I-3 - Taxation Act

Section 737.18.17.14 Disposition versions

2024-05-07

737.18.17.14. In this Title,

“certificate” for a taxation year of a corporation or a fiscal period of a partnership, in relation to a large investment project, means the certificate that, for the purposes of this Title, is issued by the Minister of Finance, in relation to the large investment project, for the corporation’s taxation year or the partnership’s fiscal period, as the case may be;

“cumulative total eligible expenses” of a corporation at the end of a particular taxation year or of a partnership at the end of a particular fiscal period, in relation to a large investment project, means the lesser of $1,000,000,000 and the amount determined by the formula

(A + B) – (C + D);

“date of the beginning of the tax-free period” in respect of a large investment project of a corporation or a partnership means the date that is specified as such in the first certificate, in relation to the large investment project, or in the qualification certificate issued to the corporation or partnership, in relation to the project, where it acquired all or substantially all of the activities arising from the carrying out of the large investment project and where the Minister of Finance authorized the transfer of those activities to the corporation or partnership, according to the qualification certificate;

“excluded corporation” for a taxation year means a corporation that meets any of the following conditions:

(a)  it is exempt from tax for the year under Book VIII;

(b)  it would be exempt from tax for the year under section 985, but for section 192; or

(c)  more than 25% of its gross revenue for the year derives from activities carried on in one or more excluded sectors of activities;

“excluded expense” of a corporation or a partnership means

(a)  an expense incurred with a person with which the corporation or a corporation that is a member of the partnership is not dealing at arm’s length;

(b)  financing expenses, including borrowing costs; or

(c)  the salaries or wages incurred in respect of the employees of the corporation or partnership and the consideration incurred in respect of services rendered to the corporation or partnership, other than salaries, wages or consideration related to the installation of a property;

“excluded partnership” for a fiscal period means a partnership more than 25% of whose gross revenue for the fiscal period derives from activities carried on in one or more excluded sectors of activities;

“excluded sector of activities” means any of the sectors of activities described in section 10.10 of Schedule E to the Act respecting the sectoral parameters of certain fiscal measures (chapter P-5.1);

“investment period” in respect of a large investment project of a corporation or a partnership means the 48-month period that begins on the date that is specified as such in the qualification certificate issued to the corporation or partnership in relation to the large investment project;

“large investment project” of a corporation or a partnership means an investment project in respect of which a qualification certificate has been issued to the corporation or partnership, as the case may be, by the Minister of Finance, for the purposes of this Title;

“last day of the tax-free period” in respect of a large investment project means the last day of the 10-year period that begins on the date of the beginning of the tax-free period in respect of the project;

“maximum annual contribution exemption amount” of a corporation or a partnership for a taxation year or fiscal period, in relation to a large investment project, means the amount determined, for the year or fiscal period, as the case may be, in respect of the large investment project, by the formula in the second paragraph of section 34.1.0.5 of the Act respecting the Régie de l’assurance maladie du Québec (chapter R-5);

“maximum annual tax exemption amount” of a corporation for a taxation year, in relation to a large investment project, means the amount determined for the year, in respect of the large investment project, by the formula in subparagraph i of subparagraph b of the first paragraph of section 737.18.17.18, where the project is the corporation’s project, or in subparagraph ii of that subparagraph b, where the project is that of a partnership of which the corporation is a member at the end of the partnership’s fiscal period that ends in that year;

“qualified corporation” for a taxation year means a corporation (other than an excluded corporation for the year) that, in the year, carries on a business in Québec and has an establishment in Québec;

“qualified partnership” for a fiscal period means a partnership (other than an excluded partnership for the fiscal period) that, in the fiscal period, carries on a business in Québec and has an establishment in Québec;

“qualified property” of a corporation or a partnership, in respect of a large investment project, means a property that

(a)  is included in any of the classes of Schedule B to the Regulation respecting the Taxation Act (chapter I-3, r. 1);

(b)  is acquired by the corporation or partnership to be used mainly in Québec in the course of carrying out the large investment project;

(c)  was not, before its acquisition by the corporation or partnership, used for any purpose or acquired to be used or leased for any purpose whatsoever; and

(d)  is not acquired in substitution for a property in respect of which an expense is included in the total eligible expenses in relation to the large investment project;

“tax-free period” of a corporation or a partnership, for a taxation year or a fiscal period, in relation to a large investment project, means the part of the taxation year or fiscal period that is both covered by a certificate issued to the corporation or partnership in respect of the large investment project and included in the 10-year period that begins on the date of the beginning of the tax-free period in respect of the project or, where the corporation or partnership acquired all or substantially all of the activities arising from the carrying out of the large investment project and the Minister of Finance authorized the transfer of those activities to the corporation or partnership, according to the qualification certificate issued to the corporation or partnership, in relation to the project, in the part of that 10-year period that begins on the date of acquisition;

“territory with high economic vitality” means a municipality mentioned in Schedule I to the Act respecting the Communauté métropolitaine de Montréal (chapter C-37.01) or Schedule A to the Act respecting the Communauté métropolitaine de Québec (chapter C-37.02);

