C-69 1 44 70-71 Elizabeth II – 1-2 Charles III 2021-2022-2023-2024

An Act to implement certain provisions of the budget tabled in Parliament on April 16, 2024

Budget Implementation Act, 2024, No. 1

Budget Implementation Act, 2024, No. 1 2024 6 20 17 2024 91190

RECOMMENDATION

Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled “

An Act to implement certain provisions of the budget tabled in Parliament on April 16, 2024 ”.

SUMMARY

Part 1 implements certain measures in respect of the Income Tax Act and the Income Tax Regulations by

(

a) denying income tax deductions for expenses incurred with respect to non-compliant short-term rentals;

(

b) exempting from taxation the international shipping income of certain Canadian resident companies;

(

c) exempting from taxation any income of the trusts established under the First Nations Child and Family Services, Jordan’s Principle, and Trout Class Settlement Agreement;

(

d) doubling the volunteer firefighters and search and rescue volunteers tax credits;

(

e) extending the eligibility for the Canada child benefit in respect of a child for six months after the child’s death;

(

f) increasing the cap on labour expenditures per eligible newsroom employee from $55,000 to $85,000 and increasing, for four years, the Canadian journalism labour tax credit rate from 25% to 35%;

(

g) extending eligibility for the mineral exploration tax credit by one year;

(

h) providing a refundable tax credit to small and medium-sized businesses in designated provinces by returning a portion of fuel charge proceeds from the province;

(

i) providing a refundable investment tax credit to qualifying businesses for investments in certain clean hydrogen projects;

(

j) providing a refundable investment tax credit to qualifying businesses for certain investments in clean technology manufacturing property;

(

k) amending the definition “government assistance” to exclude bona fide concessional loans with reasonable repayment terms from public authorities;

(

l) implementing a number of amendments to the alternative minimum tax;

(

m) increasing the home buyers’ plan withdrawal limit from $35,000 to $60,000 and deferring the repayment period by three additional years;

(

n) excluding the failure to report under the mandatory disclosure rules from the application of the

section 238 penalty;

(

o) introducing a $10-million capital gains exemption on the sale of a business to an employee ownership trust; and

(

p) implementing a number of technical amendments to correct inconsistencies and to better align the law with its intended policy objectives.

Part 2 enacts the Global Minimum Tax Act , a regime based on the rules of the Organisation for Economic Co-operation and Development (OECD). The global minimum tax regime will ensure that large multinational corporations are subject to a minimum effective tax rate of 15% on their profits wherever they do business. It sets out rules for the purposes of establishing liability for the tax and also sets out applicable reporting and filing requirements.

To promote compliance with its provisions, that Act includes modern administration and enforcement provisions generally aligned with those found in other taxation statutes. Finally, this Part also makes related and consequential amendments to other texts to ensure proper implementation of the tax and cohesive and efficient administration by the Canada Revenue Agency.

Part 3 amends the Excise Tax Act , the Excise Act , the Excise Act, 2001 , the Underused Housing Tax Act , the Greenhouse Gas Pollution Pricing Act and other related texts in order to implement certain measures.

Division 1 of

Part 3 amends the Excise Tax Act by repealing the temporary relief for supplies of certain face masks or respirators and certain face shields from the Goods and Services Tax/Harmonized Sales Tax.

Division 2 of

Part 3 amends the Excise Act , the Excise Act, 2001 and other related texts in order to implement changes to

(

a) the federal excise duty framework for tobacco products by

(

i) increasing the excise duty rates for tobacco products, including imposing a tax on inventories of cigarettes held by retailers and wholesalers,

(ii)

changing the process by which brands of tobacco products for export are exempted from special excise duty and marking requirements,

(iii)

allowing certain information to be shared for the administration or enforcement of the Tobacco and Vaping Products Act , and

(iv)

requiring the filing of information returns in respect of tobacco excise stamps;

(

b) the federal excise duty framework for vaping products by increasing the excise duty rates for vaping products; and

(

c) the federal excise duty framework for alcohol by

(

i) extending by two years the two per cent cap on the inflation adjustment on beer, spirits and wine excise duties, and

(ii)

cutting by half for two years the excise duty rate on the first 15,000 hectolitres of beer brewed in Canada.

Division 3 of

Part 3 amends the Underused Housing Tax Act and the Underused Housing Tax Regulations by, among other things,

(

a) eliminating filing requirements for certain owners;

(

b) reducing minimum penalties for failing to file a return; and

(

c) introducing a new exemption for residential properties held as a place of residence or lodging for employees.

Division 4 of

Part 3 amends the Greenhouse Gas Pollution Pricing Act by providing authority, in certain circumstances, for the sharing of certain information amongst federal officials and for the public disclosure of certain information by the Minister of National Revenue.

Part 4 enacts and amends several Acts in order to implement various measures.

Division 1 of

Part 4 amends the Budget Implementation Act, 2022, No. 1 to delay the repeal of the Prohibition on the Purchase of Residential Property by Non-Canadians Act for two years.

Division 2 of

Part 4 amends the National Housing Act to increase the in-force limits for guarantees issued by the Canada Mortgage and Housing Corporation (CMHC) in respect of mortgage-backed securities and Canada Mortgage Bonds and for mortgage default insurance provided by CMHC from the temporary $750 billion to the permanent $800 billion. It also amends the Borrowing Authority Act to avoid the double counting of liabilities related to Canada Mortgage Bonds that are guaranteed by the CMHC and have been purchased by the Minister of Finance, on behalf of the Government of Canada, in the calculation of the maximum amount of certain borrowings under that Act.

Division 3 of

Part 4 authorizes the making of payments to the provinces for the fiscal year beginning on April 1, 2024 respecting a national program for providing food in schools.

Division 4 of

Part 4 amends the Canada Student Loans Act and the Canada Student Financial Assistance Act to expand eligibility for student loan forgiveness to early childhood educators, dentists, dental hygienists, pharmacists, midwives, teachers, social workers, psychologists, personal support workers and physiotherapists.

Division 5 of

Part 4 amends the Canada Education Savings Act to, among other things,

(

a) authorize the Minister responsible for that Act to open a registered education savings plan in respect of a child born after 2023 who is eligible for the payment of the Canada Learning Bond and is not the beneficiary under such a plan, so that the Minister may pay a Canada Learning Bond in respect of the child; and

(

b) increase, from 20 to 30 years, the maximum age of a beneficiary under a registered education savings plan in respect of whom a Canada Learning Bond may be paid on application.

It also makes consequential amendments to the Income Tax Act .

Division 6 of

Part 4 amends the Bretton Woods and Related Agreements Act to increase the maximum financial assistance that may be provided in respect of foreign states.

Division 7 of

Part 4 amends the Bretton Woods and Related Agreements Act to increase the amount of the payment that the Minister of Finance may provide to the International Monetary Fund in respect of Canada’s subscriptions. It also amends the International Development (Financial Institutions) Assistance Act and the European Bank for Reconstruction and Development Agreement Act to provide for new financial instruments that the Minister of Foreign Affairs or the Minister of Finance, as the case may be, may use to provide financial assistance to the institutions referred to in those Acts.

Division 8 of

Part 4 amends the International Financial Assistance Act to, among other things, provide that foreign exchange losses in relation to programs referred to in that Act must be charged to the Consolidated Revenue Fund and provide for the making of payments to Development Finance Institute Canada (DFIC) Inc. in relation to programs referred to in that Act out of the Consolidated Revenue Fund.

Division 9 of

Part 4 amends the Export Development Act to lower the limit for total liabilities and obligations referred to in subsection 24(1) of that Act from $115 billion to $100 billion.

Division 10 of

Part 4 amends the Financial Administration Act to broaden the application of subsection 85(2) of that Act to other Crown corporations.

Division 11 of

Part 4 amends the Financial Administration Act to require certain banks and other financial institutions to disclose prescribed information for federal payments accepted for deposit.

Division 12 of

Part 4 amends the Federal-Provincial Fiscal Arrangements Act to enhance the Canada Health Transfer for qualifying provinces and territories.

Division 13 of

Part 4 amends the Pension Benefits Standards Act, 1985 to require that the Superintendent of Financial Institutions publish certain information relating to pension plan investments. It also amends the Pooled Registered Pension Plans Act to require that plan administrators provide specified information by written notice to certain persons when they become members of a pooled registered pension plan.

Division 14 of

Part 4 amends the Canada Pension Plan to, among other things,

(

a) provide for a death benefit of $5,000 in cases where no other Canada Pension Plan benefit, with the exception of the orphan’s benefit, has been paid in respect of the deceased contributor’s contributions;

(

b) create a new child’s benefit for dependent children aged 18 to 24 who are in part-time attendance at school;

(

c) maintain eligibility for the disabled contributor’s child’s benefit if the disabled contributor reaches the age of 65;

(

d) allow for the deeming of an application for a disabled contributor’s child’s benefit on behalf of a child to have been made at an earlier date under the Canada Pension Plan ’s incapacity provisions;

(

e) preclude entitlement to a survivor’s pension if an individual has received a division of unadjusted pensionable earnings in respect of their deceased separated spouse; and

(

f) clarify the determination of the payee of the disabled contributor’s child’s benefit.

It also makes a consequential amendment to the Canada Pension Plan Regulations .

Division 15 of

Part 4 amends the Public Sector Pension Investment Board Act to provide for the payment of certain amounts into the Consolidated Revenue Fund by the Public Sector Pension Investment Board.

Division 16 of

Part 4 enacts the Consumer-Driven Banking Act , which establishes a consumer-driven framework for individuals and small businesses to safely and securely share their data with the participating entities of their choice.

It also makes related amendments to the Financial Consumer Agency of Canada Act to establish the position of Senior Deputy Commissioner for Consumer-Driven Banking who is responsible for consumer-driven banking matters and to provide for, among other things, the supervision of participating entities.

Division 17 of

Part 4 amends the Bank Act to, among other things, clarify the

definitions “deposit-type instrument” and “principal-protected note”.

Division 18 of

Part 4 amends the Office of the Superintendent of Financial Institutions Act to increase to $100,000,000 the maximum amount that expenditures made out of the Consolidated Revenue Fund to defray the expenses arising out of the operations of the Office may exceed the Office’s total assessments and revenues.

Division 19 of

Part 4 amends the Bank of Canada Act to clarify that the Bank of Canada may enter into repurchase, reverse repurchase and buy-sellback agreements.

Division 20 of

Part 4 amends the

Canada Business Corporations Act to

(

a) harmonize fines for a corporation guilty of an offence related to the collection or sending of information regarding individuals with significant control; and

(

b) set separate fines and imprisonment terms on the basis of a

summary conviction or a conviction on indictment for a director, officer or shareholder of a corporation guilty of an offence related to individuals with significant control.

Division 21 of

Part 4 amends Parts I to III of the Canada Labour Code to, among other things,

(

a) provide that a person who is paid remuneration by an employer is presumed to be their employee unless the contrary is proved by the employer;

(

b) provide that if, in any proceeding other than a prosecution, an employer alleges that a person is not their employee, the burden of proof is on the employer; and

(

c) prohibit an employer from treating an employee as if they were not their employee.

Finally, it also includes transitional provisions.

Division 22 of

Part 4 amends the Canada Labour Code to, among other things, set out certain employer obligations relating to policies respecting work-related communication and clarify certain employee rights and employer obligations relating to terminations of employment. It also includes transitional provisions.

Division 23 of

Part 4 amends the Employment Insurance Act to extend, until October 24, 2026, the duration of the measure that increases the maximum number of weeks for which benefits may be paid in a benefit period to certain seasonal workers.

Division 24 of

Part 4 amends

section 61 of

An Act for the Substantive Equality of Canada’s Official Languages in order to add a reference to subsections 18(1.1) and (1.2) of the Use of French in Federally Regulated Private Businesses Act in subsection 19(1) of that Act, which

An Act for the Substantive Equality of Canada’s Official Languages enacts.

Division 25 of

Part 4 authorizes a corporation that is to be incorporated as a wholly owned subsidiary of the Canada Development Investment Corporation to provide loan guarantees as part of an Indigenous loan guarantee program and authorizes the payment out of the Consolidated Revenue Fund by the Minister of Finance of amounts that are required in respect of those guarantees.

