I-3, r. 1 - Regulation respecting the Taxation Act

Section 818r53 Disposition versions

2023-09-26

818R53. In Chapters IX to XIV and XX,

“attributed surplus” of an insurer not resident in Canada for a taxation year means the aggregate of the insurer’s property and casualty insurance surplus for the year and

(a)  where the insurer elects for the year in prescribed form, 50% of the aggregate of all amounts each of which would have been determined at the end of the taxation year or at the end of the preceding taxation year in respect of the insurer under section 818R56, if throughout the year or preceding taxation year, as the case may be, the insurer had been a life insurer resident in Canada and had not carried on any insurance business other than a life insurance business or an accident and sickness insurance business; or

(b)  where paragraph a does not apply, 120% of the aggregate of all amounts each of which is 50% of the amount determined in accordance with regulations and guidelines made under Part XIII of the Insurance Companies Act (S.C. 1991, c. 47) to be the margin of assets in Canada over liabilities in Canada required to be maintained by the insurer at the end of the year or at the end of the preceding taxation year in respect of an insurance business carried on in Canada, other than a property and casualty insurance business;

“Canadian business property” of an insurer for a taxation year in respect of an insurance business means

(a)  if the insurer was resident in Canada throughout the year and did not carry on an insurance business outside Canada in the year, property used or held by it in the year in the course of carrying on the business in Canada; and

(b)  in any other case, designated insurance property of the insurer for the year in respect of the business;

“Canadian equity property” of a person or partnership, in this definition referred to as the “taxpayer”, at any time means property of the taxpayer that is

(a)  a share of the capital stock of a corporation resident in Canada, other than a corporation affiliated with the taxpayer, or an income bond, income debenture, small business development bond or small business bond issued by a person resident in Canada, other than a corporation affiliated with the taxpayer, or a Canadian partnership; or

(b)  that proportion of the shares of the capital stock of an entity that is a corporation affiliated with the taxpayer or an interest in an entity that is a partnership or trust that the total value for the taxation year or fiscal period of the entity that includes that time of Canadian equity property is of the total value for the taxation year or fiscal period of all property of the entity;

“Canadian investment fund” of an insurer at the end of a taxation year means the amount determined under Division II;

“Canadian investment property” of an insurer for a taxation year means an investment property of the insurer for the year, other than, if the insurer is not resident in Canada, property established by the insurer as not being effectively connected with its insurance business carried on in Canada in the year, that is, at any time in the year,

(a)  immovable property situated in Canada;

(b)  depreciable property situated in Canada or leased to a person resident in Canada for use inside or outside of Canada;

(c)  an obligation secured by a hypothec or mortgage, an agreement of sale or any other form of indebtedness in respect of property described in paragraph a or b;

(d)  a Canadian equity property;

(e)  a Canadian resource property;

(f)  a deposit balance of the insurer that is in Canadian currency;

(g)  a bond, debenture or other form of indebtedness, in Canadian currency, issued by

i.  a person resident in Canada or a Canadian partnership, or

ii.  the Government of Canada or of a province, or any other political subdivision of Canada;

(h)  a property that is a share of the capital stock of a corporation resident in Canada that is affiliated with the insurer or an interest in a Canadian partnership or a trust resident in Canada, if at least 75% of the value for the year of all property of the corporation, partnership or trust, as the case may be, is attributable to property that would be Canadian investment property if it were owned by an insurer; or

(i)  an amount due or an amount accrued to the insurer on account of income that

i.  is from designated insurance property for the year that is Canadian investment property of the insurer for the year because of any of paragraphs a to h, and

ii.  is supporting the insurer’s Canadian insurance contract liabilities for the year;

“Canadian reserve liabilities” of an insurer at the end of a taxation year means the amount determined under section 818R53.2;

“carrying value” of a taxpayer’s property for a taxation year, except as otherwise provided, means

(a)  if the taxpayer is an insurer, the amounts reflected in the taxpayer’s non-consolidated balance sheet at the end of the year that is accepted or, if that non-consolidated balance sheet had been prepared at the end of the year, that would have been accepted by

i.  the Superintendent of Financial Institutions of Canada, where the insurer is required under the Insurance Companies Act to report to the Superintendent, or

ii.  the Autorité des marchés financiers, the Superintendent of Insurance or other similar officer or authority of a province under the laws of which the insurer is incorporated and required by law to report to that officer or authority; and

(b)  in any other case, the amounts that would have been reflected in the taxpayer’s non-consolidated balance sheet at the end of the year if that non-consolidated balance sheet had been prepared in accordance with generally accepted accounting principles;

