “or” at the end of subparagraph (vii) and by adding the following after subparagraph (vii):
(viii) a benefit provided by the Department of National Defence as an education expense reimbursement for ill and injured members;
(4) Subparagraph 81(1)(g.3)(i) of the Act is amended by striking out “or” at the end of clause (C), by replacing “and” with “or” at the end of clause (D) and by adding the following after clause (D):
(E) the Settlement Agreement entered into by His Majesty in right of Canada on January 18, 2023 in respect of the class action relating to the attendance of day scholars at residential schools, and
(5) Subsections (1) and (2) are deemed to have come into force on January 1, 2018.
(6) Subsection (3) is deemed to have come into force on January 1, 2021.
(7) Subsection (4) applies to the 2023 and subsequent taxation years.
- Date modified: