FINA Committee Meeting

MINUTES OF PROCEEDINGS

Meeting No. 20

Tuesday, May 8, 2001

The Standing Committee on Finance met at 9:45 a.m. this day, in Room 536, Wellington Building, the Chair, Maurizio Bevilacqua, presiding.

Members of the Committee present: Sue Barnes, Carolyn Bennett, Maurizio Bevilacqua, Roy Cullen, Ken Epp, Roger Gallaway, Albina Guarnieri, Lorne Nystrom and Gary Pillitteri.

Acting Member present: Paul Macklin for John McCallum.

In attendance: From the Legislative Services: Marc Toupin, Jean-François Pagé and Philippe Méla, Legislative Clerks. From the Library of Parliament: Marc-André Pigeon and Blayne Haggart, Researchers.  From Committees and Associations Directorate:  Mike MacPherson, Committee Clerk.

Witnesses: From the Department of Finance: Lise Potvin, Senior Chief, Employment and Investment; Davine Roach, Chief, Pensions, Resources, Trusts and Insurance; Robert Dubrule, Senior Tax Policy Officer, Tax Policy Division, Pensions, Resources, Trusts and Insurance; Wallace Conway, Chief, Corporate Reorganization & Capital Gains; Catherine Cloutier, Senior Tax Policy Officer, General Legal Services Division.

Pursuant to its Order of Reference of Monday, April 23, 2001, the Committee resumed consideration of Bill C-22, An Act to amend the Income Tax Act, the Income Tax Application Rules, certain Acts related to the Income Tax Act, the Canada Pension Plan, the Customs Act, the Excise Tax Act, the Modernization of Benefits and Obligations Act and another Act related to the Excise Tax Act (See Minutes of Proceedings, Wednesday, May 2, 2001, Meeting No. 18).

The Committee proceeded to Clause-by-Clause consideration of the Bill.

Clause 1 stood.

Clause 2 to 5 carried, severally, on division.

The Chair called Clause 6.

Roy Cullen moved, -- That Bill C-22, in Clause 6, be amended in the English version by

(a) replacing line 41 on page 17 with the following:

year that includes February 28, 2000

(b) replacing lines 17 to 19 on page 18 with the following:

that includes February 28, 2000 or October 17, 2000, or began after February 28, 2000 and ended before October 17, 2000,

(c) replacing lines 5 and 6 on page 19 with the following:

taxpayer's taxation year that includes February 28, 2000 or October 17, 2000,

(d) replacing lines 21 and 22 on page 19 with the following:

that includes February 28, 2000 or October 17, 2000, or began after February

After debate, the question being put on the amendment, it was adopted to, on division.

Clause 6, carried, as amended, on division.

Clause 7 carried, on division.

The Chair called Clause 8.

Roy Cullen moved, -- That Bill C-22, in Clause 8, be amended by replacing lines 13 to 24 on page 29 with the following:

subsection referred to as the "initial lender")

(a) the loan made by the intermediate lender to the intended borrower is deemed to have been made by the initial lender to the intended borrower (to the extent of the lesser of the amount of the loan made by the initial lender to the intermediate lender and the amount of the loan made by the intermediate lender to the intended borrower) under the same terms and conditions and at the same time as it was made by the intermediate lender; and

(b) the loan made by the initial lender to the intermediate lender and the loan made by the intermediate lender to the intended borrower are deemed not to have been made to the extent of the amount of the loan deemed to have been made under paragraph (a).

After debate, the question being put on the amendment, it was adopted to, on division.

Clause 8, carried, as amended, on division.

Clauses 9 to 13 carried, severally, on division.

The Chair called Clause 14.