Division 26 of

Part 4 authorizes the payment of up to $1.3 million to entities or individuals involved in the government’s engagement in a pilot project for the creation of a Red Dress Alert.

Division 27 of

Part 4 provides that the subsidiary of VIA Rail Canada Inc. incorporated with the corporate name VIA HFR - VIA TGF Inc. is, as of the date of its incorporation, an agent of His Majesty in right of Canada and may enter into contracts, agreements and other arrangements with His Majesty as though it were not such an agent.

Division 28 of

Part 4 amends the Impact Assessment Act , in response to the majority opinion of the Supreme Court of Canada on the constitutionality of that Act, to, among other things,

(

a) align the

preamble and purpose provision with the primary objective of that Act, which is to prevent or mitigate significant adverse effects within federal jurisdiction — and significant direct or incidental adverse effects — that may be caused by the carrying out of physical activities;

(

b) replace the definition “effects within federal jurisdiction” with “adverse effects within federal jurisdiction” and, in doing so,

(

i) restrict the definition to non-negligible adverse changes,

(ii)

limit transboundary changes to those involving the pollution of transboundary waters and the marine environment, and

(iii)

include, in respect of federal works or undertakings and activities carried out on federal lands, non-negligible adverse changes to the environment or to health, social and economic conditions;

(

c) ensure that the impact assessment process applies only to those physical activities that may cause adverse effects within federal jurisdiction or direct or incidental adverse effects;

(

d) ensure that, in deciding if an impact assessment of a designated project is required, one factor that the Impact Assessment Agency of Canada must take into account is whether another means exists that would permit a jurisdiction to address those effects;

(

e) amend the final decision-making provisions to provide for an initial determination as to whether the adverse effects within federal jurisdiction and the direct or incidental adverse effects are likely to be, to some extent, significant, and then, if so, provide for a determination as to whether those effects are justified in the public interest; and

(

f) improve cooperation tools to better harmonize the impact assessment process with the processes for assessing effects that are followed by provincial and Indigenous jurisdictions.

Finally, it also includes transitional provisions.

Division 29 of

Part 4 amends the Judges Act to increase the number of salaries authorized for judges of superior courts other than appeal courts. It also reduces in a corresponding manner the number of salaries authorized for judges of provincial unified family courts.

Division 30 of

Part 4 amends the Tax Court of Canada Act to provide that, if a party to a proceeding under the general procedure of the Tax Court of Canada is not an individual, that party must be represented by counsel, except under special circumstances.

Division 31 of

Part 4 amends the Food and Drugs Act to, among other things, authorize the Minister of Health to

(

a) establish rules for the purpose of preventing, managing or controlling the risk of injury to health from the use of therapeutic products, other than the intended use, or the risk of adverse effects on human beings, animals or the environment from the use of a drug intended for an animal;

(

b) exempt any food, therapeutic product, person or activity from the application of certain provisions of that Act or its regulations; and

(

c) deem, on the basis of decisions of, information or documents produced by, a foreign regulatory authority, that certain requirements of that Act or its regulations are met in respect of a therapeutic product or food.

Finally, it also includes a transitional provision.

Division 32 of

Part 4 amends the Tobacco and Vaping Products Act to authorize the provision of customs information to the Minister responsible for that Act for the purpose of the administration and enforcement of that Act and to authorize that Minister to disclose information to other federal ministers for certain purposes.

Division 33 of

Part 4 amends the Criminal Code to broaden the criminal interest rate offence to prohibit a person from offering to enter into an agreement or arrangement to receive interest at a criminal rate and from advertising an offer to enter into an agreement or arrangement that provides for the receipt of interest at a criminal rate. It also repeals the provision that requires the consent of the Attorney General prior to commencing proceedings related to the offence.

Division 34 of

Part 4 contains measures that are related to money laundering, terrorist financing and sanctions evasion and other measures.

Subdivision A of Division 34 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to, among other things,

(

a) permit information sharing between reporting entities for the purpose of detecting and deterring money laundering, terrorist financing and sanctions evasion;

(

b) authorize, subject to certain conditions, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to disclose certain information to provincial and territorial civil forfeiture offices and to the Department of Citizenship and Immigration;

(

c) authorize FINTRAC to publicize additional information pertaining to violations of that Act; and

(

d) extend the application of that Act to cheque cashing businesses.

It also makes consequential amendments to the Personal Information Protection and Electronic Documents Act and the Cross-border Currency and Monetary Instruments Reporting Regulations .

Subdivision B of Division 34 amends the Income Tax Act and the Excise Tax Act to allow provincial or superior court judges, a judge of a superior court of criminal jurisdiction or a judge as defined in

section 552 of the Criminal Code to grant on application by a Canada Revenue Agency official the authorization to use device or investigative technique, or procedure or otherwise do any thing provided in a warrant, for purposes of tax investigations.

Subdivision C of Division 34 amends the Criminal Code to provide for an order to keep an account open or active and for a production order to require the production of documents or data that are in a person’s possession or control on dates specified in an order that fall within the 60-day period after the day on which it is made.

Division 35 of

Part 4 amends the Criminal Code to, among other things,

(

a) create new offences in respect of motor vehicle theft, including an offence concerning the possession or the distribution of an electronic device suitable for committing theft of a motor vehicle, and in respect of criminal organizations; and

(

b) add, as an aggravating factor, evidence that an offender involved a person under the age of 18 years in the commission of an offence.

It also makes consequential amendments to other Acts.

Division 36 of

Part 4 amends the Radiocommunication Act to, among other things, prohibit the manufacture, import, distribution, lease, offer for sale, sale or possession of certain devices specified by the Minister of Industry. It also amends that Act to establish as an offence or a violation the contravention of that prohibition.

Division 37 of

Part 4 amends the Telecommunications Act to, among other things, require telecommunications service providers to provide their subscribers with a self-service mechanism that allows them to cancel their contract for telecommunications services or modify their telecommunications service plan and to inform those subscribers before the expiry of their fixed-term contract, as well as in other specified circumstances, of other service plans that those providers offer. It also amends that Act to prohibit the charging of certain fees.

Division 38 of

Part 4 amends the Corrections and Conditional Release Act to, among other things,

(

a) provide that the Correctional Service of Canada is responsible for implementing any arrangement — approved by the Minister of Public Safety and Emergency Preparedness — entered into by the Commissioner of Corrections and the Canada Border Services Agency with respect to the support that the Service may provide to the Agency to assist in the exercise of certain powers or the performance of certain duties and functions;

(

b) control the access of the inmates of a penitentiary to a designated immigrant station adjacent to the penitentiary and the access of the immigration detainees of a designated immigrant station to a penitentiary adjacent to the station; and

(

c) provide that, in exigent circumstances, staff members of the Service may provide additional support to detention enforcement officers of the Agency to assist them in the exercise of certain powers or the performance of certain duties and functions.

It also amends the Immigration and Refugee Protection Act to define the term “immigrant station”, to provide that an area of a penitentiary may be an immigrant station only if it is designated under the Corrections and Conditional Release Act and to set out the circumstances under which a person detained under that Act may be detained in a designated immigrant station.

Finally, it provides for the repeal of those amendments on a specified date and includes a transitional provision.

Division 39 of

Part 4 contains measures related to public debt and the borrowing of money.

Subdivision A of Division 39 amends the Financial Administration Act to clarify that certain regulations and directions do not apply to contracts related to the borrowing of money entered into by the Minister of Finance.

Subdivision B of Division 39 amends the Borrowing Authority Act to increase the maximum amount of certain borrowings.

Division 40 of

Part 4 amends the Trust and Loan Companies Act , the Bank Act and the Insurance Companies Act to require certain financial institutions to make available information respecting diversity among directors and members of senior management.

Division 41 of

Part 4 amends the Trust and Loan Companies Act , the Bank Act and the Insurance Companies Act to extend the period during which federal financial institutions governed by those Acts may carry on business.

Division 42 of

Part 4 amends the Federal Courts Act to provide that the Federal Court has jurisdiction to hear applications for judicial review of decisions of the Social Security Tribunal on the extension of time to make a request for review or reconsideration under the Canada Disability Benefit Act . It also amends the Tax Court of Canada Act and the Department of Employment and Social Development Act to, among other things, provide the Tribunal with jurisdiction to hear appeals of decisions made under the Canada Disability Benefit Act and require that matters related to income raised in those appeals be referred to the Tax Court of Canada.

Division 43 of

Part 4 amends the Controlled Drugs and Substances Act to repeal provisions related to the ministerial power to exempt supervised consumption sites from the application of that Act. It also amends that Act to allow for the making of regulations respecting authorizations for supervised consumption and drug checking services and includes transitional provisions.

His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

Short Title

Short title

This Act may be cited as the Budget Implementation Act, 2024, No. 1 .

PART 1

Amendments to the Income Tax Act and Other Legislation

R.S., c. 1 (5th Supp.)

Income Tax Act

(1) The description of B in subsection 6(2) of the French version of the Income Tax Act is replaced by the following:

le produit obtenu en multipliant 1 667 par le quotient obtenu en divisant le nombre total de jours ci-dessus par 30, si le quotient ainsi obtenu n’est pas un nombre entier et qu’il est supérieur à un, en l’arrondissant au nombre entier le plus proche ou, si ce quotient est équidistant de deux nombres entiers consécutifs, en l’arrondissant au plus petit de ces deux nombres;

(2) The description of D in subsection 6(2) of the French version of the Act is replaced by the following:

le nombre obtenu en divisant par 30 le nombre total de jours ci-dessus où l’employeur est propriétaire de l’automobile, si le quotient ainsi obtenu n’est pas un nombre entier et qu’il est supérieur à un, en l’arrondissant au nombre entier le plus proche ou, si ce quotient est équidistant de deux nombres entiers consécutifs, en l’arrondissant au plus petit de ces deux nombres;

(1) Subsection 7(1.11) of the Act is replaced by the following:

Non-arm’s length relationship with trusts

(1.11) For the purposes of this section, a mutual fund trust is deemed not to deal at arm’s length with a corporation only if

(

a) the trust controls the corporation; or

(

b) the corporation holds securities that give the corporation not less than 50% of the votes that could be cast at a meeting of the unitholders of the trust.

(2) The portion of subsection 7(1.31) of the Act before paragraph (

a) is replaced by the following:

Disposition of newly acquired security

(1.31) Where a taxpayer acquires at a particular time a particular security under an agreement referred to in subsection (1) — or acquires the particular security as consideration for the disposition of rights under the agreement — and, on a day that is no later than 30 days after the day that includes the particular time, the taxpayer disposes of a security that is identical to the particular security, the particular security is deemed to be the security that is so disposed of if

(3) Subsection (1) applies to rights exercised or disposed of after 2004 under agreements to sell or issue securities made after 2002.

(4) Subsection (2) is deemed to have come into force on January 1, 2023.

