I-3 - Taxation Act

Section 87 Disposition versions

2021-06-04

87. A taxpayer shall include in computing his income from a business or property for a taxation year,

(a)  any amount he receives in the year in the course of a business, even if such amount

i.  is paid him for services not rendered or goods not delivered before the end of the year, or may be regarded as not having been earned in the year or a previous year, or

ii.  is, under an arrangement or understanding, repayable in whole or in part on the return or resale to the taxpayer of articles in or by means of which goods were delivered to a customer;

(b)  any amount receivable in respect of property sold or services rendered in the course of a business in the year, even if that amount or any part thereof is not due until a subsequent year, unless the method adopted for computing his income from the business and accepted for the purposes of this Part does not require him to include, in computing his income for a taxation year, an amount not received in the year and, for the purposes of this paragraph, an amount is deemed to have become receivable in respect of services rendered in the course of a business on a day that is the earlier of the day upon which the account in respect of the services was rendered and the day upon which that account would have been rendered had there been no undue delay;

(c)  subject to sections 92 and 92.1.1, any amount received or receivable by the taxpayer in the year as interest, depending on the method regularly followed by the taxpayer in computing the taxpayer’s income, to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year;

(d)  any amount deducted under section 140 as a reserve in computing his income for the preceding taxation year;

(d.1)  any amount deducted under section 140.2 as a reserve in computing his income for the preceding taxation year;

(d.2)  any amount deducted under section 150.2 as a reserve in computing the taxpayer’s income for the preceding taxation year;

(e)  any amount deducted in computing his income from a business for the preceding year

i.  under section 150, including any amount substituted under section 151,

ii.  under sections 150.1 and 152, or

iii.  under section 153;

(e.1)  where the taxpayer is an insurer, any amount prescribed in respect of the insurer for the year;

(f)  any amount received or receivable under an insurance policy or otherwise, as compensation for damage to his depreciable property, that he expends for repair of the damage within the year and within a reasonable time after the damage;

(g)  any amount received by the taxpayer in the year and established in respect of the use of or production from property, even if that amount is an instalment of the sale price of such property, but not including an instalment of the sale price of agricultural land;

(g.1)  any proceeds of disposition in respect of which section 158.6 applies;

(h)  any amount deducted as an allowance for the quadrennial or special inspection of a vessel under section 154 in computing his income for the previous year;

(i)  any amount, other than an amount referred to in paragraph i.1, received in the year on account of a debt or a loan or lending asset in respect of which a deduction for bad debts or uncollectible loans or lending assets had been made in computing his income for a preceding taxation year;

(i.1)  that proportion of 1/2 of the amount received in the year on account of a debt in respect of which a deduction for a bad debt under section 142.1 had been made in computing the taxpayer’s income for a preceding taxation year that the amount deducted under that section in respect of that debt is of the aggregate of the amount so deducted and the amount deemed under section 142.1 or 142.2 to be an allowable capital loss in respect of that debt;

(j)  any amount received by him in the year out of or under an employee trust or a profit sharing plan established for the benefit of employees of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length;

(j.1)  the amount by which the aggregate of amounts received by him in the year out of or under an employee benefit plan to which he has contributed as an employer, other than amounts included in computing his income by virtue of paragraph n, exceeds the amount by which the aggregate of all amounts so contributed by him to the plan, or included in computing his income for any preceding taxation year by virtue of this paragraph, exceeds the aggregate of all amounts deducted by him in respect of his contributions to the plan in computing his income for the year or any preceding taxation year, or received by him out of or under the plan in any preceding taxation year, other than amounts included in computing his income by virtue of paragraph n;

(j.2)  any amount in respect of deferred amounts under a salary deferral arrangement in respect of another person, that was deductible under section 78.2 in computing the income of that other person for a taxation year ending in the year where the deferred amounts have been deducted under paragraph p of section 157 in computing the taxpayer’s income for preceding taxation years;

(j.3)  any amount he must include in computing his income for the year under section 890.11;

(k)  any amount he must include in computing his income for the year under Title IX in respect of a dividend paid by a corporation resident in Canada on a share of its capital stock;