“contractual service margin” for a group of insurance contracts of an insurer, or a group of reinsurance contracts held by an insurer, at the end of a taxation year has the meaning assigned by subparagraph z of the first paragraph of section 835 of the Act;

“deposit balance” of an insurer means an amount standing to the insurer’s credit as or on account of amounts deposited with a corporation authorized to accept deposits or to carry on the business of offering to the public its services as a trustee;

“equity limit” of an insurer for a taxation year means the amount determined under Division III;

“equity property” of a person or partnership, in this definition referred to as the “taxpayer”, at any time means property of the taxpayer that is

(a)  a share of the capital stock of a corporation, other than a corporation affiliated with the taxpayer, or an income bond, income debenture, small business development bond or small business bond issued by a person, other than a corporation affiliated with the taxpayer, or partnership; or

(b)  that proportion of the shares of the capital stock of an entity that is a corporation affiliated with the taxpayer or an interest in an entity that is a partnership or trust that the total value, for the taxation year or fiscal period of the entity that includes that time, of equity property of the entity is of the total value for the year or fiscal period of all property of the entity;

“financial institution” means a corporation that is

(a)  a corporation described in any of paragraphs a to e of the definition of “restricted financial institution” in section 1 of the Act; or

(b)  a particular corporation all or substantially all of the value of the assets of which is attributable to shares or indebtedness of one or more corporations referred to in paragraph a to which the particular corporation is affiliated;

“gross Canadian life investment income” of a life insurer for a taxation year means the amount determined under Division IV;

“group of insurance contracts” of an insurer has the meaning assigned by subparagraph u of the first paragraph of section 835 of the Act;

“group of reinsurance contracts” held by an insurer has the meaning assigned by subparagraph x of the first paragraph of section 835 of the Act;

“group of segregated fund policies” of an insurer has the meaning assigned by subparagraph y of the first paragraph of section 835 of the Act;

“investment property” of an insurer for a taxation year means property described in section 818R64;

“liability for incurred claims” for a group of insurance contracts of an insurer at the end of a taxation year has the meaning assigned by subparagraph z.4 of the first paragraph of section 835 of the Act;

“liability for remaining coverage” for a group of insurance contracts of an insurer at the end of a taxation year has the meaning assigned by subparagraph z.3 of the first paragraph of section 835 of the Act;

“mean Canadian investment fund” of an insurer for a taxation year means the amount determined under Division VII;

“mean Canadian reserve liabilities” of an insurer for a taxation year means 50% of the aggregate of its Canadian reserve liabilities at the end of the year and its Canadian reserve liabilities at the end of its preceding taxation year;

“mean maximum tax actuarial reserve” in respect of a particular class of life insurance policies of an insurer for a taxation year means 50% of the aggregate of its maximum tax actuarial reserve for that class of policies for the year and its maximum tax actuarial reserve for that class of policies for its preceding taxation year;

“policyholders’ liabilities” of an insurer at the end of a taxation year has the meaning assigned by subparagraph z.2 of the first paragraph of section 835 of the Act;

“property and casualty insurance surplus” of an insurer for a taxation year means the amount determined in accordance with section 818R53.4;

“reinsurance contract held amount” for a group of reinsurance contracts held by an insurer at the end of a taxation year has the meaning assigned by subparagraph z.1 of the first paragraph of section 835 of the Act;

“value” for a taxation year of a property of a person or partnership means the amount determined under Division VI;

“weighted Canadian liabilities” of an insurer at the end of a taxation year means the amount determined under section 818R53.1;

“weighted total liabilities” of an insurer at the end of a taxation year means the amount determined under section 818R53.3.

s. 818R51; O.C. 1463-2001, s. 86; O.C. 1282-2003, s. 50; O.C. 1149-2006, s. 38; O.C. 134-2009, s. 1; O.C. 701-2013, s. 30; O.C. 321-2017, s. 37; S.Q. 2023, c. 19, s. 149.

2017-04-12

818R53. In Chapters IX to XIV and XX,

“attributed surplus” of an insurer not resident in Canada for a taxation year means the aggregate of the insurer’s property and casualty insurance surplus for the year and

(a)  where the insurer elects for the year in prescribed form, 50% of the aggregate of all amounts each of which would have been determined at the end of the taxation year or at the end of the preceding taxation year in respect of the insurer under section 818R56, if throughout the year or preceding taxation year, as the case may be, the insurer had been a life insurer resident in Canada and had not carried on any insurance business other than a life insurance business or an accident and sickness insurance business; or

