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(2) The portion of subsection 172(3) of the
Act after paragraph (g) is replaced by the
following:
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the applicant or the organization, foundation,
association or registered charity, as the case
may be, in a case described in paragraph (a) or
(a.1), the applicant in a case described in
paragraph (b), (d), (e) or (g), a trustee under
the plan or an employer of employees who are
beneficiaries under the plan, in a case
described in paragraph (c), the promoter in a
case described in paragraph (e.1), or the
administrator of the plan or an employer who
participates in the plan, in a case described in
paragraph (f) or (f.1), may appeal from the
Minister's decision, or from the giving of the
notice by the Minister, to the Federal Court of
Appeal.
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(3) Subsections (1) and (2) apply after
1997.
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47. (1) Subsection 180(1) of the Act is
amended by striking out the word ``or'' at
the end of paragraph (c) and by adding the
following after paragraph (c):
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(c.1) the sending of a notice to a promoter
of a registered education savings plan under
subsection 146.1(12.1), or
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(2) Subsection (1) applies after 1997.
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48. (1) The description of C in subsection
190.1(1.2) of the Act is replaced by the
following:
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C is the number of days in the year that are
after February 27, 1995 and before
November 1998.
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(2) Subsection (1) applies to taxation
years that end after February 27, 1995.
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49. (1) The formula in paragraph
204.2(1.1)(b) of the Act is replaced by the
following:
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A + B + R + C + D + E
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(2) Paragraph 204.2(1.1)(b) of the Act is
amended by striking out the word ``and'' at
the end of the description of D, by adding
the word ``and'' at the end of the description
of E and by adding the following after the
description of E:
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R is the individual's total pension
adjustment reversal for the year.
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(3) Subsections (1) and (2) apply to the
1998 and subsequent taxation years.
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50. (1) The heading ``REGISTERED
LABOUR-SPONSORED VENTURE
CAPITAL CORPORATIONS'' before
section 204.8 of the Act is replaced by the
following:
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(2) Subsection (1) applies after February
18, 1997.
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51. (1) The portion of the definition
``eligible investment'' in section 204.8 of the
Act after paragraph (d) is replaced by the
following:
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if the following conditions are satisfied:
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(e) immediately after the time the share
or debt obligation was issued, the
guarantee was provided or the option or
right was granted, as the case may be, the
total of the costs to the particular
corporation of all shares, options, rights
and debt obligations of the eligible
business entity and all corporations
related to it and 25% of the amount of all
guarantees provided by the particular
corporation in respect of debt obligations
of the eligible business entity and the
related corporations does not exceed the
lesser of $15,000,000 and 10% of the
shareholders' equity in the particular
corporation, determined in accordance
with generally accepted accounting
principles, on a cost basis and without
taking into account any unrealized gains
or losses on the investments of the
particular corporation, and
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(f) immediately before the time the share
or debt obligation was issued, the
guarantee was provided or the option or
right was granted, as the case may be,
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(i) the carrying value of the total assets
of the eligible business entity and all
corporations (other than prescribed
labour-sponsored venture capital
corporations) related to it (determined
in accordance with generally accepted
accounting principles on a
consolidated or combined basis, where
applicable) did not exceed
$50,000,000, and
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(A) the number of employees of the
eligible business entity and all
corporations related to it who
normally work at least 20 hours per
week for the entity and the related
corporations, and
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(B) 1/2 of the number of other
employees of the entity and the
related corporations,
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(2) Subsection (1) applies to property
acquired after February 18, 1997.
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52. (1) Clause 204.81(1)(c)(ii)(C) of the
Act is replaced by the following:
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(C) any additional classes of shares
that are authorized, if the rights,
privileges, restrictions and conditions
attached to the shares are approved by
the Minister of Finance,
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(2) Subsection (1) applies after 1996.