(1) Subparagraph 8(1)(f)(vi) of the French version of the Act is replaced by the following:

(vi)

des dépenses qui ne seraient pas, en vertu de l’alinéa 18(1)l), déductibles dans le calcul du revenu du contribuable pour l’année, si son emploi consistait en une entreprise exploitée par lui;

(2) The portion of paragraph 8(1)(

g) of the French version of the Act after subparagraph (ii) is replaced by the following:

les sommes qu’il a ainsi déboursées au cours de l’année, dans la mesure où il n’a pas été remboursé et n’a pas le droit d’être remboursé à cet égard;

(3) The portion of paragraph 8(1)(

i) of the French version of the Act before subparagraph (

i) is replaced by the following:

Cotisations et autres dépenses liées à l’exercice de fonctions

dans la mesure où il n’a pas été remboursé et n’a pas le droit d’être remboursé à cet égard, les sommes payées par le contribuable au cours de l’année, ou les sommes payées pour son compte au cours de l’année si elles sont à inclure dans son revenu pour l’année, au

titre :

(1) Paragraph 12(1)(

t) of the Act is replaced by the following:

Investment tax credit

(

t) the amount deducted under subsection 127(5) or (6) or 127.48(3) in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year to the extent that it was not included in computing the taxpayer’s income for a preceding taxation year under this paragraph or is not included in an amount determined under paragraph 13(7.1)(

e) or 37(1)(e), subparagraph 53(2)(c)(vi) or (viii.1) or (h)(ii) or for I in the definition undepreciated capital cost in subsection 13(21) or L in the definition cumulative Canadian exploration expense in subsection 66.1(6);

(2) Paragraph 12(1)(

t) of the Act, as enacted by subsection (1), is replaced by the following:

Investment tax credit

(

t) the amount deducted under subsection 127(5) or (6), 127.48(3) or 127.49(6) in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year to the extent that it was not included in computing the taxpayer’s income for a preceding taxation year under this paragraph or is not included in an amount determined under paragraph 13(7.1)(

e) or 37(1)(e), subparagraph 53(2)(c)(vi), (viii.1) or (viii.2) or (h)(ii) or for I in the definition undepreciated capital cost in subsection 13(21) or L in the definition cumulative Canadian exploration expense in subsection 66.1(6);

(3) Paragraph 12(1)‍(

x) of the Act is amended by striking out “and” at the end of subparagraph (vii), by adding “and” at the end of subparagraph (viii) and by adding the following after subparagraph (viii):

(ix)

was not received by the taxpayer as an excluded loan;

(4) Subsection 12(11) of the Act is amended by adding the following in alphabetical order:

excluded loan means a loan, other than a forgivable loan, evidenced in writing

(

a) that is from a payer that is

(

i) a government, municipality or other public authority in Canada, or

(ii)

a person resident in Canada or Canadian partnership, if it is reasonable to conclude that the payer would not have made the loan but for the direct or indirect receipt by the payer of amounts from a government, municipality or other public authority in Canada;

(

b) for which, at the time the loan was made, bona fide arrangements were made for repayment of the loan within a reasonable time; and

(

c) the funds from which were used for the purpose of earning income from a business or property. ( prêt exclu )

(5) Subsection (1) is deemed to have come into force immediately after the expiration of March 27, 2023.

(6) Subsection (2) is deemed to have come into force on January 1, 2024.

(7) Subsections (3) and (4) are deemed to have come into force on January 1, 2020, and apply to loans made after December 31, 2019.

(1) Section 13 of the Act is amended by adding the following after subsection (4):

COVID — time not counted

(4.01) For the purposes of subparagraph (4)(c)(ii), the period beginning on March 15, 2020 and ending on March 12, 2022 is not to be counted.

(2) The portion of subsection 13(7.1) of the Act before paragraph (

a) is replaced by the following:

Deemed capital cost of certain property

(7.1) For the purposes of this Act, where

section 80 applied to reduce the capital cost to a taxpayer of a depreciable property or a taxpayer deducted an amount under subsection 127(5) or (6) or 127.48(3) in respect of a depreciable property or received or is entitled to receive assistance from a government, municipality or other public authority in respect of, or for the acquisition of, depreciable property, whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance other than

(3) The portion of subsection 13(7.1) of the Act before paragraph (a), as enacted by subsection (2), is replaced by the following:

Deemed capital cost of certain property

(7.1) For the purposes of this Act, where

section 80 applied to reduce the capital cost to a taxpayer of a depreciable property or a taxpayer deducted an amount under subsection 127(5) or (6), 127.48(3) or 127.49(6) in respect of a depreciable property or received or is entitled to receive assistance from a government, municipality or other public authority in respect of, or for the acquisition of, depreciable property, whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance other than

(4) Subsection 13(7.1) of the Act is amended by striking out “or” at the end of paragraph (b), by adding “or” at the end of paragraph (b.1) and by adding the following after paragraph (b.1):

(b.2)

an amount received as an excluded loan as defined in subsection 12(11),

(5) Paragraph 13(7.1)(

e) of the Act is replaced by the following:

(

e) where the property was acquired in a taxation year ending before the particular time, all amounts deducted under subsection 127(5) or (6) or 127.48(3) by the taxpayer for a taxation year ending before the particular time,

(6) Paragraph 13(7.1)(

e) of the Act, as enacted by subsection (5), is replaced by the following:

(

e) where the property was acquired in a taxation year ending before the particular time, all amounts deducted under subsection 127(5) or (6), 127.48(3) or 127.49(6) by the taxpayer for a taxation year ending before the particular time,

(7) The description of I in the definition undepreciated capital cost in subsection 13(21) of the Act is replaced by the following:

is the total of all amounts deducted under subsection 127(5) or (6) or 127.48(3), in respect of a depreciable property of the class of the taxpayer, in computing the taxpayer’s tax payable for a taxation year ending before that time and subsequent to the disposition of that property by the taxpayer,

(8) The description of I in the definition undepreciated capital cost in subsection 13(21) of the Act, as enacted by subsection (7), is replaced by the following:

is the total of all amounts deducted under subsection 127(5) or (6), 127.48(3) or 127.49(6), in respect of a depreciable property of the class of the taxpayer, in computing the taxpayer’s tax payable for a taxation year ending before that time and subsequent to the disposition of that property by the taxpayer,

(9) The portion of paragraph 13(24)(

a) of the Act before subparagraph (

i) is replaced by the following:

(

a) subject to paragraph (b), for the purposes of the description of A in the definition undepreciated capital cost in subsection (21) and of sections 127, 127.1 and 127.48, the property is deemed

(10) The portion of paragraph 13(24)(

a) of the Act before subparagraph (i), as enacted by subsection (9), is replaced by the following:

(

a) subject to paragraph (b), for the purposes of the description of A in the definition undepreciated capital cost in subsection (21) and of sections 127, 127.1, 127.48 and 127.49, the property is deemed

(11) Subsection (1) is deemed to have come into force on March 12, 2020.

(12) Subsections (2), (5), (7) and (9) are deemed to have come into force immediately after the expiration of March 27, 2023.

(13) Subsection (4) is deemed to have come into force on January 1, 2020, and applies to loans made after December 31, 2019.

(14) Subsections (3), (6), (8) and (10) are deemed to have come into force on January 1, 2024.

Clause 39(1)(c)(iv)(

C) of the Act is replaced by the following:

(

C) a corporation referred to in

section 6 of the Winding-up and Restructuring Act that was insolvent (within the meaning of that Act) and was a small business corporation at the time a winding-up order under that Act was made in respect of the corporation,

(1) Section 44 of the Act is amended by adding the following after subsection (1):

COVID — time not counted

(1.01) For the purposes of paragraphs (1)(

c) and (d), the period beginning on March 15, 2020 and ending on March 12, 2022 is not to be counted.

(2) Subsection (1) is deemed to have come into force on March 12, 2020.

Subparagraph 50(1)(b)(ii) of the Act is replaced by the following:

(ii)

the corporation is a corporation referred to in

section 6 of the Winding-up and Restructuring Act that is insolvent (within the meaning of that Act) and in respect of which a winding-up order under that Act has been made in the year, or

(1) Subparagraph 53(1)(e)(xiii) of the Act is replaced by the following:

(xiii)

any amount required by subsection 127(30) or

section 127.48 to be added to the taxpayer’s tax otherwise payable under this Part for a taxation year that ended before that time in respect of the interest in the partnership;

(2) Subparagraph 53(1)(e)(xiii) of the Act, as enacted by subsection (1), is replaced by the following:

(xiii)

any amount required by subsection 127(30),

section 127.48 or subsection 127.49(17) to be added to the taxpayer’s tax otherwise payable under this Part for a taxation year that ended before that time in respect of the interest in the partnership;

(3) Paragraph 53(2)(

c) of the Act is amended by adding the following after subparagraph (viii):

(viii.1)

an amount equal to that portion of all amounts deemed deducted under subsection 127.48(3) in computing the tax otherwise payable by the taxpayer under this Part for the taxpayer’s taxation years ending before that time that may reasonably be attributed to amounts added in computing the clean hydrogen tax credit (as defined in subsection 127.48(1)) of the taxpayer under subsection 127.48(12),

(4) Paragraph 53(2)(

c) of the Act, as modified by subsection (3), is amended by adding the following after subparagraph (viii.1):

(viii.2)

an amount equal to that portion of all amounts deemed deducted under subsection 127.49(6) in computing the tax otherwise payable by the taxpayer under this Part for the taxpayer’s taxation years ending before that time that may reasonably be attributed to amounts added in computing the CTM investment tax credit (as defined in subsection 127.49(1)) of the taxpayer under subsection 127.49(8),

(5) Subsections (1) and (3) are deemed to have come into force immediately after the expiration of March 27, 2023.

(6) Subsections (2) and (4) are deemed to have come into force on January 1, 2024.

(1) Paragraph (

b) of the description of B of the definition exemption threshold in

section 54 of the English version of the Act is replaced by the following:

(

b) the exemption threshold of the taxpayer in respect of the flow-through share class of property immediately before that earlier time;

(2) The portion of paragraph (

b) of the definition fresh-start date in

section 54 of the English version of the Act before subparagraph (

i) is replaced by the following:

(

b) in the case of any other property that is included in the flow-through share class of property, the day that is the later of

Subparagraph 56(1)(a)(iv) of the Act is replaced by the following:

(iv)

a benefit under

Part I, VII.1, VIII or VIII.1 of the Employment Insurance Act ,

(1) Subparagraph 60(j)(iv) of the Act is amended by striking out “or” at the end of clause (A), by adding “or” at the end of clause (

B) and by adding the following after clause (B):

(

C) to or under a registered retirement income fund under which the taxpayer is the annuitant , as defined in subsection 146.3(1), other than the portion thereof designated for a taxation year for the purposes of paragraph (l),

(2) The portion of paragraph 60(

n) of the Act before subparagraph (

i) is replaced by the following:

Repayment of pension or benefits

(

n) any amount paid by the taxpayer in the year as a repayment (otherwise than because of

Part VII of the Employment Insurance Act or

section 8 of the Canada Recovery Benefits Act ) of any of the following amounts to the extent that the amount was included in computing the taxpayer’s income, and not deducted in computing the taxpayer’s taxable income, for the year or for a preceding taxation year, namely,

(3) Section 60 of the Act is amended by adding the following after paragraph (n.1):

Amounts repaid in subsequent years

(n.2)

any amount paid by the taxpayer in a year (in this paragraph referred to as the “subsequent year”) that is after the year as a repayment of an amount that was included in computing the taxpayer’s income for the year under any of subparagraphs 56(1)(a)(i), (ii), (iv), (vi) or (vii) or paragraph 56(1)(r), to the extent that the amount paid

(

i) exceeds the taxpayer’s taxable income for the subsequent year (determined without reference to paragraphs (n), (n.1) and (v.1)), and

(ii)

is not deducted in computing the taxpayer’s taxable income for any other taxation year;

(4) Paragraph 60(

r) of the Act is repealed.

(5) Paragraph 60(v.1) of the Act is replaced by the following:

EI benefit repayment

(v.1)

any benefit repayment payable by the taxpayer under

Part VII of the Employment Insurance Act on or before April 30 of the following year, to the extent that the amount was not deductible in computing the taxpayer’s income for any preceding taxation year;

(6) Subsection (1) is deemed to have come into force on August 4, 2023.

(7) Subsection (3) applies to the 2019 and subsequent taxation years.

(1) Paragraph 66(12.73)(

e) of the Act is replaced by the following:

(

e) if a corporation fails to file the statement within the time required or fails in the statement filed to apply the excess fully to reduce one or more purported renunciations, the Minister may at any time reduce the total amount purported to be renounced by the corporation to one or more persons by the amount of the unapplied excess in which case, except for the purpose of

Part XII.6, the amount purported to have been so renounced to a person is deemed, after that time, always to have been reduced by the portion of the unapplied excess allocated by the Minister in respect of that person.

(2) Subsection (1) is deemed to have come into force on August 4, 2023.

(1) Subclause 66.8(1)(a)(ii)(B)(

I) of the Act is replaced by the following:

(

I) the total of all amounts required by subsections 127(8) and 127.48(12) in respect of the partnership to be added in computing the investment tax credit or the clean hydrogen tax credit (as defined in subsection 127.48(1)) of the taxpayer in respect of the fiscal period, and

(2) Subclause 66.8(1)(a)(ii)(B)(

I) of the Act, as enacted by subsection (1), is replaced by the following:

(

I) the total of all amounts required by subsections 127(8), 127.48(12) and 127.49(8) in respect of the partnership to be added in computing the investment tax credit, the clean hydrogen tax credit (as defined in subsection 127.48(1)) or the CTM investment tax credit (as defined in subsection 127.49(1)) of the taxpayer in respect of the fiscal period, and

(3) Subsection (1) is deemed to have come into force immediately after the expiration of March 27, 2023.