Roy Cullen moved, -- That Bill C-22, in Clause 14, be amended by

(a) replacing lines 3 and 4 on page 49 with the following:

"exchange date" in respect of a debt of a taxpayer that is at any time a weak currency debt means, if the debt is in-

(b) replacing lines 18 and 19 on page 49 with the following:

"hedge" in respect of a debt of a taxpayer that is at any time a weak currency debt means any agreement

(c) replacing line 34 on page 49 with the following:

"weak currency debt" of a taxpayer at a particular time means a

(d) replacing lines 38 to 41 on page 49 with the following:

at a time (in this section referred to as the "commitment time") after February 27, 2000, in respect of a borrowing of money or an acquisition of property, where

(a) any of the following applies, namely,

(e) replacing line 28 on page 50 with the following:

indirectly, to settle another debt of the taxpayer that is at any time a weak cur-

(f) replacing lines 34 to 36 on page 50 with the following:

(b) the amount of the particular debt (together with any other debt that would, but for this paragraph, be at any time a weak

(g) replacing lines 43 to 48 on page 50 and lines 1 to 6 on page 51 with the following:

(c) either of the following applies, namely,

(i) if the rate at which interest is payable at the particular time in the weak currency in respect of the particular debt is determined under a formula based on the value from time to time of a reference rate (other than a reference rate the value of which is established or materially influenced by the taxpayer), the interest rate at the commitment time, as determined under the formula as though interest were then payable, exceeds by more than two percentage points the rate at which interest would have been payable at the commitment time in the final currency if

(A) the taxpayer had, at the commitment time, instead incurred or assumed an equivalent amount of debt in the final currency on the same terms as the particular debt (excluding the rate of interest but including the structure of the interest calculation, such as whether the rate is fixed or floating) with those modifications that the difference in currency requires, and

(B) interest on the equivalent amount of debt referred to in clause (A) was payable at the commitment time, or

(ii) in any other case, the rate at which interest is payable at the particular time in the weak currency in respect of the particular debt exceeds by more than two percentage points the rate at which interest would have been payable at the particular time in the final currency if at the commitment time the taxpayer had instead incurred or assumed an equivalent amount of debt in the final currency on the same terms as the particular debt (excluding the rate of interest but including the structure of the interest calculation, such as whether the rate is fixed or floating), with those modifications that the difference in currency requires.

(h) replacing line 9 on page 51 with the following:

of a particular debt of a taxpayer (other

(i) replacing line 13 on page 51 with the following:

248(1)) that is at any time a weak currency debt:

(j) replacing lines 15 to 27 on page 51 with the following:

accrues on the debt for any period that begins after the day that is the later of June 30, 2000 and the exchange date during which it is a weak currency debt shall exceed the amount of interest that would, if at the commitment time the taxpayer had instead incurred or assumed an equivalent amount of debt, the principal and interest in respect of which were denominated in the final currency, on the same terms as the particular debt (excluding the rate of interest but including the structure of the interest calculation, such as whether the rate is fixed or floating) have accrued on the equivalent debt during that period, with those modifications that the difference in currency requires;

(k) replacing line 8 on page 52 with the following:

hedge in respect of a debt of the taxpayer that is at any time a weak currency debt, the

(l) replacing line 19 on page 52 with the following:

in respect of a debt of the taxpayer that is at any time a weak currency debt is reduced

(m) replacing lines 28 and 29 on page 52 with the following:

have been a separate debt from the commitment time.

After debate, the question being put on the amendment, it was agreed to, on division.

Clause 14, carried, as amended, on division.

Clauses 15 to 21 carried, severally, on division.

The Chair called Clause 22.

Roy Cullen moved, -- That Bill C-22, in Clause 22, be amended in the English version by

(a) replacing line 4 on page 70 with the following:

includes February 28, 2000 or

(b) replacing line 29 on page 70 with the following:

cludes February 28, 2000 or Octo-

 The question being put on the amendment, it was agreed to, on division.

Roy Cullen moved, -- That Bill C-22, in Clause 22, be amended by replacing line 11 on page 70 with the following:

the taxpayer for the year;

(a.1) for a taxation year that began after February 28, 2000 and ended before October 17, 2000, the reference to the fraction "1/4" in paragraph 38(a.1) of the Act, as enacted by subsection (2), shall be read as a reference to the fraction "1/3"; and

 After debate, the question being put on the amendment, it was agreed to, on division.

Clause 22, carried, as amended, on division.

The Chair called Clause 23.