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53. (1) The portion of subsection
204.82(2) of the English version of the Act
before paragraph (a) is replaced by the
following:
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| Liability for
tax
|
(2) Where, at any time in a month in a
particular taxation year of a corporation that
was registered under this Part that began after
the end of the corporation's last taxation year
referred to in paragraph 204.81(6)(g), 60% of
the least of
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(2) Subsection 204.82(2) of the Act is
amended by striking out the word ``and'' at
the end of paragraph (a) and by adding the
following after that paragraph:
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(a.1) the amount of the shareholders' equity
in the corporation determined at the end of
the second taxation year before the
particular taxation year, without taking into
account any unrealized gains or losses in
respect of eligible investments of the
corporation, and
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(3) Subsection 204.82(2) of the Act, as
amended by subsections (1) and (2), is
replaced by the following:
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| Liability for
tax
|
(2) Each corporation that has been
registered under this Part shall, in respect of
each month that ends in a particular taxation
year of the corporation that begins after the
end of the corporation's last taxation year
referred to in paragraph 204.81(6)(g), pay a
tax under this Part equal to the amount
obtained when the greatest investment
shortfall at any time that is in the month and
in the particular year (in this section and
sections 204.81 and 204.83 referred to as the
``monthly deficiency'') is multiplied by 1/60
of the prescribed rate of interest during the
month.
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| Determination
of investment
shortfall
|
(2.1) Subject to subsection (2.2), a
corporation's investment shortfall at any time
in a particular taxation year is the amount
determined by the formula
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A - B
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where
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A is 60% of the lesser of
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(a) the amount of the shareholders'
equity in the corporation at the end of the
preceding taxation year, and
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(b) the amount of the shareholders'
equity in the corporation at the end of the
particular year; and
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B is the greater of
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(a) the total of all amounts each of which
is the adjusted cost to the corporation of
an eligible investment of the corporation
at that time, and
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(b) 50% of the total of all amounts each
of which is
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(i) the adjusted cost to the corporation
of an eligible investment of the
corporation at the beginning of the
particular year, or
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(ii) the adjusted cost to the corporation
of an eligible investment of the
corporation at the end of the particular
year.
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| Investment
shortfall
|
(2.2) For the purpose of computing a
corporation's investment shortfall under
subsection (2.1) at any time in a taxation year
(in this subsection referred to as the ``relevant
year''),
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(a) unrealized gains and losses in respect of
its eligible investments shall not be taken
into account in computing the amount of the
shareholders' equity in the corporation;
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(i) the relevant year ends after 1998, and
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(ii) it is expected that a redemption of its
Class A shares will occur after the end of
a particular taxation year and, as a
consequence, the amount of the
shareholders' equity in the corporation at
the end of the particular year would
otherwise be reduced to take into account
the expected redemption,
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subject to paragraph (c), the amount (or,
where the relevant year ends in 1999, 2000,
2001 or 2002, 20%, 40%, 60% or 80%,
respectively of the amount) expected to be
redeemed shall not be taken into account in
determining the amount of the
shareholders' equity in the corporation at
the end of the particular year;
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(c) paragraph (b) does not apply to a
redemption expected to be made after the
end of a taxation year where
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(i) the redemption is made within 60 days
after the end of the year, and
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(A) tax under Part XII.5 became
payable as a consequence of the
redemption, or
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(B) tax under Part XII.5 would not
have become payable as a
consequence of the redemption if the
redemption had occurred at the end of
the year; and
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(d) the adjusted cost to the corporation of an
eligible investment of the corporation at
any time is
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(i) where the eligible investment is a
property acquired by the corporation
after February 18, 1997 that would be an
eligible investment of the corporation if
the reference to ``$50,000,000'' in
paragraph (f) of the definition ``eligible
investment'' in section 204.8 were read
as ``$10,000,000'', 150% of the cost to
the corporation of the eligible investment
of the corporation at that time, and
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(ii) in any other case, the cost to the
corporation of the eligible investment of
the corporation at that time.