(b)  where paragraph a does not apply, 120% of the aggregate of all amounts each of which is 50% of the amount determined in accordance with regulations and guidelines made under Part XIII of the Insurance Companies Act (S.C. 1991, c. 47) to be the margin of assets in Canada over liabilities in Canada required to be maintained by the insurer at the end of the year or at the end of the preceding taxation year in respect of an insurance business carried on in Canada, other than a property and casualty insurance business;

“Canadian business property” of an insurer for a taxation year in respect of an insurance business means

(a)  if the insurer was resident in Canada throughout the year and did not carry on an insurance business outside Canada in the year, property used or held by it in the year in the course of carrying on the business in Canada; and

(b)  in any other case, designated insurance property of the insurer for the year in respect of the business;

“Canadian equity property” of a person or partnership, in this definition referred to as the “taxpayer”, at any time means property of the taxpayer that is

(a)  a share of the capital stock of a corporation resident in Canada, other than a corporation affiliated with the taxpayer, or an income bond, income debenture, small business development bond or small business bond issued by a person resident in Canada, other than a corporation affiliated with the taxpayer, or a Canadian partnership; or

(b)  that proportion of the shares of the capital stock of an entity that is a corporation affiliated with the taxpayer or an interest in an entity that is a partnership or trust that the total value for the taxation year or fiscal period of the entity that includes that time of Canadian equity property is of the total value for the taxation year or fiscal period of all property of the entity;

“Canadian investment fund” of an insurer at the end of a taxation year means the amount determined under Division II;

“Canadian investment property” of an insurer for a taxation year means an investment property of the insurer for the year, other than, if the insurer is not resident in Canada, property established by the insurer as not being effectively connected with its insurance business carried on in Canada in the year, that is, at any time in the year,

(a)  immovable property situated in Canada;

(b)  depreciable property situated in Canada or leased to a person resident in Canada for use inside or outside of Canada;

(c)  an obligation secured by a hypothec or mortgage, an agreement of sale or any other form of indebtedness in respect of property described in paragraph a or b;

(d)  a Canadian equity property;

(e)  a Canadian resource property;

(f)  a deposit balance of the insurer that is in Canadian currency;

(g)  a bond, debenture or other form of indebtedness, in Canadian currency, issued by

i.  a person resident in Canada or a Canadian partnership, or

ii.  the Government of Canada or of a province, or any other political subdivision of Canada;

(h)  a property that is a share of the capital stock of a corporation resident in Canada that is affiliated with the insurer or an interest in a Canadian partnership or a trust resident in Canada, if at least 75% of the value for the year of all property of the corporation, partnership or trust, as the case may be, is attributable to property that would be Canadian investment property if it were owned by an insurer; or

(i)  an amount due or an amount accrued to the insurer on account of income that

i.  is from designated insurance property for the year that is Canadian investment property of the insurer for the year because of any of paragraphs a to h, and

ii.  was assumed in computing the insurer’s Canadian reserve liabilities for the year;

“Canadian outstanding premiums” of an insurer at any time means the aggregate of all amounts each of which is the amount of an outstanding premium of the insurer in respect of an insurance policy at that time, to the extent that the amount of the premium has been assumed to have been paid in computing the insurer’s Canadian reserve liabilities at that time;

“Canadian reserve liabilities” of an insurer at the end of a taxation year means the amount determined under section 818R53.2;

“carrying value” of a taxpayer’s property for a taxation year, except as otherwise provided, means

(a)  if the taxpayer is an insurer, the amounts reflected in the taxpayer’s non-consolidated balance sheet at the end of the year that is accepted or, if that non-consolidated balance sheet had been prepared at the end of the year, that would have been accepted by

i.  the Superintendent of Financial Institutions of Canada, where the insurer is required under the Insurance Companies Act to report to the Superintendent, or

ii.  the Autorité des marchés financiers, the Superintendent of Insurance or other similar officer or authority of a province under the laws of which the insurer is incorporated and required by law to report to that officer or authority; and

(b)  in any other case, the amounts that would have been reflected in the taxpayer’s non-consolidated balance sheet at the end of the year if that non-consolidated balance sheet had been prepared in accordance with generally accepted accounting principles;

“deposit balance” of an insurer means an amount standing to the insurer’s credit as or on account of amounts deposited with a corporation authorized to accept deposits or to carry on the business of offering to the public its services as a trustee;

“equity limit” of an insurer for a taxation year means the amount determined under Division III;

“equity property” of a person or partnership, in this definition referred to as the “taxpayer”, at any time means property of the taxpayer that is

(a)  a share of the capital stock of a corporation, other than a corporation affiliated with the taxpayer, or an income bond, income debenture, small business development bond or small business bond issued by a person, other than a corporation affiliated with the taxpayer, or partnership; or