Roy Cullen moved, -- That Bill C-22, in Clause 23, be amended in the English version by

(a) replacing line 25 on page 71 with the following:

taxation years that includes

(b) replacing line 19 on page 72 with the following:

years that includes February 28,

The question being put on the amendment, it was agreed to, on division.

Clause 23, carried, as amended.

The Chair called Clause 24.

Roy Cullen moved, -- That Bill C-22, in Clause 24, be amended by replacing line 41 on page 73 with the following:

under subparagraph 104(21.4)(a)(ii) or (21.7)(b)(ii) for a

After debate, by unanimous consent, the amendment was withdrawn.

By unanimous consent, Clause24 was stood.

Clause 25 carried.

The Chair called Clause 26.

Roy Cullen moved, -- That Bill C-22, in Clause 26, be amended by replacing, in the English version, lines 39 and 40 on page 80 with the following:

February 28, 2000 or October 17, 2000, or began after February 28, 2000 and

 The question being put on the amendment, it was agreed to, on division.

Clause 26, carried, as amended.

Clauses 27 to 35 carried, severally.

The Chair called Clause 36.

Roy Cullen moved, -- That Bill C-22, in Clause 36, be amended in the English version by

(a) replacing lines 1 and 2 on page 102 with the following:

of the entity that includes February 28, 2000 or October 17, 2000, or began after

(b) replacing lines 27 to 29 on page 102 with the following:

February 28, 2000 or October 17, 2000, or began after February 28, 2000 and ended before October 17, 2000, ends in the

The question being put on the amendment, it was agreed to, on division.

Clause 36, carried, as amended.

Clauses 37 to 57 carried, severally.

The Chair called Clause 58.

Roy Cullen moved, -- That Bill C-22, in Clause 58, be amended by replacing, in the English version, lines 16 and 17 on page 161 with the following:

debtor that includes February 28, 2000 or October 17, 2000, or began after

The question being put on the amendment, it was agreed to, on division.

Clause 58, carried, as amended.

The Chair called Clause 59.

Roy Cullen moved, -- That Bill C-22, in Clause 59, be amended by replacing, in the English version, line 47 on page 161 and line 1 on page 162 with the following:

that includes February 28, 2000 or October 17, 2000, or began after February

The question being put on the amendment, it was agreed to, on division.

Clause 59, carried, as amended.

Clause 60 carried.

The Chair called Clause 61.

Roy Culllen moved, -- That Bill C-22, in Clause 61, be amended by replacing, in the English version, lines 17 and 18 on page 164 with the following:

er that includes February 28, 2000 or October 17, 2000, or began after February

The question being put on the amendment, it was agreed to, on division.

Clause 61, carried, as amended.

Clauses 62 to 69 carried, severally.

The Chair called Clause 70.

Roy Cullen moved, -- That Bill C-22, in Clause 70, be amended in the English version by

(a) replacing lines 21 and 22 on page 195 with the following:

taxpayer that includes February 28, 2000 or October 17, 2000, or began after

(b) replacing lines 37 and 38 on page 195 with the following:

taxpayer that includes February 28, 2000 or October 17, 2000, or began after

The question being put on the amendment, it was agreed to, on division.

Clause 70, carried, as amended.

The Chair called Clause 71.

Roy Cullen moved, -- That Bill C-22, in Clause 71, be amended by replacing line 8 on page 196 with the following:

128.1(1)(d), (and any regulations made for the

After debate, the question being put on the amendment, it was agreed to.

Clause 71, carried, as amended.

Clause 72 carried.

The Chair called Clause 73.

Roy Cullen moved, -- That Bill C-22, in Clause 73, be amended by replacing line 27 on page 200 with the following:

F is the amount claimed by the taxpayer, which amount may not be greater than the amount prescribed to be the

After debate, the question being put on the amendment, it was agreed to.

Roy Cullen moved, -- That Bill C-22, in Clause 73, be amended by replacing, in the English version, lines 13 and 14 on page 205 with the following:

February 28, 2000 or October 17, 2000, or began after February 28, 2000 and

The question being put on the amendment, it was agreed to, on division.

Clause 73, carried, as amended.

The Chair called Clause 74.