(l)  any amount required by Title X to be included in computing the taxpayer’s income for the year;

(m)  any amount that is, under Title XI, income from a business or property of the taxpayer;

(m.1)  the aggregate of all amounts each of which is an amount determined, in relation to a partnership, in accordance with section 87.0.1;

(n)  any amount he must include in computing his income for the year under Title XII or section 1121.1, except

i.  any amount deemed to be a taxable capital gain of the taxpayer under that Title, and

ii.  any amount paid or payable to the taxpayer out of or under an RCA trust within the meaning assigned by section 890.1;

(o)  any amount received by the taxpayer in the year as a stabilization payment, or as a refund of a levy, under the Western Grain Stabilization Act (R.S.C. 1985, c. W-7) or as a payment, or a refund of a premium, in respect of the gross revenue insurance program established under the Farm Income Protection Act (S.C. 1991, c. 22);

(p)  any prescribed amount deducted by him for the year as employment tax credit;

(q)  any amount that, in respect of a property described in his inventory, at the end of the year, is an allowance in respect of depreciation, obsolescence or depletion included in the cost amount of that property to him at the end of the year;

(r)  (paragraph repealed);

(s)  the amount of any grant received by him in the year under a prescribed program relating to home insulation or energy conversion in respect of a property used by him principally for the purpose of gaining or producing income from a business or property;

(t)  the amount by which the aggregate of amounts determined at the end of the year in respect of him under section 225 exceeds the aggregate of amounts determined at that time in respect of him under sections 222 to 224;

(u)  the prescribed amount deducted in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), to the extent that such amount was not included in computing his income for a preceding taxation year under this paragraph or is not included in an amount determined under subparagraph f of the second paragraph of section 93, section 101 or 225, subparagraph vi of paragraph l of section 257, subparagraph ii of paragraph n of section 257 or paragraph g of section 399;

(v)  (paragraph repealed);

(w)  any particular amount, other than a prescribed amount, received by the taxpayer in the year, in the course of earning income from a business or property, from a government, municipality or other public authority, a person or partnership in this paragraph referred to as the “particular person”, who pays the particular amount in the course of earning income from a business or property, or in order to achieve a benefit for the particular person or for persons with whom the particular person does not deal at arm’s length, or in circumstances where it is reasonable to conclude that the particular person would not have paid the particular amount but for the receipt by the particular person of amounts from another particular person referred to in this paragraph or a government, municipality or public authority, where the particular amount can reasonably be considered to have been received as a refund, reimbursement, contribution or allowance or as assistance, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of assistance, in respect of an amount included in, or deducted as, the cost of property or in respect of an outlay or expense, or as an inducement, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of inducement, to the extent that the particular amount

i.  was not otherwise included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Part, any balance of undeducted outlays, expenses or other amounts, for the year or a preceding taxation year,

ii.  except as provided by any provision of any of Titles III.3 to III.5 of Book V or of Chapter III.1 of Title III of Book IX, does not reduce, for the purposes of this Part, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iii.  does not reduce, pursuant to paragraph f.2 of section 257 or section 87.4 or 101.6, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iv.  may not reasonably be considered to be a payment made in respect of the acquisition by the particular person or the public authority of an interest in the taxpayer, a right in the taxpayer’s business or a real right in the taxpayer’s property, or

v.  is not an amount received by the taxpayer in respect of a restrictive covenant, within the meaning assigned by section 333.4, that was included under section 333.5 in computing the income of a person related to the taxpayer;

(w.1)  where the year ends after 31 December 2006, any amount, other than an amount otherwise included in computing the taxpayer’s income for the year or a preceding taxation year, that was received by the taxpayer, including by way of a deduction from tax, in the year as a refund, reimbursement, contribution or allowance, in respect of an amount that was at any time receivable, directly or indirectly in any manner whatever, by the State or Her Majesty in right of Canada or of a province, other than Québec, in relation to the acquisition, development or ownership of a Canadian resource property or the production in Canada from a mineral resource, a natural accumulation of petroleum or natural gas, or an oil or gas well, except that, where the year includes 31 December 2006,

i.  this paragraph shall be read with “the proportion that the number of days in the year that follow that date is of the number of days in the year, of” inserted before “any amount, other than an amount” in the portion before this subparagraph, and

ii.  this paragraph shall not be taken into account for the purposes of the regulations made under paragraph z.4 or section 145 or 360;