(b)  that proportion of the shares of the capital stock of an entity that is a corporation affiliated with the taxpayer or an interest in an entity that is a partnership or trust that the total value, for the taxation year or fiscal period of the entity that includes that time, of equity property of the entity is of the total value for the year or fiscal period of all property of the entity;

“financial institution” means a corporation that is

(a)  a corporation described in any of paragraphs a to e of the definition of “restricted financial institution” in section 1 of the Act; or

(b)  a particular corporation all or substantially all of the value of the assets of which is attributable to shares or indebtedness of one or more corporations referred to in paragraph a to which the particular corporation is affiliated;

“foreign policy loan” means an amount advanced by an insurer to a policyholder in accordance with the terms and conditions of a life insurance policy, other than a life insurance policy in Canada;

“gross Canadian life investment income” of a life insurer for a taxation year means the amount determined under Division IV;

“investment property” of an insurer for a taxation year means property described in section 818R64;

“mean Canadian investment fund” of an insurer for a taxation year means the amount determined under Division VII;

“mean Canadian outstanding premiums” of an insurer for a taxation year means 50% of the aggregate of its Canadian outstanding premiums at the end of the year and its Canadian outstanding premiums at the end of its preceding taxation year;

“mean Canadian reserve liabilities” of an insurer for a taxation year means 50% of the aggregate of its Canadian reserve liabilities at the end of the year and its Canadian reserve liabilities at the end of its preceding taxation year;

“mean maximum tax actuarial reserve” in respect of a particular class of life insurance policies of an insurer for a taxation year means 50% of the aggregate of its maximum tax actuarial reserve for that class of policies for the year and its maximum tax actuarial reserve for that class of policies for its preceding taxation year;

“mean policy loans” of an insurer for a taxation year means 50% of the aggregate of its policy loans at the end of the year and its policy loans at the end of its preceding taxation year;

“outstanding premiums” of an insurer with respect to an insurance policy at any time means premiums due to the insurer under the policy at that time but unpaid;

“property and casualty insurance surplus” of an insurer for a taxation year means the aggregate of the following amounts in respect of the insurer’s property and casualty insurance business:

(a)  7.5% of the aggregate of its unearned premium reserve at the end of the year, its unearned premium reserve at the end of its preceding taxation year, its provision for unpaid claims and adjustment expenses at the end of the year and its provision for unpaid claims and adjustment expenses at the end of its preceding taxation year, each of those reserves and provisions being net of reinsurance recoverables; and

(b)  50% of the aggregate of its investment valuation reserve at the end of the year and its investment valuation reserve at the end of its preceding taxation year;

“reinsurance recoverable” means the aggregate of all amounts each of which is an amount reported as a reinsurance asset of the insurer at the end of a taxation year in respect of an amount recoverable from a reinsurer;

“value” for a taxation year of a property of a person or partnership means the amount determined under Division VI;

“weighted Canadian liabilities” of an insurer at the end of a taxation year means the amount determined under section 818R53.1;

“weighted total liabilities” of an insurer at the end of a taxation year means the amount determined under section 818R53.3.

s. 818R51; O.C. 1463-2001, s. 86; O.C. 1282-2003, s. 50; O.C. 1149-2006, s. 38; O.C. 134-2009, s. 1; O.C. 701-2013, s. 30; O.C. 321-2017, s. 37.

2013-07-03

818R53. In Chapters IX to XIV, XVI and XX,

“attributed surplus” of an insurer not resident in Canada for a taxation year means the aggregate of the insurer’s property and casualty insurance surplus for the year and

(a)  where the insurer elects for the year in prescribed form, 50% of the aggregate of all amounts each of which would have been determined at the end of the taxation year or at the end of the preceding taxation year in respect of the insurer under section 818R56, if throughout the year or preceding taxation year, as the case may be, the insurer had been a life insurer resident in Canada and had not carried on any insurance business other than a life insurance business or an accident and sickness insurance business; or

(b)  where paragraph a does not apply, 120% of the aggregate of all amounts each of which is 50% of the amount determined in accordance with regulations and guidelines made under Part XIII of the Insurance Companies Act (S.C. 1991, c. 47) to be the margin of assets in Canada over liabilities in Canada required to be maintained by the insurer at the end of the year or at the end of the preceding taxation year in respect of an insurance business carried on in Canada, other than a property and casualty insurance business;

“Canadian business property” of an insurer for a taxation year in respect of an insurance business means

(a)  if the insurer was resident in Canada throughout the year and did not carry on an insurance business outside Canada in the year, property used or held by it in the year in the course of carrying on the business in Canada; and

(b)  in any other case, designated insurance property of the insurer for the year in respect of the business;