Roy Cullen moved, -- That Bill C-22, in Clause 74, be amended by

(a) replacing lines 33 and 34 on page 207 with the following:

(3) The descriptions of A and B in subsection 96(1.7) of the Act are replaced by the follow-

(b) adding after line 45 on page 207 the following:

B is the relevant fraction that applies under paragraph 38(a), (a.1), (a.2), (b) or (c) for the particular year in respect of the taxpayer; and

After debate, the question being put on the amendment, it was agreed to.

Roy Cullen moved, -- That Bill C-22, in Clause 74, be amended by replacing, in the English version, line 7 on page 208 with the following:

February 28, 2000, or includes February

The question being put on the amendment, it was agreed to, on division.

Clause 74, carried, as amended.

Clause 75 carried.

The Chair called Clause 76.

Roy Cullen moved, -- That Bill C-22, in Clause 76, be amended by replacing, in the English version, lines 25 and 26 on page 210 with the following:

taxpayer includes February 28, 2000 or October 17, 2000, or began after Febru-

The question being put on the amendment, it was agreed to, on division.

Clause 76, carried, as amended.

The Chair called Clause 77.

Roy Cullen moved, -- That Bill C-22, in Clause 77, be amended by replacing, in the English version, lines 44 and 45 on page 210 with the following:

taxpayer's taxation year that includes February 28, 2000 or October 17, 2000,

The question being put on the amendment, it was agreed to, on division.

Clause 77, carried, as amended.

The Chair called Clause 78.

Roy Cullen moved, -- That Bill C-22, in Clause 78, be amended by

(a) replacing line 20 on page 215 with the following:

(iii) where applicable, the day determined

(b) replacing lines 1 to 26 on page 226 with the following:

Deemed gains - subsection (21.4) applies

(21.6) Where a taxpayer is deemed by subsection (21.4) to have realized capital gains from the disposition of capital property in a taxation year of the taxpayer in respect of dispositions of property by a trust of which the taxpayer is a beneficiary,

(a) if the deemed gains are in respect of capital gains of the trust from dispositions of property before February 28, 2000 and the taxation year of the taxpayer includes February 27, 2000, the deemed gains are deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of capital property in the taxpayer's taxation year and before February 28, 2000;

(b) if the deemed gains are in respect of capital gains of the trust from dispositions of property before February 28, 2000 and the taxation year of the taxpayer began after February 27, 2000 and ended before October 18, 2000, 9/8 of the deemed gains is deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of capital property in the taxpayer's taxation year;

(c) if the deemed gains are in respect of capital gains of the trust from dispositions of property before February 28, 2000 and the taxation year of the taxpayer began after February 27, 2000 and ended after October 17, 2000, 9/8 of the deemed gains is deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of capital property in the taxpayer's taxation year and before October 18, 2000;

(d) if the deemed gains are in respect of capital gains of the trust from dispositions of property before February 28, 2000 and the taxation year of the taxpayer began after October 17, 2000, 3/2 of the deemed gains is deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of capital property in the taxpayer's taxation year;

(e) if the deemed gains are in respect of capital gains of the trust from dispositions of property after February 27, 2000 and before October 18, 2000, and the taxation year of the taxpayer began after October 17, 2000, 4/3 of the deemed gains is deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of capital property in the taxpayer's taxation year;

(f) if the deemed gains are in respect of capital gains of the trust from dispositions of property after February 27, 2000 and before October 18, 2000 and the taxation year of the taxpayer includes February 28, 2000 and October 17, 2000, the deemed gains are deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of capital property in the taxpayer's taxation year and in the period that began after February 27, 2000 and ended before October 18, 2000;

(g) if the deemed gains are in respect of capital gains of the trust from dispositions of property after February 27, 2000 and before October 17, 2000 and the taxation year of the taxpayer began after February 27, 2000 and ended before October 17, 2000, the deemed gains are deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of capital property in the taxpayer's taxation year; and

(h) in any other case, the deemed gains are deemed to be a capital gain of the taxpayer from the disposition of capital property by the taxpayer in the taxpayer's taxation year and after October 17, 2000.