(x)  an amount that, where the taxpayer is an individual who is a member of a partnership or an employee of a member of a partnership and the partnership makes an automobile available in the year to the taxpayer or to a person related to the taxpayer, would be included, by reason of section 41, in computing the taxpayer’s income for the year if the taxpayer were employed by the partnership;

(y)  any amount in respect of an amateur athlete trust required by section 851.35 to be included in computing his income for the year;

(z)  any amount received by the taxpayer in the year as a beneficiary under an environmental trust, whether or not the amount is included because of section 692.1 in computing the taxpayer’s income for any taxation year;

(z.1)  the consideration received by the taxpayer in the year for the disposition to another person or partnership of all or part of the taxpayer’s interest as a beneficiary under an environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust;

(z.2)  any amount required because of section 485.13 to be included in computing the taxpayer’s income for the year;

(z.3)  any amount required because of section 979.21 to be included in computing the taxpayer’s income for the year;

(z.4)  where the year begins before 1 January 2007, 25% of the taxpayer’s resource loss for the year, as determined by regulation, except that, where the year includes that date, that percentage shall be replaced by the percentage obtained by multiplying 25% by the proportion that the number of days in the year that precede that date is of the number of days in the year;

(z.5)  any amount received by the taxpayer in the year in respect of a refund of an amount that was deducted under paragraph u of section 157 in computing the taxpayer’s income for any taxation year;

(z.6)  any amount required by section 935.26.1 or section 207.061 of the Income Tax Act to be included in computing the taxpayer’s income for the year; and

(z.7)  the total of all amounts each of which is

i.  where the taxpayer acquires a property under a derivative forward agreement in the year, the portion of the amount by which the fair market value of the property at the time it is acquired by the taxpayer exceeds the cost to the taxpayer of the property that is attributable to an underlying interest other than an underlying interest referred to in any of subparagraphs i to iii of paragraph b of the definition of “derivative forward agreement” in section 1, or

ii.  where the taxpayer disposes of a property under a derivative forward agreement in the year, the portion of the amount by which the proceeds of disposition, within the meaning of section 251, of the property exceeds the fair market value of the property at the time the agreement is entered into by the taxpayer that is attributable to an underlying interest other than an underlying interest referred to in any of subparagraphs 1 to 3 of subparagraph i of paragraph c of the definition of “derivative forward agreement” in section 1.

1972, c. 23, s. 81; 1973, c. 18, s. 3; 1975, c. 22, s. 7; 1977, c. 26, s. 6; 1978, c. 26, s. 11; 1980, c. 13, s. 6; 1982, c. 5, s. 24; 1984, c. 15, s. 19; 1985, c. 25, s. 24; 1987, c. 67, s. 19; 1988, c. 18, s. 7; 1989, c. 5, s. 34; 1989, c. 77, s. 14; 1990, c. 59, s. 47; 1991, c. 25, s. 20; 1992, c. 1, s. 22; 1994, c. 22, s. 64; 1995, c. 1, s. 21; 1995, c. 49, s. 32; 1995, c. 63, s. 26; 1996, c. 39, s. 27; 1997, c. 3, s. 71; 1997, c. 14, s. 29; 1997, c. 31, s. 11; 1997, c. 85, s. 49; 1998, c. 16, s. 81; 1999, c. 83, s. 30; 2000, c. 5, s. 30; 2001, c. 7, s. 9; 2001, c. 51, s. 23; 2001, c. 53, s. 24; 2003, c. 2, s. 30; 2005, c. 1, s. 29; 2007, c. 12, s. 34; 2009, c. 5, s. 50; 2010, c. 5, s. 19; 2011, c. 6, s. 118; 2015, c. 21, s. 111; 2015, c. 24, s. 25; 2015, c. 36, s. 9; 2017, c. 1, s. 83; 2020, c. 16, s. 33; 2021, c. 14, s. 26; 2021, c. 18, s. 22.