(4) Subsection (2) is deemed to have come into force on January 1, 2024.

(1) The Act is amended by adding the following after

section 67.6:

Definitions

67.7

(1) The following

definitions apply in this section.

non-compliant amount , for a taxation year, means the amount determined by the formula

A × B ÷ C where A

is the total of all amounts that would, if subsection (2) did not apply, be deductible in computing income in the taxation year in respect of the use of a residential property as a short-term rental in the taxation year;

is the number of days in the taxation year that the residential property was a non-compliant short-term rental; and

is the number of days in the taxation year that the residential property was a short-term rental. ( montant non conforme )

non-compliant short-term rental means, at any time, a short-term rental that is located in a province or municipality that, at that time,

(

a) does not permit the operation of the short-term rental at the location of the short-term rental; or

(

b) requires registration, a licence or a permit to operate the short-term rental, and the short-term rental does not comply with all applicable registration, licensing and permit requirements. ( location à court terme non conforme )

residential property means all or any part of a house, apartment, condominium unit, cottage, mobile home, trailer, houseboat or other property, located in Canada, the use of which is permitted for residential purposes under applicable law. ( bien résidentiel )

short-term rental means a residential property that is rented or offered for rent for a period of less than 90 consecutive days. ( location à court terme )

Non-deductibility of expenses — short-term rental

(2) Notwithstanding any other provision of this Act, no amount is deductible in computing income in respect of a short-term rental for a taxation year, to the extent the amount is a non-compliant amount for the taxation year.

Deemed compliance

(3) For the purposes of subsection (1), a short-term rental of a person or partnership is deemed not to be a non-compliant short-term rental for the 2024 taxation year of the person or partnership if

(

a) the short-term rental is located in a province or municipality that requires registration, a licence or a permit to operate as a short-term rental; and

(

b) the short-term rental complies with all applicable registration, licensing and permit requirements by December 31, 2024.

Reassessments

(4) Notwithstanding subsections 152(4) to (5), the Minister may make any assessments, reassessments and additional assessments of tax, interest and penalties and any determinations and redeterminations that are necessary to give effect to subsection (2) for any taxation year.

(2) Subsection (1) applies to outlays made and expenses incurred after 2023.

(1) Subsection 81(1) of the Act is amended by adding the following after paragraph (c):

Ship of resident corporations

(c.1)

the income for the year of a corporation resident in Canada (if this Act were read without reference to subsection 250(4)) earned from international shipping, if that corporation satisfies the conditions set out in paragraphs 250(6)(

a) and (b);

(2) The portion of subparagraph 81(1)(g.3)(

i) of the Act before clause (

A) is replaced by the following:

(

i) the taxpayer is a trust established under

(3) Subparagraph 81(1)(g.3)(

i) of the Act is amended by striking out “or” at the end of clause (D), by replacing “and” at the end of clause (

E) with “or” and by adding the following after clause (E):

(

F) the Settlement Agreement entered into by His Majesty in right of Canada, dated effective as of April 19, 2023, in respect of the class actions relating to the First Nations Child and Family Services, Jordan’s Principle and Trout Class, and

(4) Subsection (1) applies to taxation years that begin on or after December 31, 2023.

(5) Subsections (2) and (3) are deemed to have come into force on January 1, 2024.

(1) Subsection 87(2) of the Act is amended by adding the following after paragraph (qq):

Continuation of corporation

(qq.1)

for the purposes of

section 127.48, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation;

(2) Paragraph 87(2)(qq.1) of the Act, as enacted by subsection (1), is replaced by the following:

Continuation of corporation

(qq.1)

for the purposes of sections 127.48 and 127.49, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation;

(3) Subsection (1) is deemed to have come into force immediately after the expiration of March 27, 2023.

(4) Subsection (2) is deemed to have come into force on January 1, 2024.

(1) Subsection 88(1) of the Act is amended by adding the following after paragraph (e.3):

(e.31)

for the purposes of

section 127.48, at the end of any particular taxation year ending after the subsidiary was wound up, the parent is deemed to be the same corporation as, and a continuation of, the subsidiary;

(2) Paragraph 88(1)(e.31) of the Act, as enacted by subsection (1), is replaced by the following:

(e.31)

for the purposes of sections 127.48 and 127.49, at the end of any particular taxation year ending after the subsidiary was wound up, the parent is deemed to be the same corporation as, and a continuation of, the subsidiary;

(3) Paragraph 88(2)(

c) of the Act is replaced by the following:

(

c) for the purpose of computing the income of the corporation for its taxation year that includes the particular time, paragraph 12(1)(

t) shall be read as follows:

“(

t) the amount deducted under subsection 127(5) or (6) or 127.48(3) in computing the taxpayer’s tax payable for the year or a preceding taxation year to the extent that it was not included under this paragraph in computing the taxpayer’s income for a preceding taxation year or is not included in an amount determined under paragraph 13(7.1)(

e) or 37(1)(

e) or subparagraph 53(2)(c)(vi) or (viii.1) or (h)(ii) or the amount determined for I in the definition undepreciated capital cost in subsection 13(21) or L in the definition cumulative Canadian exploration expense in subsection 66.1(6);”.

(4) Paragraph 88(2)(

c) of the Act, as enacted by subsection (3), is replaced by the following:

(

c) for the purpose of computing the income of the corporation for its taxation year that includes the particular time, paragraph 12(1)(

t) shall be read as follows:

“(

t) the amount deducted under subsection 127(5) or (6), 127.48(3) or 127.49(6) in computing the taxpayer’s tax payable for the year or a preceding taxation year to the extent that it was not included under this paragraph in computing the taxpayer’s income for a preceding taxation year or is not included in an amount determined under paragraph 13(7.1)(

e) or 37(1)(

e) or subparagraph 53(2)(c)(vi), (viii.1) or (viii.2) or (h)(ii) or the amount determined for I in the definition undepreciated capital cost in subsection 13(21) or L in the definition cumulative Canadian exploration expense in subsection 66.1(6);”.

(5) Subsections (1) and (3) are deemed to have come into force immediately after the expiration of March 27, 2023.

(6) Subsections (2) and (4) are deemed to have come into force on January 1,

Section 89 of the Act is amended by adding the following after subsection (14.1):

Late designation — transitional ERDTOH

(14.2) If, as a consequence of the application of subparagraph (a)(iii) of the definition eligible refundable dividend tax on hand in subsection 129(4), in the opinion of the Minister, the circumstances are such that it would be just and equitable to permit a designation under subsection (14) to be made before the day that is six years after the day on which the designation was required to be made, the designation is deemed to have been made at the time the designation was required to be made.

(1) The portion of clause 95(2)(a)(ii)(

D) of the Act before subclause (III) is replaced by the following:

(

D) by another foreign affiliate (referred to in this clause as the “second affiliate”) of the taxpayer — in respect of which the taxpayer has a qualifying interest throughout the year — to the extent that the amounts are paid or payable by the second affiliate, in respect of any particular period in the year, under a legal obligation to pay interest in respect of

(

I) borrowed money used for the purpose of earning income from property, or

(II)

an amount payable for property acquired for the purpose of gaining or producing income from property

where

(2) Subsection (1) is deemed to have come into force on August 4, 2023.

(1) Subparagraph 96(2.1)(b)(ii) of the Act is replaced by the following:

(ii)

the amount required by subsection 127(8) or 127.48(12) in respect of the partnership to be added in computing the investment tax credit or the clean hydrogen tax credit (as defined in subsection 127.48(1)) of the taxpayer for the taxation year,

(2) Subparagraph 96(2.1)(b)(ii) of the Act, as enacted by subsection (1), is replaced by the following:

(ii)

the amount required by subsection 127(8), 127.48(12) or 127.49(8) in respect of the partnership to be added in computing the investment tax credit, the clean hydrogen tax credit (as defined in subsection 127.48(1)) or the CTM investment tax credit (as defined in subsection 127.49(1)) of the taxpayer for the taxation year,

(3) The portion of subsection 96(2.2) of the Act before paragraph (

a) is replaced by the following:

At-risk amount

(2.2) For the purposes of this

section and sections 111, 127, 127.48 and 127.491, the at-risk amount of a taxpayer, in respect of a partnership of which the taxpayer is a limited partner, at any particular time is the amount, if any, by which the total of

(4) The portion of subsection 96(2.2) of the Act before paragraph (a), as enacted by subsection (3), is replaced by the following:

At-risk amount

(2.2) For the purposes of this

section and sections 111, 127, 127.48, 127.49 and 127.491, the at-risk amount of a taxpayer, in respect of a partnership of which the taxpayer is a limited partner, at any particular time is the amount, if any, by which the total of

(5) The portion of subsection 96(2.4) of the Act before paragraph (

a) is replaced by the following:

Limited partner

(2.4) For the purposes of this

section and sections 111, 127, 127.48 and 127.491, a taxpayer who is a member of a partnership at a particular time is a limited partner of the partnership at that time if the member’s partnership interest is not an exempt interest (within the meaning assigned by subsection (2.5)) at that time and if, at that time or within three years after that time,

(6) The portion of subsection 96(2.4) of the Act before paragraph (a), as enacted by subsection (5), is replaced by the following:

Limited partner

(2.4) For the purposes of this

section and sections 111, 127, 127.48, 127.49 and 127.491, a taxpayer who is a member of a partnership at a particular time is a limited partner of the partnership at that time if the member’s partnership interest is not an exempt interest (within the meaning assigned by subsection (2.5)) at that time and if, at that time or within three years after that time,

(7) Subsections (1), (3) and (5) are deemed to have come into force immediately after the expiration of March 27, 2023.

(8) Subsections (2), (4) and (6) are deemed to have come into force on January 1, 2024.

(1) Section 108 of the Act is amended by adding the following after subsection (2):

Interest rate hedging agreements

(2.1) For the purposes of subparagraph (2)(b)(iv), if an amount included in computing the income of a trust is derived from, or from the disposition of, an agreement that can reasonably be considered to have been made by the trust to reduce its risk from fluctuations in interest rates in respect of debt incurred by the trust to acquire or refinance property described in subparagraph (2)(b)(iii), the amount is deemed to be derived from that property.

(2) Subsection (1) applies to taxation years that end after 2021.

(1) Clause 111(1)(e)(ii)(

A) of the Act is replaced by the following:

(

A) the amount required by subsection 127(8) or 127.48(12) in respect of the partnership to be added in computing the investment tax credit or the clean hydrogen tax credit (as defined in subsection 127.48(1)) of the taxpayer for the taxation year,

(2) Clause 111(1)(e)(ii)(

A) of the Act, as enacted by subsection (1), is replaced by the following:

(

A) the amount required by subsection 127(8), 127.48(12) or 127.49(8) in respect of the partnership to be added in computing the investment tax credit, the clean hydrogen tax credit (as defined in subsection 127.48(1)) or the CTM investment tax credit (as defined in subsection 127.49(1)) of the taxpayer for the taxation year,

(3) Subsection (1) is deemed to have come into force immediately after the expiration of March 27, 2023.

(4) Subsection (2) is deemed to have come into force on January 1, 2024.