“Canadian equity property” of a person or partnership, in this definition referred to as the “taxpayer”, at any time means property of the taxpayer that is

(a)  a share of the capital stock of a corporation resident in Canada, other than a corporation affiliated with the taxpayer, or an income bond, income debenture, small business development bond or small business bond issued by a person resident in Canada, other than a corporation affiliated with the taxpayer, or a Canadian partnership; or

(b)  that proportion of the shares of the capital stock of an entity that is a corporation affiliated with the taxpayer or an interest in an entity that is a partnership or trust that the total value for the taxation year or fiscal period of the entity that includes that time of Canadian equity property is of the total value for the taxation year or fiscal period of all property of the entity;

“Canadian investment fund” of an insurer at the end of a taxation year means the amount determined under Division II;

“Canadian investment property” of an insurer for a taxation year means an investment property of the insurer for the year, other than, if the insurer is not resident in Canada, property established by the insurer as not being effectively connected with its insurance business carried on in Canada in the year, that is, at any time in the year,

(a)  immovable property situated in Canada;

(b)  depreciable property situated in Canada or leased to a person resident in Canada for use inside or outside of Canada;

(c)  an obligation secured by a hypothec or mortgage, an agreement of sale or any other form of indebtedness in respect of property described in paragraph a or b;

(d)  a Canadian equity property;

(e)  a Canadian resource property;

(f)  a deposit balance of the insurer that is in Canadian currency;

(g)  a bond, debenture or other form of indebtedness, in Canadian currency, issued by

i.  a person resident in Canada or a Canadian partnership, or

ii.  the Government of Canada or of a province, or any other political subdivision of Canada;

(h)  a property that is a share of the capital stock of a corporation resident in Canada that is affiliated with the insurer or an interest in a Canadian partnership or a trust resident in Canada, if at least 75% of the value for the year of all property of the corporation, partnership or trust, as the case may be, is attributable to property that would be Canadian investment property if it were owned by an insurer; or

(i)  an amount due or an amount accrued to the insurer on account of income that

i.  is from designated insurance property for the year that is Canadian investment property of the insurer for the year because of any of paragraphs a to h, and

ii.  was assumed in computing the insurer’s Canadian reserve liabilities for the year;

“Canadian outstanding premiums” of an insurer at any time means the aggregate of all amounts each of which is the amount of an outstanding premium of the insurer in respect of an insurance policy at that time, to the extent that the amount of the premium has been assumed to have been paid in computing the insurer’s Canadian reserve liabilities at that time;

“Canadian reserve liabilities” of an insurer at the end of a taxation year means the amount determined under section 818R53.2;

“carrying value” of a taxpayer’s property for a taxation year, except as otherwise provided, means

(a)  if the taxpayer is an insurer, the amounts reflected in the taxpayer’s non-consolidated balance sheet at the end of the year that is accepted or, if that non-consolidated balance sheet had been prepared at the end of the year, that would have been accepted by

i.  the Superintendent of Financial Institutions of Canada, where the insurer is required under the Insurance Companies Act to report to the Superintendent, or

ii.  the Autorité des marchés financiers, the Superintendent of Insurance or other similar officer or authority of a province under the laws of which the insurer is incorporated and required by law to report to that officer or authority; and

(b)  in any other case, the amounts that would have been reflected in the taxpayer’s non-consolidated balance sheet at the end of the year if that non-consolidated balance sheet had been prepared in accordance with generally accepted accounting principles;

“deposit balance” of an insurer means an amount standing to the insurer’s credit as or on account of amounts deposited with a corporation authorized to accept deposits or to carry on the business of offering to the public its services as a trustee;

“equity limit” of an insurer for a taxation year means the amount determined under Division III;

“equity property” of a person or partnership, in this definition referred to as the “taxpayer”, at any time means property of the taxpayer that is

(a)  a share of the capital stock of a corporation, other than a corporation affiliated with the taxpayer, or an income bond, income debenture, small business development bond or small business bond issued by a person, other than a corporation affiliated with the taxpayer, or partnership; or

(b)  that proportion of the shares of the capital stock of an entity that is a corporation affiliated with the taxpayer or an interest in an entity that is a partnership or trust that the total value, for the taxation year or fiscal period of the entity that includes that time, of equity property of the entity is of the total value for the year or fiscal period of all property of the entity;

“financial institution” means a corporation that is

(a)  a corporation described in any of paragraphs a to e of the definition of “restricted financial institution” in section 1 of the Act; or

(b)  a particular corporation all or substantially all of the value of the assets of which is attributable to shares or indebtedness of one or more corporations referred to in paragraph a to which the particular corporation is affiliated;