Deemed gains - subsection (21.4) does not apply

(21.7) Where an amount is designated under subsection (21) in respect of a beneficiary by a trust for a particular taxation year of the trust that ends in a taxation year of the beneficiary that includes February 28, 2000 or October 17, 2000 and subsection (21.4) does not apply in respect of the designated amount,

(a) notwithstanding subsection (21) and except as a consequence of the application of paragraph (b), the designated amount shall not be included in computing the beneficiary's income;

(b) the beneficiary is deemed to have a capital gain from the disposition by the beneficiary of capital property on the day on which the particular taxation year ends equal to the amount, if any, by which

(i) the amount determined by dividing the designated amount by the fraction in paragraph 38(a) that applies to the trust for the particular taxation year

exceeds

(ii) the amount claimed by the beneficiary, which amount may not be greater than the beneficiary's exempt capital gains balance for the year in respect of the trust; and

(c) no amount may be claimed under subsection 39.1(3) by the beneficiary in respect of the designated amount.

Roy Cullen moved, -- That Bill C-22, in Clause 78, be amended in the English version by

(a) replacing line 4 on page 223 with the following:

includes February 28, 2000 or October

(b) replacing line 41 on page 224 with the following:

includes February 28, 2000 or October

The question being put on the amendment, it was agreed to, on division.

Clause 78, carried, as amended.

Clause 79 carried.

The Chair called Clause 80.

Roy Cullen moved, -- That Bill C-22, in Clause 80, be amended by

(a) replacing, in the English version, line 21 on page 236 with the following:

has elected under subsection (2.11) in

(b) adding after line 13 on page 237 the following:

 (2.12) An election made under subsection (2.11) by a mutual fund trust is deemed, for the trust's 2003 and subsequent taxation years, not to have been made if

(a) the election is made after December 20, 2000 and applies to any taxation year that ends before 2003; and

(b) the proceeds of disposition of a beneficiary's interest in the trust have been determined under paragraph (2.1)(e).

(c) replacing lines 8 to 12 on page 241 with the following:

tributions made after 1999, except that

(a) it does not apply to distributions made before March 2000 in satisfaction of rights described in subsection 52(6) of the Act that were acquired before 2000; and

(b) for distributions made from a trust before the particular day on which this Act receives royal assent, an election under that subsection 107(2.1) is deemed to have been made in a timely manner if it is made on or before the trust's filing-due date for the taxation year that includes the particular day.

After debate, the question being put on the amendment, it was agreed to.

Roy Cullen moved, -- That Bill C-22, in Clause 80, be amended by replacing, in the English version, lines 25 and 26 on page 240 with the following:

tion year that includes February 28, 2000 or October 17, 2000, or began after

The question being put on the amendment, it was agreed to, on division.

Clause 80, carried, as amended.

Clauses 81 to 85 carried , severally.

The Chair called Clause 86.

Roy Cullen moved, -- That Bill C-22, in Clause 86, be amended in the English version by

(a) replacing line 40 on page 275 with the following:

fore and included February 28,

(b) replacing line 2 on page 276 with the following:

includes February 28, 2000 or

(c) replacing lines 9 and 10 on page 278 with the following:

taxation year that includes February 28, 2000 or October 17, 2000, or began after

The question being put on the amendment, it was agreed to, on division.

Clause 86, carried, as amended.

The Chair called Clause 87.

Roy Cullen moved, -- That Bill C-22, in Clause 87, be amended by replacing, in the English version, line 7 on page 280 with the following:

cludes February 28, 2000 or

The question being put on the amendment, it was agreed to, on division.

Clause 87, carried, as amended.

Clauses 88 to 93 carried, severally.

The Chair called Clause 94.

Roy Cullen moved, -- That Bill C-22, in Clause 94, be amended by

(a) replacing lines 12 and 13 on page 294 with the following:

(a) the policy is a life insurance policy under which, immediately before

(b) replacing lines 5 to 8 on page 295 with the following:

 (5.2) Where this subsection applies,

After debate, the question being put on the amendment, it was agreed to.

Clause 94, carried, as amended.

Clauses 95 to 117 carried, severally.

The Chair called Clause 118.