2021-06-02

87. A taxpayer shall include in computing his income from a business or property for a taxation year,

(a)  any amount he receives in the year in the course of a business, even if such amount

i.  is paid him for services not rendered or goods not delivered before the end of the year, or may be regarded as not having been earned in the year or a previous year, or

ii.  is, under an arrangement or understanding, repayable in whole or in part on the return or resale to the taxpayer of articles in or by means of which goods were delivered to a customer;

(b)  any amount receivable in respect of property sold or services rendered in the course of a business in the year, even if that amount or any part thereof is not due until a subsequent year, unless the method adopted for computing his income from the business and accepted for the purposes of this Part does not require him to include, in computing his income for a taxation year, an amount not received in the year and, for the purposes of this paragraph, an amount is deemed to have become receivable in respect of services rendered in the course of a business on a day that is the earlier of the day upon which the account in respect of the services was rendered and the day upon which that account would have been rendered had there been no undue delay;

(c)  subject to sections 92 and 92.1.1, any amount received or receivable by the taxpayer in the year as interest, depending on the method regularly followed by the taxpayer in computing the taxpayer’s income, to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year;

(d)  any amount deducted under section 140 as a reserve in computing his income for the preceding taxation year;

(d.1)  any amount deducted under section 140.2 as a reserve in computing his income for the preceding taxation year;

(e)  any amount deducted in computing his income from a business for the preceding year

i.  under section 150, including any amount substituted under section 151,

ii.  under sections 150.1 and 152, or

iii.  under section 153;

(e.1)  where the taxpayer is an insurer, any amount prescribed in respect of the insurer for the year;

(f)  any amount received or receivable under an insurance policy or otherwise, as compensation for damage to his depreciable property, that he expends for repair of the damage within the year and within a reasonable time after the damage;

(g)  any amount received by the taxpayer in the year and established in respect of the use of or production from property, even if that amount is an instalment of the sale price of such property, but not including an instalment of the sale price of agricultural land;

(g.1)  any proceeds of disposition in respect of which section 158.6 applies;

(h)  any amount deducted as an allowance for the quadrennial or special inspection of a vessel under section 154 in computing his income for the previous year;

(i)  any amount, other than an amount referred to in paragraph i.1, received in the year on account of a debt or a loan or lending asset in respect of which a deduction for bad debts or uncollectible loans or lending assets had been made in computing his income for a preceding taxation year;

(i.1)  that proportion of 1/2 of the amount received in the year on account of a debt in respect of which a deduction for a bad debt under section 142.1 had been made in computing the taxpayer’s income for a preceding taxation year that the amount deducted under that section in respect of that debt is of the aggregate of the amount so deducted and the amount deemed under section 142.1 or 142.2 to be an allowable capital loss in respect of that debt;

(j)  any amount received by him in the year out of or under an employee trust or a profit sharing plan established for the benefit of employees of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length;

(j.1)  the amount by which the aggregate of amounts received by him in the year out of or under an employee benefit plan to which he has contributed as an employer, other than amounts included in computing his income by virtue of paragraph n, exceeds the amount by which the aggregate of all amounts so contributed by him to the plan, or included in computing his income for any preceding taxation year by virtue of this paragraph, exceeds the aggregate of all amounts deducted by him in respect of his contributions to the plan in computing his income for the year or any preceding taxation year, or received by him out of or under the plan in any preceding taxation year, other than amounts included in computing his income by virtue of paragraph n;

(j.2)  any amount in respect of deferred amounts under a salary deferral arrangement in respect of another person, that was deductible under section 78.2 in computing the income of that other person for a taxation year ending in the year where the deferred amounts have been deducted under paragraph p of section 157 in computing the taxpayer’s income for preceding taxation years;

(j.3)  any amount he must include in computing his income for the year under section 890.11;

(k)  any amount he must include in computing his income for the year under Title IX in respect of a dividend paid by a corporation resident in Canada on a share of its capital stock;

(l)  any amount required by Title X to be included in computing the taxpayer’s income for the year;

(m)  any amount that is, under Title XI, income from a business or property of the taxpayer;