“foreign policy loan” means an amount advanced by an insurer to a policyholder in accordance with the terms and conditions of a life insurance policy, other than a life insurance policy in Canada;

“gross Canadian life investment income” of a life insurer for a taxation year means the amount determined under Division IV;

“investment property” of an insurer for a taxation year means property described in section 818R64;

“mean Canadian investment fund” of an insurer for a taxation year means the amount determined under Division VII;

“mean Canadian outstanding premiums” of an insurer for a taxation year means 50% of the aggregate of its Canadian outstanding premiums at the end of the year and its Canadian outstanding premiums at the end of its preceding taxation year;

“mean Canadian reserve liabilities” of an insurer for a taxation year means 50% of the aggregate of its Canadian reserve liabilities at the end of the year and its Canadian reserve liabilities at the end of its preceding taxation year;

“mean maximum tax actuarial reserve” in respect of a particular class of life insurance policies of an insurer for a taxation year means 50% of the aggregate of its maximum tax actuarial reserve for that class of policies for the year and its maximum tax actuarial reserve for that class of policies for its preceding taxation year;

“mean policy loans” of an insurer for a taxation year means 50% of the aggregate of its policy loans at the end of the year and its policy loans at the end of its preceding taxation year;

“outstanding premiums” of an insurer with respect to an insurance policy at any time means premiums due to the insurer under the policy at that time but unpaid;

“property and casualty insurance surplus” of an insurer for a taxation year means the aggregate of the following amounts in respect of the insurer’s property and casualty insurance business:

(a)  7.5% of the aggregate of its unearned premium reserve at the end of the year, its unearned premium reserve at the end of its preceding taxation year, its provision for unpaid claims and adjustment expenses at the end of the year and its provision for unpaid claims and adjustment expenses at the end of its preceding taxation year, each of those reserves and provisions being net of reinsurance recoverables; and

(b)  50% of the aggregate of its investment valuation reserve at the end of the year and its investment valuation reserve at the end of its preceding taxation year;

“reinsurance recoverable” means the aggregate of all amounts each of which is an amount reported as a reinsurance asset of the insurer at the end of a taxation year in respect of an amount recoverable from a reinsurer;

“value” for a taxation year of a property of a person or partnership means the amount determined under Division VI;

“weighted Canadian liabilities” of an insurer at the end of a taxation year means the amount determined under section 818R53.1;

“weighted total liabilities” of an insurer at the end of a taxation year means the amount determined under section 818R53.3.

s. 818R51; O.C. 1463-2001, s. 86; O.C. 1282-2003, s. 50; O.C. 1149-2006, s. 38; O.C. 134-2009, s. 1; O.C. 701-2013, s. 30.

2012-09-01

818R53. In Chapters IX to XIV, XVI and XX,

“attributed surplus” of an insurer not resident in Canada for a taxation year means the aggregate of the insurer’s property and casualty insurance surplus for the year and

(a)  where the insurer elects for the year in prescribed form, 50% of the aggregate of all amounts each of which would have been determined at the end of the taxation year or at the end of the preceding taxation year in respect of the insurer under section 818R56, if throughout the year or preceding taxation year, as the case may be, the insurer had been a life insurer resident in Canada and had not carried on any insurance business other than a life insurance business or an accident and sickness insurance business; or

(b)  where paragraph a does not apply, 120% of the aggregate of all amounts each of which is 50% of the amount determined in accordance with regulations and guidelines made under Part XIII of the Insurance Companies Act (S.C. 1991, c. 47) to be the margin of assets in Canada over liabilities in Canada required to be maintained by the insurer at the end of the year or at the end of the preceding taxation year in respect of an insurance business carried on in Canada, other than a property and casualty insurance business;

“Canadian business property” of an insurer for a taxation year in respect of an insurance business means

(a)  if the insurer was resident in Canada throughout the year and did not carry on an insurance business outside Canada in the year, property used or held by it in the year in the course of carrying on the business in Canada; and

(b)  in any other case, designated insurance property of the insurer for the year in respect of the business;

“Canadian equity property” of a person or partnership, in this definition referred to as the “taxpayer”, at any time means property of the taxpayer that is

(a)  a share of the capital stock of a corporation resident in Canada, other than a corporation affiliated with the taxpayer, or an income bond, income debenture, small business development bond or small business bond issued by a person resident in Canada, other than a corporation affiliated with the taxpayer, or a Canadian partnership; or

(b)  that proportion of the shares of the capital stock of an entity that is a corporation affiliated with the taxpayer or an interest in an entity that is a partnership or trust that the total value for the taxation year or fiscal period of the entity that includes that time of Canadian equity property is of the total value for the taxation year or fiscal period of all property of the entity;