Roy Cullen moved, -- That Bill C-22, in Clause 118, be amended by replacing line 18 on page 340 with the following:

in the period in the calendar year that is before that time

After debate, the question being put on the amendment, it was agreed to.

Clause 118, carried, as amended.

Clause 119 to 126 carried, severally.

The Chair called Clause 127.

Roy Cullen moved, -- That Bill C-22, in Clause 127, be amended by

(a) adding the following after line 22 on page 362:

(iii.1) where the dividend was in respect of capital gains of the corporation from dispositions of property that occurred before February 28, 2000 and the taxation year of the taxpayer begins after February 27, 2000 and ends after October 17, 2000, 9/8 of the dividend is deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of capital property in the year and before October 18, 2000,

(b) replacing line 42 on page 362 with the following:

the year and in the period that began after February 27, 2000 and ended before October 18, 2000,

(c) replacing line 13 on page 363 with the following:

 (4.2) Where paragraph (4)(b)

The question being put on the amendment, it was agreed to.

Roy Cullen moved, -- That Bill C-22, in Clause 127, be amended in the English version by

(a) replacing lines 18 and 19 on page 363 with the following:

corporation's taxation year that includes February 28, 2000 or October 17, 2000

(b) replacing line 38 on page 363 with the following:

February 28, 2000 or October 17, 2000

(c) replacing lines 5 and 6 on page 365 with the following:

corporation's taxation year that includes February 28, 2000 or October 17, 2000

(d) replacing line 5 on page 366 with the following:

includes February 28, 2000 or October

(e) replacing lines 14 and 15 on page 367 with the following:

year that includes February 28, 2000 or October 17, 2000, or began after Febru-

The question being put on the amendment, it was agreed to, on division.

Clause 127, carried, as amended.

The Chair called Clause 128.

Roy Cullen moved, -- That Bill C-22, in Clause 128, be amended by

(a) adding the following after line 29 on page 368:

(iii.1) where the dividend was in respect of capital gains of the corporation from dispositions of property that occurred before February 28, 2000 and the taxation year of the taxpayer begins after February 27, 2000 and ends after October 17, 2000, 9/8 of the dividend is deemed to be a capital gain of the taxpayer from the disposition by the taxpayer of capital property in the year and before October 18, 2000,

(b) replacing lines 49 and 50 on page 368 with the following:

property in the year and in the period that began after February 27, 2000 and ended before October 18, 2000,

(c) replacing, in the English version, line 18 on page 369 with the following:

(viii) dividends paid by a corporation are

(d) replacing lines 22 to 24 on page 369 with the following:

were realized by the corporation,

(viii.1) capital gains redemptions are deemed to be made in respect of net capital gains in the order in which those net capital gains were realized by the corporation to the extent that they are not reduced by dividends, and

(ix) for the purposes of applying subparagraphs (viii) and (viii.1)

(e) replacing line 3 on page 370 with the following:

 
(1.5) Where paragraph (1)(b)

(f) replacing line 33 on page 376 with the following:

"100/18.7" in clause (b)(iii)(B) and the fraction "100/14" in clause (b)(iii)(C) of the

After debate, the question being put on the amendment, it was agreed to.

Roy Cullen moved, -- That Bill C-22, in Clause 128, be amended in the English version by

(a) replacing line 23 on page 370 with the following:

tion year that includes February 28,

(b) replacing line 41 on page 371 with the following:

tion year that includes February 28,

(c) replacing line 35 on page 372 with the following:

February 28, 2000 or October 17, 2000

(d) replacing line 11 on page 373 with the following:

gains for its taxation year that includes

(e) replacing lines 20 and 21 on page 376 with the following:

fund corporation that includes February 28, 2000 or October 17, 2000, or began

The question being put on the amendment, it was agreed to, on division.

Clause 128, carried, as amended.

The Chair called Clause 129.

Roy Cullen moved, -- That Bill C-22, in Clause 129, be amended by

replacing lines 42 and 43 on page 377 with the following:

redemption,

After debate, the question being put on the amendment, it was agreed to.