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|
(4) Section 204.82 of the Act is amended
by adding the following after subsection (4):
|
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| Provincially
registered
LSVCCs
|
(5) Where
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(a) an amount (other than interest on an
amount to which this subsection applies or
an amount payable under or as a
consequence of a prescribed provision of a
law of a province) is payable to the
government of a province by a corporation,
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(b) the amount is payable as a consequence
of a failure to acquire sufficient properties
of a character described in the law of the
province,
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(c) the corporation has been prescribed for
the purpose of the definition ``approved
share'' in subsection 127.4(1), and
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(d) the corporation is not a registered
labour-sponsored venture capital
corporation or a revoked corporation,
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the corporation shall pay a tax under this Part
for the taxation year in which the amount
became payable equal to that amount.
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(5) Subsections (1) and (2) apply to
taxation years that end after 1994 and
before March 1997.
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(6) Subsection (3) applies to taxation
years that end after February 1997 except
that, for taxation years that end before
1999, the amount determined under
paragraph (b) of the description of B in
subsection 204.82(2.1) of the Act, as enacted
by subsection (3), is deemed to be nil.
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(7) Subsection (4) applies to liabilities
arising after February 18, 1997.
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54. (1) Section 204.83 of the Act is
replaced by the following:
|
|
| Refunds for
federally
registered
LSVCCs
|
204.83 (1) If a corporation is required,
under subsections 204.82(3) and (4), to pay a
tax and a penalty under this Part for a taxation
year and, throughout any period of 12
consecutive months (in this section referred to
as the ``second period'') that begins after the
12-month period in respect of which the tax
became payable (in this section referred to as
the ``first period''), the corporation has no
monthly deficiency and files with the Minister
the return required under this Part for the
taxation year in which the second period ends,
the Minister shall refund to the corporation an
amount equal to the total of the amount that
was paid under subsection 204.82(3) and 80%
of the amount that was paid under subsection
204.82(4) in respect of the first period.
|
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| Refunds for
other LSVCCs
|
(2) Where
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(a) the government of a province refunds, at
any time, an amount to a corporation,
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(b) the refund is of an amount that had been
paid in satisfaction of a particular amount
payable in a taxation year of the
corporation, and
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(c) tax was payable under subsection
204.82(5) by the corporation for a taxation
year because the particular amount became
payable,
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the corporation is deemed to have paid at that
time an amount equal to the refund on account
of its tax payable under this Part for the year.
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(2) Subsection (1) applies after February
18, 1997.
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|
55. (1) Section 204.85 of the Act is
replaced by the following:
|
|
| Dissolution of
federally
registered
LSVCCs
|
204.85 (1) If a registered labour-sponsored
venture capital corporation or a revoked
corporation has issued any Class A shares, it
shall not be amalgamated or merged with
another corporation, or be liquidated or
dissolved, except with the written permission
of the Minister of Finance and on any terms
and conditions that are specified by that
Minister.
|
|
| Dissolution of
other LSVCCs
|
(2) Where
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(a) an amount (other than interest on an
amount to which this subsection applies or
an amount payable under or as a
consequence of a prescribed provision of a
law of a province) is payable to the
government of a province by a corporation,
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(b) the amount is payable as a consequence
of the amalgamation or merger of the
corporation with another corporation, the
winding-up or dissolution of the
corporation or the corporation ceasing to be
registered under a law of the province,
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(c) the corporation has been prescribed for
the purpose of the definition ``approved
share'' in subsection 127.4(1), and
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(d) the corporation is not a registered
labour-sponsored venture capital
corporation or a revoked corporation,
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the corporation shall pay a tax under this Part
for the taxation year in which the amount
became payable equal to that amount.
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(2) Subsection 204.85(1) of the Act, as
enacted by subsection (1), applies after July
1997.
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(3) Subsection 204.85(2) of the Act, as
enacted by subsection (1), applies after
February 18, 1997.
|
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|
56. (1) Section 204.86 of the Act is
replaced by the following:
|
|
| Return and
payment of
tax for
federally-regis
tered LSVCCs
|
204.86 (1) Every registered
labour-sponsored venture capital corporation
and every revoked corporation shall
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