(m.1)  the aggregate of all amounts each of which is an amount determined, in relation to a partnership, in accordance with section 87.0.1;

(n)  any amount he must include in computing his income for the year under Title XII or section 1121.1, except

i.  any amount deemed to be a taxable capital gain of the taxpayer under that Title, and

ii.  any amount paid or payable to the taxpayer out of or under an RCA trust within the meaning assigned by section 890.1;

(o)  any amount received by the taxpayer in the year as a stabilization payment, or as a refund of a levy, under the Western Grain Stabilization Act (R.S.C. 1985, c. W-7) or as a payment, or a refund of a premium, in respect of the gross revenue insurance program established under the Farm Income Protection Act (S.C. 1991, c. 22);

(p)  any prescribed amount deducted by him for the year as employment tax credit;

(q)  any amount that, in respect of a property described in his inventory, at the end of the year, is an allowance in respect of depreciation, obsolescence or depletion included in the cost amount of that property to him at the end of the year;

(r)  (paragraph repealed);

(s)  the amount of any grant received by him in the year under a prescribed program relating to home insulation or energy conversion in respect of a property used by him principally for the purpose of gaining or producing income from a business or property;

(t)  the amount by which the aggregate of amounts determined at the end of the year in respect of him under section 225 exceeds the aggregate of amounts determined at that time in respect of him under sections 222 to 224;

(u)  the prescribed amount deducted in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), to the extent that such amount was not included in computing his income for a preceding taxation year under this paragraph or is not included in an amount determined under subparagraph f of the second paragraph of section 93, section 101 or 225, subparagraph vi of paragraph l of section 257, subparagraph ii of paragraph n of section 257 or paragraph g of section 399;

(v)  (paragraph repealed);

(w)  any particular amount, other than a prescribed amount, received by the taxpayer in the year, in the course of earning income from a business or property, from a government, municipality or other public authority, a person or partnership in this paragraph referred to as the “particular person”, who pays the particular amount in the course of earning income from a business or property, or in order to achieve a benefit for the particular person or for persons with whom the particular person does not deal at arm’s length, or in circumstances where it is reasonable to conclude that the particular person would not have paid the particular amount but for the receipt by the particular person of amounts from another particular person referred to in this paragraph or a government, municipality or public authority, where the particular amount can reasonably be considered to have been received as a refund, reimbursement, contribution or allowance or as assistance, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of assistance, in respect of an amount included in, or deducted as, the cost of property or in respect of an outlay or expense, or as an inducement, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of inducement, to the extent that the particular amount

i.  was not otherwise included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Part, any balance of undeducted outlays, expenses or other amounts, for the year or a preceding taxation year,

ii.  except as provided by any provision of any of Titles III.3 to III.5 of Book V or of Chapter III.1 of Title III of Book IX, does not reduce, for the purposes of this Part, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iii.  does not reduce, pursuant to paragraph f.2 of section 257 or section 87.4 or 101.6, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iv.  may not reasonably be considered to be a payment made in respect of the acquisition by the particular person or the public authority of an interest in the taxpayer, a right in the taxpayer’s business or a real right in the taxpayer’s property, or

v.  is not an amount received by the taxpayer in respect of a restrictive covenant, within the meaning assigned by section 333.4, that was included under section 333.5 in computing the income of a person related to the taxpayer;

(w.1)  where the year ends after 31 December 2006, any amount, other than an amount otherwise included in computing the taxpayer’s income for the year or a preceding taxation year, that was received by the taxpayer, including by way of a deduction from tax, in the year as a refund, reimbursement, contribution or allowance, in respect of an amount that was at any time receivable, directly or indirectly in any manner whatever, by the State or Her Majesty in right of Canada or of a province, other than Québec, in relation to the acquisition, development or ownership of a Canadian resource property or the production in Canada from a mineral resource, a natural accumulation of petroleum or natural gas, or an oil or gas well, except that, where the year includes 31 December 2006,

i.  this paragraph shall be read with “the proportion that the number of days in the year that follow that date is of the number of days in the year, of” inserted before “any amount, other than an amount” in the portion before this subparagraph, and

ii.  this paragraph shall not be taken into account for the purposes of the regulations made under paragraph z.4 or section 145 or 360;