(1) Paragraph 116(5)(

a) of the French version of the Act is replaced by the following:

après enquête raisonnable, l’acheteur n’avait aucune raison de croire que la personne ne résidait pas au Canada;

(2) Paragraph 116(5.01)(

a) of the French version of the Act is replaced by the following:

après enquête raisonnable, l’acheteur en vient à la conclusion que la personne non-résidente est, aux termes d’un traité fiscal que le Canada a conclu avec un pays donné, un résident de ce pays;

(3) The portion of paragraph 116(5.3)(

a) of the French version of the Act before subparagraph (

i) is replaced by the following:

le contribuable, sauf si le paragraphe (5.01) s’applique à l’acquisition ou si, après enquête raisonnable, le contribuable n’avait pas de raison de croire que la personne non-résidente n’était pas un résident du Canada, est tenu de payer, au

titre de l’impôt prévu par la présente

partie pour l’année pour le compte de la personne non-résidente, 50 % de l’excédent du montant visé au sous-alinéa (

i) sur le montant visé au sous-alinéa (ii) :

(1) The portion of subsection 118.06(2) of the Act before paragraph (

a) is replaced by the following:

Volunteer firefighter tax credit

(2) For the purpose of computing the tax payable under this Part for a taxation year by an individual who performs eligible volunteer firefighting services in the year, there may be deducted the amount determined by multiplying $6,000 by the appropriate percentage for the taxation year if the individual

(2) Subsection (1) applies to the 2024 and subsequent taxation years.

(1) The portion of subsection 118.07(2) of the Act before paragraph (

a) is replaced by the following:

Search and rescue volunteer tax credit

(2) For the purpose of computing the tax payable under this Part for a taxation year by an individual who performs eligible search and rescue volunteer services in the year, there may be deducted the amount determined by multiplying $6,000 by the appropriate percentage for the taxation year if the individual

(2) Subsection (1) applies to the 2024 and subsequent taxation years.

(1) Paragraph 118.2(2)(

v) of the Act is replaced by the following:

(

v) to a fertility clinic, or donor bank, in Canada as a fee or other amount paid or payable, to obtain sperm, ova or embryos to enable the conception of a child by the individual, the individual’s spouse or common-law partner or a surrogate mother on behalf of the individual.

(2) Subsection (1) is deemed to have come into force on January 1, 2022.

(1) Subparagraph 120.2(1)(b)(

i) of the Act is replaced by the following:

(

i) the amount that, but for this section,

section 120 and subsection 120.4(2), would be the individual’s tax payable under this Part for the particular year if the individual were not entitled to any deduction under

section 126

(2) Paragraph 120.2(3)(

b) of the Act is replaced by the following:

(

b) the amount that, if this Act were read without reference to

section 120, would be the individual’s tax payable under this Part for the year if the individual were not entitled to any deduction under

section 126, and

(3) Subsections (1) and (2) apply to taxation years that begin after December 31, 2023.

Paragraph (

a) of the definition shared-custody parent in

section 122.6 of the English version of the Act is replaced by the following:

(

a) are not at that time cohabiting spouses or common-law partners of each other,

(1) Section 122.62 of the Act is amended by adding the following after subsection (8):

Death of child — qualified dependant

(9) For the purposes of this Subdivision (other than subsection (4)), a person is deemed to be a qualified dependant at the beginning of a month if

(

a) the person died in any of the six preceding months;

(

b) the person’s date of birth was not 18 years or more prior to the beginning of the month; and

(

c) the person was a qualified dependant immediately prior to their death.

Death of child — eligible individual

(10) For the purposes of this Subdivision (other than subsection (4)), a person is deemed to be an eligible individual in respect of a qualified dependant at the beginning of a month if

(

a) that qualified dependant is a qualified dependant at the beginning of that month because of subsection (9); and

(

b) the person was an eligible individual in respect of the qualified dependant immediately before the qualified dependant’s death.

Death of child

(11) For the purposes of paragraphs (

a) and (

b) of the description of E in subsection 122.61(1), if a person is deemed to be a qualified dependant at the beginning of a month because of subsection (9), the person is deemed to be the age at the beginning of that month that the person would have been at the beginning of that month had the person not died.

Death of child — disability tax credit

(12) For the purposes of paragraph (

a) of the description of N in subsection 122.61(1), if a person died on or after July 1 of a particular taxation year and an amount could have been deducted in respect of that person under

section 118.3 for that taxation year, an amount is deemed to be deductible under

section 118.3 in respect of that person for the immediately following taxation year.

(2) Subsection (1) applies in respect of the death of a person that occurs after 2024.

(1) Subsection 122.92(1) of the Act is amended by adding the following in alphabetical order:

return of income , in respect of an eligible individual for a taxation year, means the eligible individual’s return of income (other than a return of income under subsection 70(2) or 104(23), paragraph 128(2)(

e) or subsection 150(4)) that is required to be filed for the taxation year or that would be required to be filed if the eligible individual had tax payable under this Part for the taxation year. ( déclaration de revenu )

(2) Subsection (1) is deemed to have come into force on January 1, 2022.

(1) The definition qualifying labour expenditure in subsection 125.6(1) of the Act is replaced by the following:

qualifying labour expenditure of a taxpayer for a taxation year in respect of an eligible newsroom employee, for a taxation year

(

a) that begins before 2023 and ends after 2022, means the lesser of

(

i) the amount determined by the formula

$85,000 × A ÷ 365 where A

is the lesser of 365 and the number of days in the taxation year that are after 2022 during which the taxpayer is a qualifying journalism organization, and

(ii)

the amount determined by the formula

A − B where A

is the amount determined by the formula

C × D ÷ E where C

is the salary or wages payable by the taxpayer to the eligible newsroom employee in respect of the portion of the taxation year throughout which the taxpayer is a qualifying journalism organization,

is the number of days in the taxation year that are after 2022 during which the taxpayer is a qualifying journalism organization, and

is the number of days in the taxation year during which the taxpayer is a qualifying journalism organization, and

is the amount determined by the formula

F × G ÷ H where F

is the total of all amounts each of which is an amount of assistance that

(

A) the taxpayer has received, is entitled to receive or can reasonably be expected to receive, in respect of amounts described in C, and

(

B) has not been repaid before the end of the year pursuant to a legal obligation to do so,

is the number of days in the taxation year that are after 2022 during which the taxpayer is a qualifying journalism organization, and

is the number of days in the taxation year during which the taxpayer is a qualifying journalism organization; and

(

b) that begins after 2022, means the lesser of

(

i) the amount determined by the formula

$85,000 × A ÷ 365 where A

is the lesser of 365 and the number of days in the taxation year during which the taxpayer is a qualifying journalism organization, and

(ii)

the amount determined by the formula

A − B where A

is the salary or wages payable by the taxpayer to the eligible newsroom employee in respect of the portion of the taxation year throughout which the taxpayer is a qualifying journalism organization, and

is the total of all amounts each of which is an amount of assistance that

(

A) the taxpayer has received, is entitled to receive or can reasonably be expected to receive, in respect of amounts described in A, and

(

B) has not been repaid before the end of the year pursuant to a legal obligation to do so. ( dépense de main-d’oeuvre admissible )

(2) Subsection 125.6(1) of the Act is amended by adding the following in alphabetical order:

low threshold qualifying labour expenditure of a taxpayer for a taxation year that begins before 2023 and ends after 2022, in respect of an eligible newsroom employee, means the lesser of

(

a) the amount determined by the formula

$55,000 × A ÷ 365 where A

is the lesser of 365 and the number of days in the taxation year that are before 2023 during which the taxpayer is a qualifying journalism organization, and

(

b) the amount determined by the formula

A − B where A

is the amount determined by the formula

C × D ÷ E where C

is the salary or wages payable by the taxpayer to the eligible newsroom employee in respect of the portion of the taxation year throughout which the taxpayer is a qualifying journalism organization,

is the number of days in the taxation year that are before 2023 during which the taxpayer is a qualifying journalism organization, and

is the number of days in the taxation year during which the taxpayer is a qualifying journalism organization, and

is the amount determined by the formula

F × G ÷ H where F

is the total of all amounts each of which is an amount of assistance that

(

i) the taxpayer has received, is entitled to receive or can reasonably be expected to receive, in respect of amounts described in C, and

(ii)

has not been repaid before the end of the year pursuant to a legal obligation to do so,

is the number of days in the taxation year that are before 2023 during which the taxpayer is a qualifying journalism organization, and

is the number of days in the taxation year during which the taxpayer is a qualifying journalism organization. ( seuil inférieur de dépense de main-d’oeuvre admissible )

(3) Subsections 125.6(2) and (2.1) of the Act are replaced by the following:

Tax credit

(2) A taxpayer (other than a partnership) that is a qualifying journalism organization at any time in a taxation year and that files a prescribed form containing prescribed information with its return of income for the year is deemed to have, on its balance-due day for the year, paid on account of its tax payable under this Part for the year

(

a) if the year begins before 2023 and ends after 2022, an amount determined by the formula

0.25 × A + 0.35 × B − C where A

is the total of all amounts each of which is a low threshold qualifying labour expenditure of the qualifying journalism organization for the year in respect of an eligible newsroom employee,

is the total of all amounts each of which is a qualifying labour expenditure of the qualifying journalism organization for the year in respect of an eligible newsroom employee, and

is the amount received by the taxpayer from the Aid to Publishers component of the Canada Periodical Fund in the year;

(

b) if the year begins after 2022 and ends before 2027, an amount determined by the formula

0.35 × A − B where A

is the total of all amounts each of which is a qualifying labour expenditure of the qualifying journalism organization for the year in respect of an eligible newsroom employee, and

is the amount received by the taxpayer from the Aid to Publishers component of the Canada Periodical Fund in the year;

(

c) if the year begins before 2027 and ends after 2026, an amount determined by the formula

0.35 × A + 0.25 × B − C where A

is the amount determined by the formula

D × E ÷ F where D

is the total of all amounts each of which is a qualifying labour expenditure of the qualifying journalism organization for the year in respect of an eligible newsroom employee,

is the number of days in the taxation year that are before 2027 during which the taxpayer is a qualifying journalism organization, and

is the number of days in the taxation year during which the taxpayer is a qualifying journalism organization,

is the amount determined by the formula

G × H ÷ I where G

is the total of all amounts each of which is a qualifying labour expenditure of the qualifying journalism organization for the year in respect of an eligible newsroom employee,

is the number of days in the taxation year that are after 2026 during which the taxpayer is a qualifying journalism organization, and

is the number of days in the taxation year during which the taxpayer is a qualifying journalism organization, and

is the amount received by the taxpayer from the Aid to Publishers component of the Canada Periodical Fund in the year; and

(

d) if the year begins after 2026, an amount determined by the formula

0.25 × A − B where A

is the total of all amounts each of which is a qualifying labour expenditure of the qualifying journalism organization for the year in respect of an eligible newsroom employee, and

is the amount received by the taxpayer from the Aid to Publishers component of the Canada Periodical Fund in the year.

Partnership — tax credit

(2.1) If a taxpayer (other than a partnership) is a member of a partnership (other than a specified member of the partnership) at the end of a fiscal period of the partnership that ends in a taxation year of the taxpayer, the partnership is a qualifying journalism organization at any time in that fiscal period and the partnership files an information return in prescribed form containing prescribed information for that fiscal period, then the taxpayer is deemed to have, on the taxpayer’s balance-due day for the taxation year, paid on account of the taxpayer’s tax payable under this Part for the taxation year

(

a) if the fiscal period begins before 2023 and ends after 2022, an amount determined by the formula

(0.25 × A + 0.35 × B − C) × D ÷ E where A

is the total of all amounts each of which is a low threshold qualifying labour expenditure of the qualifying journalism organization for the fiscal period in respect of an eligible newsroom employee,

is the total of all amounts each of which is a qualifying labour expenditure of the qualifying journalism organization for the fiscal period in respect of an eligible newsroom employee,

is the amount received by the qualifying journalism organization from the Aid to Publishers component of the Canada Periodical Fund in the fiscal period,

is the specified proportion of the taxpayer for the fiscal period, and

is the total of all specified proportions of members of the partnership for the fiscal period, other than members that are partnerships or specified members of the partnership;

(

b) if the fiscal period begins after 2022 and ends before 2027, an amount determined by the formula

(0.35 × A − B) × C ÷ D where A

is the total of all amounts each of which is a qualifying labour expenditure of the qualifying journalism organization for the fiscal period in respect of an eligible newsroom employee,

is the amount received by the qualifying journalism organization from the Aid to Publishers component of the Canada Periodical Fund in the fiscal period,

is the specified proportion of the taxpayer for the fiscal period, and

is the total of all specified proportions of members of the partnership for the fiscal period, other than members that are partnerships or specified members of the partnership;

(

c) if the fiscal period begins before 2027 and ends after 2026, an amount determined by the formula

(0.35 × A + 0.25 × B − C) × D ÷ E where A

is the amount determined by the formula

F × G ÷ H where F

is the total of all amounts each of which is a qualifying labour expenditure of the qualifying journalism organization for the fiscal period in respect of an eligible newsroom employee,

is the number of days in the fiscal period that are before 2027 during which the partnership is a qualifying journalism organization, and

is the number of days in the fiscal period during which the partnership is a qualifying journalism organization,

is the amount determined by the formula

I × J ÷ K where I

is the total of all amounts each of which is a qualifying labour expenditure of the qualifying journalism organization for the fiscal period in respect of an eligible newsroom employee,

is the number of days in the fiscal period that are after 2026 during which the partnership is a qualifying journalism organization, and

is the number of days in the fiscal period during which the partnership is a qualifying journalism organization,

is the amount received by the qualifying journalism organization from the Aid to Publishers component of the Canada Periodical Fund in the fiscal period,

is the specified proportion of the taxpayer for the fiscal period, and

is the total of all specified proportions of members of the partnership for the fiscal period, other than members that are partnerships or specified members of the partnership; and

(

d) if the fiscal period begins after 2026, an amount determined by the formula

(0.25 × A − B) × C ÷ D where A

is the total of all amounts each of which is a qualifying labour expenditure of the qualifying journalism organization for the fiscal period in respect of an eligible newsroom employee,

is the amount received by the qualifying journalism organization from the Aid to Publishers component of the Canada Periodical Fund in the fiscal period,

is the specified proportion of the taxpayer for the fiscal period, and

is the total of all specified proportions of members of the partnership for the fiscal period, other than members that are partnerships or specified members of the partnership.