Roy Cullen moved, -- That Bill C-22, in Clause 129, be amended by replacing, in the English version, lines 30 and 31 on page 379 with the following:

a mutual fund trust that includes February 28, 2000 or October 17, 2000, or

The question being put on the amendment, it was agreed to, on division.

Roy Cullen moved, -- That Bill C-22, in Clause 129, be amended by:

replacing lines 21 to 34 on page 380 with the following:

years that end after February 27, 2000.

The question being put on the amendment, it was agreed to.

Clause 129, carried, as amended.

Clause 130 carried.

The Chair called Clause 131.

Roy Cullen moved, -- That Bill C-22, in Clause 131, be amended by replacing, in the English version, lines 13 and 14 on page 384 with the following:

corporation that includes February 28, 2000 or October 17, 2000, or began after

The question being put on the amendment, it was agreed to, on division.

Clause 131, carried, as amended.

Clause 132 carried.

Clause 133 carried.

The Chair called Clause 134.

Roy Cullen moved, -- That Bill C-22, in Clause 134, be amended by replacing, in the English version, line 34 on page 389 with the following:

includes February 28, 2000 or October

The question being put on the amendment, it was agreed to.

Roy Cullen moved, -- That Bill C-22, in Clause 134, be amended by replacing lines 21 to 50 on page 390 with the following:

Deemed gains and losses - taxpayer

(3.2) Where a capital gain or a capital loss is deemed by subsection (3) to be a capital gain or a capital loss of a taxpayer and not that of a related segregated fund trust,

(a) if the capital gain or capital loss was in respect of capital gains or capital losses from dispositions of property by the related segregated fund trust that occurred before February 28, 2000 and that taxation year of the taxpayer includes February 27, 2000, the capital gain or the capital loss is deemed to be a capital gain or a capital loss, as the case may be, of the taxpayer from the disposition by the taxpayer of capital property in the taxpayer's taxation year and before February 28, 2000;

(b) if the capital gain or capital loss was in respect of capital gains or capital losses from dispositions of property by the related segregated fund trust that occurred before February 28, 2000 and the taxation year of the taxpayer began after February 27, 2000 and ended before October 18, 2000, 9/8 of the capital gain or the capital loss is deemed to be a capital gain or a capital loss, as the case may be, of the taxpayer from the disposition by the taxpayer of capital property in the taxpayer's taxation year;

(c) if the capital gain or capital loss was in respect of capital gains or capital losses from dispositions of property by the related segregated fund trust that occurred before February 28, 2000 and the taxation year of the taxpayer began after February 27, 2000 and ended after October 17, 2000, 9/8 of the capital gain or the capital loss is deemed to be a capital gain or a capital loss, as the case may be, of the taxpayer from the disposition by the taxpayer of capital property in the taxpayer's taxation year and before October 18, 2000;

(d) if the capital gain or capital loss was in respect of capital gains or capital losses from dispositions of property by the related segregated fund trust that occurred before February 28, 2000 and the taxation year of the taxpayer began after October 17, 2000, 3/2 of the capital gain or the capital loss is deemed to be a capital gain or a capital loss, as the case may be, of the taxpayer from the disposition by the taxpayer of capital property in the taxpayer's taxation year;

(e) if the capital gain or capital loss was in respect of capital gains or capital losses from dispositions of property by the related segregated fund that occurred after February 27, 2000 and before October 18, 2000 and the taxation year of the taxpayer began after October 17, 2000, 4/3 of the capital gain or capital loss is deemed to be a capital gain or a capital loss, as the case may be, of the taxpayer from the disposition by the taxpayer of capital property in the taxpayer's taxation year;

(f) if the capital gain or capital loss was in respect of capital gains or capital losses from dispositions of property by the related segregated fund trust that occurred after February 27, 2000 and before October 18, 2000 and the taxation year of the taxpayer includes February 28, 2000 and October 17, 2000, the capital gain or the capital loss is deemed to be a capital gain or a capital loss, as the case may be, of the taxpayer from the disposition by the taxpayer of capital property in the taxpayer's taxation year and in the period that began after February 27, 2000 and ended before October 18, 2000;