“Canadian investment fund” of an insurer at the end of a taxation year means the amount determined under Division II;

“Canadian investment property” of an insurer for a taxation year means an investment property of the insurer for the year, other than, if the insurer is not resident in Canada, property established by the insurer as not being effectively connected with its insurance business carried on in Canada in the year, that is, at any time in the year,

(a)  immovable property situated in Canada;

(b)  depreciable property situated in Canada or leased to a person resident in Canada for use inside or outside of Canada;

(c)  an obligation secured by a hypothec or mortgage, an agreement of sale or any other form of indebtedness in respect of property described in paragraph a or b;

(d)  a Canadian equity property;

(e)  a Canadian resource property;

(f)  a deposit balance of the insurer that is in Canadian currency;

(g)  a bond, debenture or other form of indebtedness, in Canadian currency, issued by

i.  a person resident in Canada or a Canadian partnership, or

ii.  the Government of Canada or of a province, or any other political subdivision of Canada;

(h)  a property that is a share of the capital stock of a corporation resident in Canada that is affiliated with the insurer or an interest in a Canadian partnership or a trust resident in Canada, if at least 75% of the value for the year of all property of the corporation, partnership or trust, as the case may be, is attributable to property that would be Canadian investment property if it were owned by an insurer; or

(i)  an amount due or an amount accrued to the insurer on account of income that

i.  is from designated insurance property for the year that is Canadian investment property of the insurer for the year because of any of paragraphs a to h, and

ii.  was assumed in computing the insurer’s Canadian reserve liabilities for the year;

“Canadian outstanding premiums” of an insurer at any time means the aggregate of all amounts each of which is the amount of an outstanding premium of the insurer in respect of an insurance policy at that time, to the extent that the amount of the premium has been assumed to have been paid in computing the insurer’s Canadian reserve liabilities at that time;

“Canadian reserve liabilities” of an insurer at the end of a taxation year means the aggregate of the insurer’s liabilities and reserves, other than liabilities and reserves in respect of a segregated fund, in respect of insurance policies each of which is

(a)  a life insurance policy in Canada;

(b)  a fire insurance policy issued or effected in respect of property situated in Canada; or

(c)  an insurance policy of any other class covering risks ordinarily within Canada at the time the policy was issued or effected;

“carrying value” of a taxpayer’s property for a taxation year, except as otherwise provided, means

(a)  if the taxpayer is an insurer, the amounts reflected in the taxpayer’s non-consolidated balance sheet at the end of the year that is accepted or, if that non-consolidated balance sheet had been prepared at the end of the year, that would have been accepted by

i.  the Superintendent of Financial Institutions of Canada, where the insurer is required under the Insurance Companies Act to report to the Superintendent, or

ii.  the Autorité des marchés financiers, the Superintendent of Insurance or other similar officer or authority of a province under the laws of which the insurer is incorporated and required by law to report to that officer or authority; and

(b)  in any other case, the amounts that would have been reflected in the taxpayer’s non-consolidated balance sheet at the end of the year if that non-consolidated balance sheet had been prepared in accordance with generally accepted accounting principles;

“deposit balance” of an insurer means an amount standing to the insurer’s credit as or on account of amounts deposited with a corporation authorized to accept deposits or to carry on the business of offering to the public its services as a trustee;

“equity limit” of an insurer for a taxation year means the amount determined under Division III;

“equity property” of a person or partnership, in this definition referred to as the “taxpayer”, at any time means property of the taxpayer that is

(a)  a share of the capital stock of a corporation, other than a corporation affiliated with the taxpayer, or an income bond, income debenture, small business development bond or small business bond issued by a person, other than a corporation affiliated with the taxpayer, or partnership; or

(b)  that proportion of the shares of the capital stock of an entity that is a corporation affiliated with the taxpayer or an interest in an entity that is a partnership or trust that the total value, for the taxation year or fiscal period of the entity that includes that time, of equity property of the entity is of the total value for the year or fiscal period of all property of the entity;

“financial institution” means a corporation that is

(a)  a corporation described in any of paragraphs a to e of the definition of “restricted financial institution” in section 1 of the Act; or

(b)  a particular corporation all or substantially all of the value of the assets of which is attributable to shares or indebtedness of one or more corporations referred to in paragraph a to which the particular corporation is affiliated;

“foreign policy loan” means an amount advanced by an insurer to a policyholder in accordance with the terms and conditions of a life insurance policy, other than a life insurance policy in Canada;

“gross Canadian life investment income” of a life insurer for a taxation year means the amount determined under Division IV;