(4) Subsections (1) to (3) are deemed to have come into force on January 1, 2023.

(1) Paragraph (

a) of the definition flow-through mining expenditure in subsection 127(9) of the Act is replaced by the following:

(

a) that is a Canadian exploration expense incurred by a corporation after March 2024 and before 2026 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2026) in conducting mining exploration activity from or above the surface of the earth for the purpose of determining the existence, location, extent or quality of a mineral resource described in paragraph (

a) or (

d) of the definition mineral resource in subsection 248(1),

(2) Paragraphs (

c) and (

d) of the definition flow-through mining expenditure in subsection 127(9) of the Act are replaced by the following:

(

c) an amount in respect of which is renounced in accordance with subsection 66(12.6) by the corporation to the taxpayer (or a partnership of which the taxpayer is a member) under an agreement described in that subsection and made after March 2024 and before April 2025,

(

d) that is not an expense that was renounced under subsection 66(12.6) to the corporation (or a partnership of which the corporation is a member), unless that renunciation was under an agreement described in that subsection and made after March 2024 and before April 2025, and

(3) The definition government assistance in subsection 127(9) of the Act is replaced by the following:

government assistance means assistance from a government, municipality or other public authority whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance, other than as an excluded loan (as defined in subsection 12(11)) or as a deduction under subsection (5) or (6); ( aide gouvernementale )

(4) The definition government assistance in subsection 127(9) of the Act, as enacted by subsection (3), is replaced by the following:

government assistance means assistance from a government, municipality or other public authority whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance, other than as an excluded loan (as defined in subsection 12(11)) or as a deduction under subsection (5) or (6) or a deemed payment on account of tax payable under subsection 127.48(2); ( aide gouvernementale )

(5) The definition government assistance in subsection 127(9) of the Act, as enacted by subsection (4), is replaced by the following:

government assistance means assistance from a government, municipality or other public authority whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance, other than as an excluded loan (as defined in subsection 12(11)) or as a deduction under subsection (5) or (6) or a deemed payment on account of tax payable under subsection 127.48(2) or 127.49(2); ( aide gouvernementale )

(6) Subsections (1) and (2) apply in respect of expenses renounced under a flow-through share agreement entered into after March 2024.

(7) Subsection (3) is deemed to have come into force on January 1, 2020, and applies to loans made after December 31, 2019.

(8) Subsection (4) is deemed to have come into force immediately after the expiration of March 27, 2023.

(9) Subsection (5) is deemed to have come into force on January 1, 2024.

The Act is amended by adding the following after

section 127.42:

Definitions

127.421

(1) The following

definitions apply in this section.

designated province means a province specified by the Minister of Finance for a calendar year. ( province déterminé

e) fuel return specified , for a designated province for a calendar year, means the amount specified by the Minister of Finance for a person employed by a corporation for the designated province for the calendar year. ( montant lié aux carburants spécifié )

person employed , by a corporation for a calendar year, means a person who was at any time in the calendar year employed by the corporation and in respect of whom the corporation issued (or a payroll service provider issued on behalf of the corporation) a statement of remuneration paid. ( personne employée )

2023 business number means the business number of a corporation which the corporation used to make remittances for employees for the corporation’s last taxation year ending in 2023. ( numéro d’entreprise 2023 )

Deemed amount 2019-2023

(2) A corporation that files, on or before July 15, 2024, a return of income for a taxation year ending in 2023 (other than a final return on dissolution) is deemed to have paid on a date specified by the Minister of Finance, on account of tax payable under this Part for that taxation year, the total of all amounts, each of which is an amount, for each designated province, for each calendar year that is 2019, 2020, 2021, 2022 and 2023, determined by the formula

A × B × C where A

is the fuel return specified for the designated province, for the calendar year;

(

a) if the total number of persons each of whom was a person employed by the corporation in a province at any time in the calendar year exceeds 499, nil, and

(

b) in any other case, the total number of persons, each of whom was a person employed by the corporation in the designated province in the calendar year; and

(

a) if the corporation was a Canadian-controlled private corporation at all times in the taxation year ending in 2023, 1, and

(

b) in any other case, nil.

Deemed amount after 2023

(3) A corporation that files a return of income for a particular taxation year ending in a calendar year after 2023 (other than a final return on dissolution) is, if the return is filed on or before July 15 of the following calendar year, deemed to have paid on its balance-due day for the year, on account of tax payable under this Part for the particular taxation year, the total of all amounts, each of which is an amount, for each designated province for the calendar year, determined by the formula

A × B × C where A

is the fuel return specified for the designated province, for the calendar year;

(

a) if the total number of persons each of whom was a person employed by the corporation in a province at any time in the calendar year exceeds 499, nil, and

(

b) in any other case, the total number of persons, each of whom was a person employed by the corporation in the designated province in the calendar year; and

(

a) if the corporation was a Canadian-controlled private corporation at all times in the particular taxation year, 1, and

(

b) in any other case, nil.

Authority to specify

(4) For the purposes of this section, the Minister of Finance may specify for a calendar year

(

a) the designated provinces; and

(

b) the fuel return specified for a designated province.

Amount not specified

(5) For the purposes of this section, if the Minister of Finance does not specify a fuel return specified for a designated province for a calendar year under paragraph (4)(b), the fuel return specified for the designated province for the calendar year is deemed to be nil.

Assistance received

(6) For the purposes of this Act, an amount deemed by this

section to have been paid on account of tax payable for a taxation year is assistance received by the taxpayer from a government in the taxation year in which the assistance is received.

Deemed rebate in respect of fuel charges

(7) An amount for a designated province included in the total of all amounts deemed by this

section to have been paid on account of tax payable for a taxation year is deemed to have been paid during the taxation year as a rebate in respect of charges levied under

Part 1 of the Greenhouse Gas Pollution Pricing Act in respect of the designated province.

Predecessor corporation

(8) For the purposes of subsection (2), where there has been an amalgamation or merger of two or more corporations before 2023, the corporation filing a return of income in 2023 is deemed to be the same corporation as and a continuation of each predecessor corporation that was registered with the Minister to make remittances required under

section 153 under the corporation’s 2023 business number.

Predecessor corporation

(9) For the purposes of subsections (2) and (3), the number of persons employed by a corporation in a calendar year after 2022 is deemed to be nil in that year if the corporation is formed by an amalgamation or merger in that calendar year.

Province of employment

(10) For the purposes of this section, if a person is employed by the same corporation in more than one province in a calendar year, the person is deemed to be employed throughout the calendar year by that corporation in the province in respect of which the person has received the highest amount of remuneration paid by the corporation and is deemed not to be employed in any other province in the calendar year.

Deemed taxation year

(11) For the purposes of subsection (3), if a corporation has more than one taxation year ending in the same calendar year, the particular taxation year is the first taxation year that ends in that calendar year.

(1) The heading before

section 127.43 of the Act is repealed.

(2) Subsection (1) is deemed to have come into force on January 1, 2022.

(1) The Act is amended by adding the following before Division E.1 of

Part I:

Definitions

127.48

(1) The following

definitions apply in this section.

actual carbon intensity means the carbon intensity of hydrogen that is produced by a qualified clean hydrogen project of a taxpayer, based on the actual inputs to the production of hydrogen and actual emissions from the production of hydrogen by the project. ( intensité carbonique réelle )

average actual carbon intensity means, for the compliance period of a clean hydrogen project, the number determined by the formula

((A × B) + (C × D) + (E × F) + (G × H) + (I × J)) ÷ K where A

is the actual carbon intensity of the project for the first operating year of the compliance period;

is the quantity, in kilograms, of hydrogen produced by the project in the first operating year of the compliance period;

is the actual carbon intensity of the project for the second operating year of the compliance period;

is the quantity, in kilograms, of hydrogen produced by the project in the second operating year of the compliance period;

is the actual carbon intensity of the project for the third operating year of the compliance period;

is the quantity, in kilograms, of hydrogen produced by the project in the third operating year of the compliance period;

is the actual carbon intensity of the project for the fourth operating year of the compliance period;

is the quantity, in kilograms, of hydrogen produced by the project in the fourth operating year of the compliance period;

is the actual carbon intensity of the project for the fifth operating year of the compliance period;

is the quantity, in kilograms, of hydrogen produced by the project in the fifth operating year of the compliance period; and

is the total quantity, in kilograms, of hydrogen produced by the project during the compliance period. ( intensité carbonique réelle moyenne )

captured carbon means captured carbon dioxide that

(

a) would otherwise be released into the atmosphere; or

(

b) is captured directly from the ambient air. ( carbone capté )

carbon dioxide equivalent means the carbon dioxide emissions that would be required to produce a warming effect equivalent to the emissions of any specified greenhouse gas, as determined in accordance with the Clean Hydrogen Investment Tax Credit – Carbon Intensity Modelling Guidance Document published by the Government of Canada over an assessment period of 100 years. ( équivalent en dioxyde de carbone )

carbon intensity means the quantity in kilograms of carbon dioxide equivalent per kilogram of hydrogen produced. ( intensité carbonique )

CCUS process means the process of carbon capture, utilization and storage that includes the

(

a) capture of carbon dioxide

(

i) that would otherwise be released into the atmosphere, or

(ii)

directly from the ambient air; and

(

b) storage or use of the captured carbon. ( processus de CUSC )

CCUS project means a project that is intended to support a CCUS process by

(

a) capturing carbon dioxide

(

i) that would otherwise be released into the atmosphere, or

(ii)

directly from the ambient air;

(

b) transporting captured carbon; or

(

c) storing or using captured carbon. ( projet de CUSC )

CFR carbon intensity means carbon intensity as defined in subsection 1(1) of the Clean Fuel Regulations . ( intensité carbonique selon le RCP )

clean ammonia means ammonia produced from clean hydrogen. ( ammoniac propre )

clean ammonia equipment means equipment that is used solely for the purpose of producing ammonia, including equipment for

(

a) converting hydrogen into ammonia;

(

b) heat recovery and conversion;

(

c) nitrogen generation;

(

d) feed storage (unless the feed is stored hydrogen) and feed compression; and

(

e) on-site refrigeration, transportation and storage of ammonia. ( matériel pour ammoniac propre )

clean hydrogen means hydrogen produced, whether solely or in conjunction with other gases, that has a carbon intensity of less than four. ( hydrogène propre )

clean hydrogen project of a taxpayer means a project involving

(

a) the operation of eligible clean hydrogen property;