(g) if the capital gain or capital loss was in respect of capital gains or capital losses from dispositions of property by the related segregated fund trust that occurred after February 27, 2000 and before October 17, 2000 and the taxation year of the taxpayer began after February 27, 2000 and ended before October 17, 2000, the capital gain or the capital loss is deemed to be a capital gain or a capital loss, as the case may be, of the taxpayer from the disposition by the taxpayer of capital property in the taxpayer's taxation year; and

(h) in any other case, the capital gain or the capital loss is deemed to be a capital gain or a capital loss, as the case may be, of the taxpayer from the disposition of capital property by the taxpayer in the taxpayer's taxation year and after October 17, 2000.

The question being put on the amendment, it was agreed to, on division.

Clause 134, carried, as amended.

Clauses 135 to 185 carried, severally.

The Chair called Clause 186.

Roy Cullen moved, -- That Bill C-22, in Clause 186, be amended by replacing, in the English version, line 23 on page 453 with the following:

(o) provide taxpayer information to any

After debate, the question being put on the amendment, it was agreed to.

Clause 186, carried, as amended.

The Chair called Clause 187.

Roy Cullen moved, -- That Bill C-22, in Clause 187, be amended by replacing, in the English version, lines 24 and 25 on page 457 with the following:

er that includes February 28, 2000 or October 17, 2000, or began after February

The question being put on the amendment, it was agreed to, on division.

Clause 187, carried, as amended.

Clauses 188 to 193 carried, severally.

The Chair called Clause 194.

Roy Cullen moved, -- That Bill C-22, in Clause 194, be amended by replacing lines 15 and 16 on page 476 with the following:

(2) Subsection (1) applies to taxation years that begin after November 1999.

After debate, the question being put on the amendment, it was agreed to.

Clause 194, carried, as amended.

Clauses 195 to 230 carried, severally.

The Chair called Clause 231.

Roy Cullen moved, -- That Bill C-22, in Clause 231, be amended by replacing, in the English version, line 46 on page 494 and lines 1 and 2 on page 495 with the following:

the estate or trust, the two corporations are deemed, for the purposes of this Act, not to be associated with each other in the year.

After debate, the question being put on the amendment, it was agreed to.

Clause 231, carried, as amended.

Clause 232 to 258 carried, severally.

The Chair called Clause 259.

Roy Cullen moved, -- That Bill C-22, in Clause 259, be amended by replacing, in the English version, lines 22 and 23 on page 509 with the following:

official (in this subsection having the same meaning as in section 295) doing anything

After debate, the question being put on the amendment, it was agreed to.

Clause 259, carried, as amended.

Clauses 260 to 264 carried, severally.

The Chair called stood Clause 24.

Roy Cullen moved, -That Bill C-22, in Clause 24, be amended by replacing line 41 on pag 73 with the following:

Under subparagraph 104(21.4) (a) (ii) or (21.7) (b) (ii) for a

After debate, the question being put on the amendment, it was agreed to.

Roy Cullen moved, -That Bill C-22, in Clause 24, be amended in the English version by

(a) replacing line 1 on page 75 with the following:

fiscal period that includes Febru-

(b) replacing line 9 on page 75 with the following:

its fiscal period that included

(c) replacing line 18 on page 75 with the following:

its fiscal period that included

(d) replacing line 27 and 28 on page 77 with the following:

year includes February 28, 2000 or October 17, 2000, or began after February

The question being put on the amendment, it was agreed to.

Clause 24 carried, as amended.

Clause 1 carried.

The titled carried.

It was agreed, -- That Bill C-22, An Act to amend the Income Tax Act, the Income Tax Application Rules, certain Acts related to the Income Tax Act, the Canada Pension Plan, the Customs Act, the Excise Tax Act, the Modernization of Benefits and Obligations Act and another Act related to the Excise Tax Act, as amended, be reprinted for the use of the House of Commons at Report Stage.

ORDERED, -- That the Chair report Bill C-22 with amendments to the House as the Sixth Report of the Committee.

At 10:07 a.m., the Committee adjourned to the call of the Chair.

Pat Steenberg

Clerk of the Committee