“investment property” of an insurer for a taxation year means property described in section 818R64;

“mean Canadian investment fund” of an insurer for a taxation year means the amount determined under Division VII;

“mean Canadian outstanding premiums” of an insurer for a taxation year means 50% of the aggregate of its Canadian outstanding premiums at the end of the year and its Canadian outstanding premiums at the end of its preceding taxation year;

“mean Canadian reserve liabilities” of an insurer for a taxation year means 50% of the aggregate of its Canadian reserve liabilities at the end of the year and its Canadian reserve liabilities at the end of its preceding taxation year;

“mean maximum tax actuarial reserve” in respect of a particular class of life insurance policies of an insurer for a taxation year means 50% of the aggregate of its maximum tax actuarial reserve for that class of policies for the year and its maximum tax actuarial reserve for that class of policies for its preceding taxation year;

“mean policy loans” of an insurer for a taxation year means 50% of the aggregate of its policy loans at the end of the year and its policy loans at the end of its preceding taxation year;

“outstanding premiums” of an insurer with respect to an insurance policy at any time means premiums due to the insurer under the policy at that time but unpaid;

“property and casualty insurance surplus” of an insurer for a taxation year means the aggregate of the following amounts in respect of the insurer’s property and casualty insurance business:

(a)  7.5% of the aggregate of its unearned premium reserve at the end of the year, its unearned premium reserve at the end of its preceding taxation year, its provision for unpaid claims and adjustment expenses at the end of the year and its provision for unpaid claims and adjustment expenses at the end of its preceding taxation year, each of those reserves and provisions being net of reinsurance recoverables; and

(b)  50% of the aggregate of its investment valuation reserve at the end of the year and its investment valuation reserve at the end of its preceding taxation year;

“reinsurance recoverable” means

(a)  in respect of an insurance business, other than a life insurance business, of an insurer that is not resident in Canada, the aggregate of all amounts each of which is an item reported as an asset of the insurer at the end of a taxation year in respect of an amount recoverable from a reinsurer for unearned premiums or unpaid claims and adjustment expenses in respect of the reinsurance of a policy that was issued in the course of carrying on the insurance business to the extent that the amount is included in the insurer’s Canadian reserve liabilities at that time and the amount is not an outstanding premium, policy loan or investment property; and

(b)  in any other case, nil;

“value” for a taxation year of a property of a person or partnership means the amount determined under Division VI;

“weighted Canadian liabilities” of an insurer at the end of a taxation year means the aggregate of

(a)  300% of the amount by which the aggregate of all amounts each of which is an amount that is in respect of an insurance business carried on by the insurer in Canada and that is reported as a liability, other than a liability in respect of an amount payable out of a segregated fund, of the insurer in respect of a life insurance policy in Canada, other than an annuity, or an accident and sickness insurance policy at the end of the year exceeds the aggregate of the insurer’s policy loans, other than policy loans in respect of annuities, at the end of the year; and

(b)  the amount by which the aggregate of all amounts each of which is an amount in respect of an insurance business carried on by the insurer in Canada that is reported as a liability of the insurer at the end of the year exceeds the aggregate of the insurer’s policy loans in respect of annuities at the end of the year, except to the extent that the amount is

i.  in respect of an insurance policy described in paragraph a,

ii.  a liability in respect of an amount payable out of a segregated fund, or

iii.  a debt incurred or assumed by the insurer to acquire a property of the insurer;

“weighted total liabilities” of an insurer at the end of a taxation year means the aggregate of

(a)  300% of the amount by which the aggregate of all amounts each of which is an amount that is in respect of an insurance business carried on by the insurer and that is reported as a liability, other than a liability in respect of an amount payable out of a segregated fund, of the insurer in respect of a life insurance policy, other than an annuity, or an accident and sickness insurance policy exceeds the aggregate of the insurer’s policy loans and foreign policy loans, other than policy loans and foreign policy loans in respect of annuities, at the end of the year; and

(b)  the amount by which the aggregate of all amounts each of which is an amount in respect of an insurance business carried on by the insurer that is reported as a liability of the insurer at the end of the year exceeds the aggregate of the insurer’s policy loans and foreign policy loans in respect of annuities at the end of the year, except to the extent that the amount is

i.  in respect of an insurance policy described in paragraph a,

ii.  a liability in respect of an amount payable out of a segregated fund, or

iii.  a debt incurred or assumed by the insurer to acquire a property of the insurer.

s. 818R51; O.C. 1463-2001, s. 86; O.C. 1282-2003, s. 50; O.C. 1149-2006, s. 38; O.C. 134-2009, s. 1.