(

b) the production of clean hydrogen; and

(

c) if applicable, the production of clean ammonia that uses a feedstock of clean hydrogen produced by the project. ( projet pour l’hydrogène propre )

clean hydrogen project plan means a plan for a clean hydrogen project of a taxpayer that

(

a) includes a front-end engineering design study (or an equivalent study as determined by the Minister of Natural Resources) for the project;

(

b) sets out the expected sources of electricity to be consumed in connection with the project, including sources described in any eligible power purchase agreements;

(

c) sets out the expected carbon intensity of the hydrogen to be produced by the project

(

i) determined in accordance with subsection (6), and

(ii)

supported by a report prepared by a qualified validation firm in respect of the project that includes attestations by the firm that

(

A) the assumptions in the modelling of the expected carbon intensity are reasonable, and

(

B) the expected carbon intensity has been determined in accordance with the Clean Hydrogen Investment Tax Credit – Carbon Intensity Modelling Guidance Document published by the Government of Canada;

(

d) if the project is intended to produce clean ammonia, demonstrates

(

i) that the project can reasonably be expected to have sufficient hydrogen production capacity to satisfy the needs of the taxpayer’s ammonia production facility, and

(ii)

if the taxpayer’s hydrogen production facility and its ammonia production facility are not co-located, the feasibility of transporting hydrogen between the facilities;

(

e) contains any information required in guidelines published by the Minister of Natural Resources, including the Clean Hydrogen Investment Tax Credit – Validation and Verification Guidance Document ; and

(

f) is filed by the taxpayer with the Minister of Natural Resources, in the form and manner determined by the Minister of Natural Resources. ( plan de projet pour l’hydrogène propre )

clean hydrogen tax credit of a qualifying taxpayer for a taxation year means

(

a) the total of all amounts each of which is the specified percentage of the capital cost to the taxpayer of an eligible clean hydrogen property that is acquired by the taxpayer in the year; and

(

b) the total of all amounts required by subsection (12) to be added in computing the taxpayer’s clean hydrogen tax credit at the end of the year. ( crédit d’impôt pour l’hydrogène propre )

compliance period in respect of a clean hydrogen project of a taxpayer, means the period of time beginning on the first day of the compliance period of the project and ending on the last day of the fifth operating year of the project. ( période de conformité )

dual-use electricity and heat equipment means equipment that is part of a clean hydrogen project (excluding electricity generation equipment that supports the project indirectly by way of an electrical utility grid), that supports the production of hydrogen from eligible hydrocarbons and that

(

a) generates electrical energy, heat energy or a combination of electrical and heat energy, and more than 50% of either the electrical energy or heat energy that is expected to be produced over the first 20 years of the project’s operations, based on the most recent clean hydrogen project plan, is expected to support

(

i) a CCUS project, unless the equipment uses fossil fuels and emits carbon dioxide that is not subject to capture by a CCUS process, or

(ii)

a qualified clean hydrogen project, unless the equipment uses fossil fuels and emits carbon dioxide that is not subject to capture by a CCUS process; or

(

b) is equipment that directly transmits electrical energy from equipment described in paragraph (

a) to a qualified clean hydrogen project and more than 50% of the electrical energy to be transmitted by the equipment over the first 20 years of the project’s operations, based on the most recent clean hydrogen project plan, is expected to support the CCUS project or qualified clean hydrogen project. ( matériel pour électricité et chaleur à double usage )

dual-use hydrogen and ammonia equipment means equipment that is part of a clean hydrogen project and that is used for the generation of oxygen or nitrogen to be used all or substantially all in hydrogen and ammonia production for the project. ( matériel pour hydrogène et ammoniac à double usage )

eligible clean hydrogen property means property, other than excluded property, that

(

a) is acquired by a qualifying taxpayer and becomes available for use in respect of a qualified clean hydrogen project of the taxpayer in Canada on or after March 28, 2023, determined without reference to subsection (5);

(

b) has not been used, or acquired for use or lease, by any person or partnership for any purpose whatever before it was acquired by the taxpayer; and

(

c) is property situated in Canada

(

i) that is used all or substantially all to produce hydrogen through electrolysis of water, including electrolysers, rectifiers, purification equipment, water treatment and conditioning equipment and equipment used for hydrogen compression and storage,

(ii)

that is used all or substantially all to produce hydrogen from eligible hydrocarbons, including pre-reformers, auto-thermal reformers, steam methane reformers, pre-heating equipment, syngas coolers, shift reactors, purification equipment, fired heaters, water treatment and conditioning equipment, equipment used in hydrogen compression and storage of hydrogen, oxygen production equipment and methanators,

(iii)

that is

(

A) clean ammonia equipment,

(

B) dual-use electricity and heat equipment,

(

C) dual-use hydrogen and ammonia equipment, or

(

D) project support equipment,

(iv)

that is physically and functionally integrated with equipment described in any of subparagraphs (

i) to (iii) and that is ancillary equipment used solely to support the functioning of equipment described in any of subparagraphs (

i) to (iii) within a hydrogen or ammonia production process as part of

(

A) an electrical system,

(

B) a feed supply system,

(

C) a fuel supply system,

(

D) a liquid delivery and distribution system,

(

E) a cooling system,

(

F) a process material storage and handling and distribution system,

(

G) a process venting system,

(

H) a process waste management system, or

(

I) a utility air or nitrogen distribution system,

(

v) that is equipment used for system safety and integrity, or as part of a control or monitoring system, solely to support equipment described in any of subparagraphs (

i) to (iv), or

(vi)

that is property used solely to convert another property that would not otherwise be described in subparagraphs (

i) to (

v) if the conversion causes the other property to satisfy the description in any of subparagraphs (

i) to (v). ( bien admissible pour l’hydrogène propre )

eligible electricity generation source means, at any time, an electricity generation source that is

(

a) wind;

(

b) solar;

(

c) hydro;

(

d) nuclear; or

(

e) geothermal or tidal, if, at that time,

(

i) a technology-specific input carbon intensity for the generation source is available in the Fuel LCA Model, and

(ii)

guidance in respect of the generation source is included in the Clean Hydrogen Investment Tax Credit – Carbon Intensity Modelling Guidance Document published by the Government of Canada. ( source admissible de production d’électricité )

eligible hydrocarbon means, at any time,

(

a) natural gas;

(

b) a substance sourced all or substantially all from raw natural gas;

(

c) an eligible renewable hydrocarbon; or

(

d) a substance that is

(

i) a by-product from processing one or more substances described in paragraph (

a) or (b), and

(ii)

included in the Clean Hydrogen Investment Tax Credit – Carbon Intensity Modelling Guidance Document published by the Government of Canada at that time. ( hydrocarbure admissible )

eligible pathway means the production of hydrogen

(

a) from electrolysis of water; or

(

b) from the reforming or partial oxidation of eligible hydrocarbons, with carbon dioxide captured using a CCUS process. ( méthode admissible )

eligible power purchase agreement means an agreement or other arrangement in writing that

(

a) allows, or will allow, a taxpayer to purchase electricity from an eligible electricity generation source (including incremental nameplate capacity) that

(

i) first commenced electricity generation on or after both

(

A) November 3, 2022, and

(

B) the earlier of the day that is

(I)

24 months before the taxpayer’s first clean hydrogen project plan is filed with the Minister of Natural Resources, and

(II)

36 months before the day on which hydrogen is first produced by the relevant clean hydrogen project of the taxpayer, and

(ii)

is located in

(

A) the same province as the clean hydrogen project and is connected to the electricity grid of that province,

(

B) the exclusive economic zone of Canada and is directly connected to the grid of the province in which the project is located, or

(

C) another province that has a provincial grid that is directly connected to the grid of the province in which the project is located, if the taxpayer has arranged for the necessary interprovincial transmission;

(

b) grants, or will grant, the taxpayer the sole and exclusive right to the environmental attributes associated with the electricity; and

(

c) is entered into by the taxpayer for the primary purpose of operating the taxpayer’s clean hydrogen project during all or any portion of the first 20 years of the project’s operations. ( entente pour l’achat d’électricité admissible )

eligible renewable hydrocarbon , in respect of a taxpayer, means a substance

(

a) that is produced from non-fossil carbon;

(

b) in respect of which a CFR carbon intensity can be determined under the Clean Fuel Regulations ;

(

c) that is included in the Clean Hydrogen Investment Tax Credit – Carbon Intensity Modelling Guidance Document published by the Government of Canada at the time that the taxpayer files its most recent clean hydrogen project plan with the Minister of Natural Resources;

(

d) that is sourced from a facility that first commenced production of the substance on or after both

(

i) November 3, 2022, and

(ii)

the earlier of the day that is

(A)

24 months before the taxpayer’s first clean hydrogen project plan is filed with the Minister of Natural Resources, and

(B)

36 months before the day on which hydrogen is first produced by the relevant clean hydrogen project of the taxpayer;

(

e) that, if acquired by the taxpayer under an agreement, the agreement grants, or will grant, the taxpayer the sole and exclusive right to the environmental attributes associated with the substance; and

(

f) that is acquired or produced by the taxpayer for the sole purpose of operating the clean hydrogen project during all or any portion of the first 20 years of the project’s operations. ( hydrocarbure renouvelable admissible )

excluded property means property that is

(

a) used solely

(

i) to support a CCUS project, or

(ii)

for using captured carbon in industrial production (including for enhanced oil recovery);

(

b) equipment used for the off-site transmission, transportation or distribution of hydrogen or ammonia;

(

c) equipment used to prepare hydrogen for transport, including liquefaction equipment and equipment used to compress hydrogen to levels suitable for transportation;

(

d) an automotive vehicle or related refuelling or charging equipment;

(

e) a building or other structure;

(

f) construction equipment, furniture or office equipment; or

(

g) equipment used for off-site storage. ( bien exclu )

expected carbon intensity means the carbon intensity of hydrogen that is expected to be produced by a particular clean hydrogen project of a taxpayer, as documented in the taxpayer’s clean hydrogen project plan in respect of the project. ( intensité carbonique attendue )

first day of the compliance period means, in respect of a clean hydrogen project of a taxpayer,

(

a) unless paragraph (

b) or (

c) applies, the particular day that is 120 days after the day on which hydrogen is first produced by the project;

(

b) if the taxpayer files an election in prescribed form and manner with the Minister with its return of income for the taxation year that includes the particular day referred to in paragraph (a), the day that is one year after the particular day; or

(

c) if the taxpayer has filed an election under paragraph (

b) and files a second election in prescribed form and manner with the Minister with its return of income for the taxation year that includes the day referred to in paragraph (b), the day that is two years after the particular day referred to in paragraph (a). ( premier jour de la période de conformité )

Fuel LCA Model means the Government of Canada’s Fuel Life Cycle Assessment Model that is published by the Minister of the Environment. ( modèle ACV des combustibles )

government assistance has the same meaning as in subsection 127(9). ( aide gouvernementale )

ineligible use means

(

a) the emission of captured carbon into the atmosphere, other than

(

i) for the purposes of system integrity or safety, or

(ii)

incidental emission made in the ordinary course of operations;

(

b) the storage or use of captured carbon for enhanced oil recovery; and

(

c) any other storage or use that is not

(

i) the storage of captured carbon in a geological formation located in a jurisdiction within Canada or the United States that has environmental laws and enforcement governing the permanent storage of captured carbon, or

(ii)

the use of captured carbon in producing concrete in Canada or the United States using a process that mineralizes and permanently stores at least 60% of the captured carbon that is injected into the concrete. ( utilisation non admissible )

input carbon intensity in relation to a fuel, energy source or material input, means the quantity in kilograms of carbon dioxide equivalent per unit of fuel, energy source or material input that is released over the life cycle of that fuel, energy source or material input. ( intensité carbonique entrante )

non-government assistance has the same meaning as in subsection 127(9). ( aide non gouvernementale )

non-hydrogen or ammonia use means a use of a particular property at a particular time that would, if the property were acquired at that time, result in the property ceasing to be an eligible clean hydrogen property , determined without reference to paragraph (

b) of that definition. ( utilisation autre que pour l’hydrogène ou l’ammoniac )

operating year means each cumulative 365-day period, the first of which begins on the first day of the compliance period of a taxpayer’s clean hydrogen project, disregarding any period during which the project is not operating. ( année d’exploitation )

preliminary clean hydrogen work activity means an activity that is preliminary to the acquisition, construction, fabrication or installation by or on behalf of a taxpayer of eligible clean hydrogen property in respect of the taxpayer’s clean hydrogen project including, but not limited to, a preliminary activity that is

