C-67
First Session, Thirty-eighth Parliament,
53-54 Elizabeth II, 2004-2005
HOUSE OF COMMONS OF CANADA
BILL C-67
An Act respecting the allocation of unanticipated surpluses and to amend the Income Tax Act
first reading, October 7, 2005
THE MINISTER OF FINANCE
90343
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 respecting the allocation of unanticipated surpluses and to amend the Income Tax Act”.
SUMMARY
The enactment authorizes the Minister of Finance to make, in respect of fiscal years 2005-2006 and 2006-2007, certain payments out of the annual surplus that is in excess of the sum of $3 billion and the amount paid in respect of that fiscal year under An Act to authorize the Minister of Finance to make certain payments, being chapter 36 of the Statutes of Canada, 2005. It also authorizes the Minister of Finance to make, in respect of fiscal years 2007-2008 to 2009-2010, certain payments out of the annual surplus that is in excess of $3 billion. The enactment allocates the amounts authorized to be paid as follows: one third to tax relief, one third to spending priorities and the remainder to reduce the accumulated deficit for the fiscal year.
The enactment also provides a mechanism for increases to the basic personal amounts under the Income Tax Act for taxation years 2007 to 2010 in addition to those implemented in the Budget Implementation Act, 2005, so long as the increases are considered to be fiscally sustainable.
Also available on the Parliament of Canada Web Site at the following address:http://www.parl.gc.ca
TABLE OF PROVISIONS
AN ACT RESPECTING THE ALLOCATION OF UNANTICIPATED SURPLUSES AND TO AMEND THE INCOME TAX ACT
Preamble       
SHORT TITLE
1.       Unanticipated Surpluses Act
UNANTICIPATED SURPLUSES
2.       Authorization for payments
3.       Tax relief
4.       Expenditures identified in budget
5.       Reduction of accumulated deficit
6-7.       Amendments to the Income Tax Act
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1st Session, 38th Parliament,
53-54 Elizabeth II, 2004-2005
house of commons of canada
BILL C-67
An Act respecting the allocation of unanticipated surpluses and to amend the Income Tax Act
Preamble
Recognizing
that it is in the public interest to predetermine how annual unanticipated surpluses, if any, are to be applied among competing priorities; and
that such annual unanticipated surpluses are intended to be allocated, in a balanced approach, among the following, namely, spending on identified priorities, the reduction of the accumulated deficit and tax relief consisting of a one-time credit and an increase in the basic personal amounts under the Income Tax Act, so long as the increase is considered to be fiscally sustainable;
Now, therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
SHORT TITLE
Short title
1. This Act may be cited as the Unanticipated Surpluses Act.
UNANTICIPATED SURPLUSES
Authorization for payments
2. (1) In respect of each of fiscal years 2005-2006 and 2006-2007, the Minister of Finance, or a Minister of the Crown whom he or she may designate, may, subject to section 4, apply or pay out of the Consolidated Revenue Fund, in accordance with this Act, an amount equal to the amount by which the annual surplus for that fiscal year exceeds the sum of $3 billion and the total amounts paid in respect of that fiscal year under An Act to authorize the Minister of Finance to make certain payments, being chapter 36 of the Statutes of Canada, 2005.
Authorization for payments
(2) In respect of fiscal years 2007-2008, 2008-2009 and 2009-2010, the Minister of Finance, or a Minister of the Crown whom he or she may designate, may, subject to section 4, pay out of the Consolidated Revenue Fund, or apply, in accordance with this Act, an amount equal to the amount by which the annual surplus for that fiscal year exceeds $3 billion.
Definition of “annual surplus”
(3) In this section, “annual surplus”, for a fiscal year, means the amount that would, but for payments that would be authorized under this Act and An Act to authorize the Minister of Finance to make certain payments, being chapter 36 of the Statutes of Canada, 2005, be the annual surplus as provided in the Public Accounts for that year, prepared in accordance with sections 63 and 64 of the Financial Administration Act.
Tax relief
3. One third of the amount determined under section 2 in respect of a fiscal year is to be applied or paid in accordance with section 122.52 of the Income Tax Act.
Expenditures identified in budget
4. One third of the amount determined under section 2 in respect of a fiscal year may be paid in respect of one or more of the expenditures identified in the budget, or in a statement tabled in the House of Commons by the Minister of Finance, for the fiscal year for the purpose of this Act if the expenditure and the payment is authorized by an Act of Parliament other than this Act.
Reduction of accumulated deficit
5. The remainder of the amount determined under section 2, after the application of sections 3 and 4, is to be applied to reduce the amount that would, but for the application of this section, be the accumulated deficit for that fiscal year as determined in the Public Accounts.
R.S., c. 1 (5th Supp.)
AMENDMENTS TO THE INCOME TAX ACT
2005, c. 30, s. 5
6. (1) Subsections 118(3.1) to (3.3) of the Income Tax Act are replaced by the following:
Additions to personal credits — basic personal amount
(3.1) The amount of $7,131 referred to in paragraphs (a) to (c) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is
(a) for the 2006 taxation year, to be replaced by the amount that is the total of $100 and the amount that would be determined for that description for that taxation year in respect of the particular amount if this section were read without reference to this subsection and section 117.1 were read without reference to subsection 117.1(3);
(b) for the 2007 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (a),
(ii) $100, and
(iii) the basic personal amount surplus adjustment determined for that taxation year;
(c) for the 2008 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (b),
(ii) $400, and
(iii) the basic personal amount surplus adjustment determined for that taxation year;
(d) for the 2009 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (c),
(ii) the greater of $600 and the amount, if any, by which $10,000 exceeds the amount determined under subparagraph (i), and
(iii) the basic personal amount surplus adjustment determined for that taxation year;
(e) for the 2010 taxation year, to be replaced by the amount that is the total of 
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (d), and
(ii) the basic personal amount surplus adjustment determined for that taxation year; and
(f) for each of the 2011 and subsequent taxation years, to be replaced by the amount determined for that description for that taxation year in respect of the particular amount by applying section 117.1 to the amount determined for that description for the immediately preceding taxation year in respect of the particular amount.