“territory with intermediate economic vitality” means a territory situated in Québec that is neither a territory with high economic vitality nor a territory with low economic vitality;

“territory with low economic vitality” means

(a)  one of the following regional county municipalities, subject to the third paragraph:

i.  Municipalité régionale de comté d’Antoine-Labelle,

ii.  Municipalité régionale de comté d’Avignon,

iii.  Municipalité régionale de comté de Bonaventure,

iv.  Municipalité régionale de comté de Charlevoix-Est,

v.  Municipalité régionale de comté de La Haute-Côte-Nord,

vi.  Municipalité régionale de comté de La Haute-Gaspésie,

vii.  Municipalité régionale de comté de La Matanie,

viii.  Municipalité régionale de comté de La Matapédia,

ix.  Municipalité régionale de comté de La Mitis,

x.  Municipalité régionale de comté de La Vallée-de-la-Gatineau,

xi.  Municipalité régionale de comté de Maria-Chapdelaine,

xii.  Municipalité régionale de comté de Maskinongé,

xiii.  Municipalité régionale de comté de Mékinac,

xiv.  Municipalité régionale de comté de Papineau,

xv.  Municipalité régionale de comté de Pontiac,

xvi.  Municipalité régionale de comté de Témiscamingue,

xvii.  Municipalité régionale de comté de Témiscouata,

xviii.  Municipalité régionale de comté des Appalaches,

xix.  Municipalité régionale de comté des Basques,

xx.  Municipalité régionale de comté des Etchemins,

xxi.  Municipalité régionale de comté des Sources,

xxii.  Municipalité régionale de comté du Domaine-du-Roy,

xxiii.  Municipalité régionale de comté du Golfe-du-Saint-Laurent, or

xxiv.  Municipalité régionale de comté du Rocher-Percé;

(b)  the urban agglomeration of La Tuque, as described in section 8 of the Act respecting the exercise of certain municipal powers in certain urban agglomerations (chapter E-20.001); or

(c)  Ville de Shawinigan;

“total eligible expenses” at a particular time, of a corporation or a partnership, in relation to a large investment project, means the aggregate of all amounts each of which is an expense (other than an excluded expense) incurred by the corporation or partnership before that time for the acquisition, in the investment period in respect of the large investment project, of a qualified property in respect of the project, to the extent that the expense is included in the capital cost of the property for a taxation year or a fiscal period, as the case may be, that ends at or before that time and to the extent that it is paid at or before that time.

In the formula in the definition of “cumulative total eligible expenses” in the first paragraph,

(a)  A is the total eligible expenses of the corporation or partnership at the end of the particular taxation year or particular fiscal period, as the case may be, in relation to the large investment project;

(b)  B is the aggregate of all amounts each of which is government assistance or non-government assistance, within the meaning assigned to those expressions by the first paragraph of section 1029.6.0.0.1, that, because of D in the formula, reduced the cumulative total eligible expenses of the corporation for a preceding taxation year or of the partnership for a preceding fiscal period, in relation to the large investment project, and that is repaid, pursuant to a legal obligation, at or before the end of the particular taxation year or particular fiscal period, as the case may be;

(c)  C is the aggregate of all amounts each of which is the greater of the consideration received following the disposition of a qualified property, in respect of the large investment project, before the end of the 730-day period that follows the beginning of its use by the corporation or partnership and of the fair market value of the qualified property at the time of the disposition, unless the disposition results from the loss of the property, of the involuntary destruction of the property by fire, theft or water, or of a major breakdown of the property; and

(d)  D is the aggregate of all amounts each of which is government assistance or non-government assistance, within the meaning assigned to those expressions by the first paragraph of section 1029.6.0.0.1, that the corporation or partnership has received, is entitled to receive or may reasonably expect to receive and that is attributable to an expense included in the total eligible expenses referred to in subparagraph a.

Where this Title applies in respect of the tax-free period of a corporation or a partnership, in relation to a large investment project, that begins, as the case may be,

(a)  before 1 April 2023, paragraph a of the definition of “territory with low economic vitality” in the first paragraph is to be read without reference to subparagraphs xvi and xviii; or

(b)  before 1 July 2025, paragraph a of the definition of “territory with low economic vitality” in the first paragraph is to be read as if

i.  the following subparagraph were inserted after subparagraph i:

“i.1. Municipalité régionale de comté d’Argenteuil,”, and

ii.  the following subparagraph were inserted after subparagraph xii:

“xii.1. Municipalité régionale de comté de Matawinie,”.

For the purposes of subparagraph b of the second paragraph, an amount of assistance is deemed to be repaid at a particular time by a corporation or a partnership, as the case may be, pursuant to a legal obligation, if that amount

(a)  reduced, because of D in the formula in the definition of “cumulative total eligible expenses” in the first paragraph, the cumulative total eligible expenses of the corporation for a taxation year or of the partnership for a fiscal period;

(b)  was not received by the corporation or partnership; and

(c)  ceased at the particular time to be an amount that the corporation or partnership could reasonably expect to receive.

2024, c. 11, s. 71.