(

a) obtaining permits or regulatory approvals;

(

b) performing front-end design or engineering work, including front-end engineering design studies (or equivalent studies as determined by the Minister of Natural Resources) but excluding detailed design or engineering work in relation to eligible clean hydrogen property;

(

c) conducting feasibility studies or pre-feasibility studies (or equivalent studies as determined by the Minister of Natural Resources);

(

d) conducting environmental assessments; or

(

e) clearing or excavating land. ( travaux préliminaires pour l’hydrogène propre )

project support equipment means equipment that directly supports a qualified clean hydrogen project by

(

a) transmitting electrical energy from on-site electrical generation equipment directly to the project;

(

b) distributing electrical energy or heat energy; or

(

c) delivering, collecting, recovering, treating or recirculating water, or a combination of those activities. ( matériel de soutien du projet )

qualified clean hydrogen project means a clean hydrogen project of a taxpayer, as described in the taxpayer’s clean hydrogen project plan, where the Minister of Natural Resources has confirmed in writing that

(

a) the hydrogen will be produced from an eligible pathway;

(

b) the expected carbon intensity contained in the taxpayer’s most recent clean hydrogen project plan

(

i) is determined in accordance with subsection (6), and

(ii)

can reasonably be expected to be achieved based on the project design; and

(

c) if the project is intended to produce clean ammonia, the taxpayer has demonstrated

(

i) that the project can reasonably be expected to have sufficient hydrogen production capacity to satisfy the needs of the taxpayer’s ammonia production facility, and

(ii)

if the taxpayer’s hydrogen production facility and its ammonia production facility are not co-located, the feasibility of transporting hydrogen between the facilities. ( projet admissible pour l’hydrogène propre )

qualified validation firm means, in respect of a clean hydrogen project of a taxpayer, an engineer or engineering firm that

(

a) is registered and in good standing with a professional association that has the authority or recognition by law of a jurisdiction in Canada to regulate the profession of engineering in

(

i) the jurisdiction where the project is located, or

(ii)

if there is no professional association in the jurisdiction described in subparagraph (i), a jurisdiction in Canada where a professional association regulates the profession of engineering;

(

b) has appropriate insurance coverage;

(

c) has expertise in modelling using the Fuel LCA Model and engineering expertise in production processes for hydrogen and, if applicable, ammonia;

(

d) at all times, is independent of, deals at arm’s length with and is not an employee of the taxpayer; and

(

e) meets the requirements described in guidelines published by the Minister of Natural Resources, including the Clean Hydrogen Investment Tax Credit – Validation and Verification Guidance Document . ( firme admissible de validation )

qualified verification firm means, in respect of a clean hydrogen project of a taxpayer, an individual or firm that

(

a) is either

(

i) an engineer or an engineering firm that is registered and in good standing with a professional association that has the authority or recognition by law of a jurisdiction in Canada to regulate the profession of engineering in

(

A) the jurisdiction where the project is located, or

(

B) if there is no professional association in the jurisdiction described in clause (A), a jurisdiction in Canada where a professional association regulates the profession of engineering, or

(ii)

a verification body accredited and in good standing under the Clean Fuel Regulations ;

(

b) has appropriate insurance coverage;

(

c) has expertise in life-cycle analysis of greenhouse gas emissions;

(

d) at all times, is independent of, deals at arm’s length with and is not an employee of the taxpayer;

(

e) is not a qualified validation firm in respect of the project; and

(

f) meets the requirements described in guidelines published by the Minister of Natural Resources, including the Clean Hydrogen Investment Tax Credit – Validation and Verification Guidance Document . ( firme admissible de vérification )

qualifying taxpayer means a taxable Canadian corporation. ( contribuable admissible )

specified greenhouse gas means

(

a) carbon dioxide;

(

b) methane;

(

c) nitrous oxide;

(

d) sulphur hexafluoride; and

(

e) any other greenhouse gases listed in the Fuel LCA Model and included in the Clean Hydrogen Investment Tax Credit – Carbon Intensity Modelling Guidance Document published by the Government of Canada at the time that a taxpayer files its most recent clean hydrogen project plan with the Minister of Natural Resources. ( gaz à effet de serre déterminé )

specified percentage means

(

a) in respect of the capital cost of an eligible clean hydrogen property (other than equipment described in paragraph (b)) that is acquired by a qualifying taxpayer for use in a clean hydrogen project,

(

i) if the expected carbon intensity of the hydrogen to be produced by the project is less than 0.75 and the property is acquired

(

A) before 2034, 40%,

(

B) in 2034, 20%, and

(

C) after 2034, 0%,

(ii)

if the expected carbon intensity of the hydrogen to be produced by the project is 0.75 or greater and less than two and the property is acquired

(

A) before 2034, 25%,

(

B) in 2034, 12.5%, and

(

C) after 2034, 0%,

(iii)

if the expected carbon intensity of the hydrogen to be produced by the project is two or greater and less than four and the property is acquired

(

A) before 2034, 15%,

(

B) in 2034, 7.5%, and

(

C) after 2034, 0%, and

(iv)

if the expected carbon intensity of the hydrogen to be produced by the project is four or greater, 0%; and

(

b) in respect of the capital cost of eligible clean hydrogen property that is clean ammonia equipment or equipment described in any of subparagraphs (c)(iv) to (vi) of the definition eligible clean hydrogen property in this subsection that is used solely in connection with clean ammonia equipment acquired by a qualifying taxpayer for use in a clean hydrogen project,

(

i) subject to subparagraph (ii), if the equipment is acquired

(

A) before 2034, 15%,

(

B) in 2034, 7.5%, and

(

C) after 2034, 0%,

(ii)

if the expected carbon intensity of the hydrogen to be produced by the project and used in the production of ammonia is four or greater, 0%. ( pourcentage déterminé )

Clean hydrogen tax credit

(2) If a qualifying taxpayer files with its return of income for a taxation year a prescribed form containing prescribed information, the taxpayer is deemed to have paid on its balance-due day for the year an amount on account of the taxpayer’s tax payable under this Part for the year equal to the taxpayer’s clean hydrogen tax credit for the year.

Deemed deduction

(3) For the purposes of this section, paragraph 12(1)(t), subsection 13(7.1), variable I of the definition undepreciated capital cost in subsection 13(21), subsection 53(2) and sections 127.49 and 129, the amount deemed under subsection (2) to have been paid by a taxpayer for a taxation year is deemed to have been deducted from the taxpayer’s tax otherwise payable under this Part for the year.

Time limit for application

(4) A payment on account of tax payable shall not be deemed to be paid under subsection (2) if the taxpayer does not file with the Minister the prescribed form containing prescribed information described in subsection (2) in respect of the amount on or before the later of December 31, 2025 and the day that is one year after the taxpayer’s filing-due date for the year and, if the prescribed form is filed after the taxpayer’s filing-due date for the year, no payment by the taxpayer is deemed to arise under that subsection until the prescribed form containing prescribed information has been filed with the Minister.

Time of acquisition

(5) For the purpose of this section, eligible clean hydrogen property is deemed not to have been acquired before the property becomes available for use by the taxpayer, determined without reference to paragraphs 13(27)(

c) and (28)(d).

Calculation of carbon intensity

(6) For the purposes of calculating the carbon intensity of hydrogen produced and to be produced by a clean hydrogen project of a taxpayer,

(

a) the most recent Fuel LCA Model at the time of filing by the taxpayer of the most recent related clean hydrogen project plan with the Minister of Natural Resources shall be used, unless, at the time of filing any compliance report under subsection (16), the taxpayer elects to use a subsequent version of the Fuel LCA Model in calculating the actual carbon intensity of the project;

(

b) in applying the Fuel LCA Model, an assessment of emissions from the production of hydrogen by the project and upstream emissions from the production of inputs to the hydrogen-production process shall be taken into account;

(

c) the quantity of hydrogen produced by the project is to be adjusted to take into account any hydrogen that is consumed in the production process;

(

d) if the taxpayer produces hydrogen from eligible hydrocarbons, any captured carbon that is subject to an ineligible use is deemed not to be captured;

(

e) if, in connection with the project, the taxpayer generates or purchases, or proposes to generate or purchase, electricity that is

(

i) generated, or to be generated, by the taxpayer from

(

A) an eligible electricity generation source, the contribution of the electricity to carbon intensity is to correspond with the input carbon intensity of the technology-specific electricity in the Fuel LCA Model,

(

B) on-site generation equipment that converts hydrogen, heat recovered from the taxpayer’s hydrogen or ammonia production equipment or eligible hydrocarbons (with carbon dioxide captured using a CCUS process) into electricity that supports the production of hydrogen from eligible hydrocarbons, the contribution of the electricity to carbon intensity is to be modelled as part of the project,

(

C) a generator used for startup or emergency backup operations, the contribution of the electricity to carbon intensity is to be modelled as part of the project, and

(

D) a generation source other than as described in any of clauses (

A) to (C), the carbon intensity of the project is deemed to be greater than 4.5,

(ii)

purchased, or to be purchased, pursuant to an eligible power purchase agreement,

(

A) the contribution of the electricity to carbon intensity is to correspond with the input carbon intensity of the technology-specific electricity in the Fuel LCA Model, and

(

B) the contribution of the electricity to expected carbon intensity is to be calculated in proportion to the number of years for which the agreement will be in place during the first 20 years of the project’s operations, and

(iii)

otherwise sourced, or to be sourced, from a provincial grid, the contribution to carbon intensity of the net positive quantity of the electricity (after subtracting any electricity purchased by the taxpayer under an eligible power purchase agreement or generated by the taxpayer in respect of the project that is, in either case, transmitted to the grid by the taxpayer) is to be based on the input carbon intensity of the provincial grid in the Fuel LCA Model;

(

f) in calculating the quantity of electricity described in paragraph (e), if the sum of the quantities of electricity from sources described in subparagraphs (e)(

i) and (ii) exceeds the total electricity consumed or to be consumed by the project, then the electricity consumed or to be consumed by the project is deemed to be generated

(

i) first, from the source described in subparagraph (e)(i), and

(ii)

second, from the source described in subparagraph (e)(ii) to the extent of any excess;

(

g) if the project uses, or proposes to use, eligible hydrocarbons for the purpose of producing hydrogen,

(

i) where the eligible hydrocarbon is an eligible renewable hydrocarbon in respect of the taxpayer,

(

A) the contribution of that eligible renewable hydrocarbon to carbon intensity is to be based on the most recent CFR carbon intensity that is determined under the Clean Fuel Regulations , adjusted as necessary, and

(

B) the contribution of that eligible renewable hydrocarbon to expected carbon intensity is to be calculated in proportion to the number of years for which that hydrocarbon will be used during the first 20 years of the project’s operations, and

(ii)

in any other case, the input carbon intensity of the relevant eligible hydrocarbon is to be taken into account in applying the Fuel LCA Model;

(

h) if the taxpayer disposes of any environmental attributes associated with any electricity described in subparagraph (e)(

i) or (ii) or any eligible renewable hydrocarbon described in subparagraph (g)(i), the carbon intensity of the project is deemed to be greater than 4.5; and

(

i) the Clean Hydrogen Investment Tax Credit – Carbon Intensity Modelling Guidance Document published by the Government of Canada at the time of filing by the taxpayer of the most recent related clean hydrogen project plan with the Minister of Natural Resources, is to apply conclusively with respect to the calculation of carbon intensity, except as otherwise provided in this section.

Changes to clean hydrogen project

(7) Subsection (8) applies in respect of a qualified clean hydrogen project of a taxpayer if, before the first day of the compliance period of the project,

(

a) the Minister of Natural Resources determines that there has been a material change to the project design and requests that the taxpayer file a revised project plan for the project;

(

b) the taxpayer

(

i) does not file the final detailed engineering designs with the Minister of Natural Resources in accordance with paragraph (9)(d),

(ii)

changes the project’s eligible pathway, or

(iii)

reasonably expe