Additions to personal credits — spouse or common-law partner or wholly dependent person
(3.2) The amount of $6,055 referred to in subparagraphs (a)(ii) and (b)(iv) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is
(a) for the 2006 taxation year, to be replaced by the amount that is the total of $85 and the amount that would be determined for that description for that taxation year in respect of the particular amount if this section were read without reference to this subsection and section 117.1 were read without reference to subsection 117.1(3);
(b) for the 2007 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (a),
(ii) $85, and
(iii) 85% of the basic personal amount surplus adjustment determined for that taxation year;
(c) for the 2008 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (b),
(ii) $340, and
(iii) 85% of the basic personal amount surplus adjustment determined for that taxation year;
(d) for the 2009 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (c),
(ii) the greater of $510 and the amount, if any, by which $8,500 exceeds the amount determined under subparagraph (i), and
(iii) 85% of the basic personal amount surplus adjustment determined for that taxation year;
(e) for the 2010 taxation year, to be replaced by the amount that is the total of 
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (d), and
(ii) 85% of the basic personal amount surplus adjustment determined for that taxation year; and
(f) for each of the 2011 and subsequent taxation years, to be replaced by the amount determined for that description for that taxation year in respect of the particular amount by applying section 117.1 to the amount determined for that description for the immediately preceding taxation year in respect of the particular amount.
Additions to personal credits — net income threshold
(3.3) The amount of $606 referred to in subparagraphs (a)(ii) and (b)(iv) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is
(a) for the 2006 taxation year, to be replaced by the amount that is the total of $8.50 and the amount that would be determined for that description for that taxation year in respect of the particular amount if this section were read without reference to this subsection and section 117.1 were read without reference to subsection 117.1(3);
(b) for the 2007 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (a),
(ii) $8.50, and
(iii) 8.5% of the basic personal amount surplus adjustment determined for that taxation year;
(c) for the 2008 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (b),
(ii) $34, and
(iii) 8.5% of the basic personal amount surplus adjustment determined for that taxation year;
(d) for the 2009 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (c),
(ii) the greater of $51 and the amount, if any, by which $850 exceeds the amount determined under subparagraph (i), and
(iii) 8.5% of the basic personal amount surplus adjustment determined for that taxation year;
(e) for the 2010 taxation year, to be replaced by the amount that is the total of 
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (d), and
(ii) 8.5% of the basic personal amount surplus adjustment determined for that taxation year; and
(f) for each of the 2011 and subsequent taxation years, to be replaced by the amount determined for that description for that taxation year in respect of the particular amount by applying section 117.1 to the amount determined for that description for the immediately preceding taxation year in respect of the particular amount.
(2) Section 118 of the Act is amended by adding the following after subsection (8):
Definition of “basic personal amount surplus adjustment”
(9) For the purposes of subsections (3.1) to (3.3), “basic personal amount surplus adjustment” for a particular taxation year means the amount, if any, specified by the Minister of Finance for the particular taxation year, not exceeding the amount determined by dividing 85% of the surplus adjustment, as defined in subsection 122.52(1), for the preceding taxation year by the appropriate percentage for the particular taxation year.
Rounding
(10) If an amount determined under any of paragraphs (3.1)(a) to (e), (3.2)(a) to (e) and (3.3)(a) to (e) is not a multiple of one dollar, it shall be rounded to the nearest multiple of one dollar or, where it is equidistant from two such consecutive multiples, to the greater multiple.
(3) Subsections (1) and (2) apply to the 2006 and subsequent taxation years.
7. (1) The Act is amended by adding the following after section 122.51:
Definitions
122.52 (1) The following definitions apply in this section.
“eligible individual”« particulier admissible »
“eligible individual” for a particular taxation year means an individual (other than a trust)
(a) who is resident in Canada throughout the particular taxation year (or, if the individual dies in the year, throughout the portion of the particular taxation year before the individ­ual’s death);
(b) who had tax payable under this Part for the taxation year immediately preceding the particular taxation year; and
(c) who files a return of income under subsection 150(1) for the particular taxation year and the immediately preceding taxation year.
“surplus adjustment”« rajustement pour excédent budgétaire »
“surplus adjustment” for a taxation year means the amount determined by the Minister of Finance, in consultation with the Minister, to be the share allocable to each eligible individual for the taxation year of the amount in respect of the annual surplus for the fiscal year of Canada that ends in the taxation year that, under section 3 of the Unanticipated Surpluses Act, is to be applied or paid in accordance with this section.
Deemed payment on account of tax
(2) If a return of income (other than a return of income filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or subsection 150(4)) is filed in respect of an eligible individual for a particular taxation year that includes the end of a calendar year, there is deemed to be paid at the end of the particular taxation year on account of the individual’s tax payable under this Part for the particular taxation year the lesser of
(a) the surplus adjustment for the particular taxation year, and
(b) the individual’s tax payable under this Part for the taxation year immediately preceding the particular taxation year.
(2) Subsection (1) applies to the 2006 and subsequent taxation years of eligible indi­viduals.
Published under authority of the Speaker of the House of CommonsAvailable from:Publishing and Depository ServicesPublic Works and Government Services Canada