(x)  an amount that, where the taxpayer is an individual who is a member of a partnership or an employee of a member of a partnership and the partnership makes an automobile available in the year to the taxpayer or to a person related to the taxpayer, would be included, by reason of section 41, in computing the taxpayer’s income for the year if the taxpayer were employed by the partnership;

(y)  any amount in respect of an amateur athlete trust required by section 851.35 to be included in computing his income for the year;

(z)  any amount received by the taxpayer in the year as a beneficiary under an environmental trust, whether or not the amount is included because of section 692.1 in computing the taxpayer’s income for any taxation year;

(z.1)  the consideration received by the taxpayer in the year for the disposition to another person or partnership of all or part of the taxpayer’s interest as a beneficiary under an environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust;

(z.2)  any amount required because of section 485.13 to be included in computing the taxpayer’s income for the year;

(z.3)  any amount required because of section 979.21 to be included in computing the taxpayer’s income for the year;

(z.4)  where the year begins before 1 January 2007, 25% of the taxpayer’s resource loss for the year, as determined by regulation, except that, where the year includes that date, that percentage shall be replaced by the percentage obtained by multiplying 25% by the proportion that the number of days in the year that precede that date is of the number of days in the year;

(z.5)  any amount received by the taxpayer in the year in respect of a refund of an amount that was deducted under paragraph u of section 157 in computing the taxpayer’s income for any taxation year;

(z.6)  any amount required by section 935.26.1 or section 207.061 of the Income Tax Act to be included in computing the taxpayer’s income for the year; and

(z.7)  the total of all amounts each of which is

i.  where the taxpayer acquires a property under a derivative forward agreement in the year, the portion of the amount by which the fair market value of the property at the time it is acquired by the taxpayer exceeds the cost to the taxpayer of the property that is attributable to an underlying interest other than an underlying interest referred to in any of subparagraphs i to iii of paragraph b of the definition of “derivative forward agreement” in section 1, or

ii.  where the taxpayer disposes of a property under a derivative forward agreement in the year, the portion of the amount by which the proceeds of disposition, within the meaning of section 251, of the property exceeds the fair market value of the property at the time the agreement is entered into by the taxpayer that is attributable to an underlying interest other than an underlying interest referred to in any of subparagraphs 1 to 3 of subparagraph i of paragraph c of the definition of “derivative forward agreement” in section 1.

1972, c. 23, s. 81; 1973, c. 18, s. 3; 1975, c. 22, s. 7; 1977, c. 26, s. 6; 1978, c. 26, s. 11; 1980, c. 13, s. 6; 1982, c. 5, s. 24; 1984, c. 15, s. 19; 1985, c. 25, s. 24; 1987, c. 67, s. 19; 1988, c. 18, s. 7; 1989, c. 5, s. 34; 1989, c. 77, s. 14; 1990, c. 59, s. 47; 1991, c. 25, s. 20; 1992, c. 1, s. 22; 1994, c. 22, s. 64; 1995, c. 1, s. 21; 1995, c. 49, s. 32; 1995, c. 63, s. 26; 1996, c. 39, s. 27; 1997, c. 3, s. 71; 1997, c. 14, s. 29; 1997, c. 31, s. 11; 1997, c. 85, s. 49; 1998, c. 16, s. 81; 1999, c. 83, s. 30; 2000, c. 5, s. 30; 2001, c. 7, s. 9; 2001, c. 51, s. 23; 2001, c. 53, s. 24; 2003, c. 2, s. 30; 2005, c. 1, s. 29; 2007, c. 12, s. 34; 2009, c. 5, s. 50; 2010, c. 5, s. 19; 2011, c. 6, s. 118; 2015, c. 21, s. 111; 2015, c. 24, s. 25; 2015, c. 36, s. 9; 2017, c. 1, s. 83; 2020, c. 16, s. 33; 2021, c. 14, s. 26.

2020-09-24

87. A taxpayer shall include in computing his income from a business or property for a taxation year,

(a)  any amount he receives in the year in the course of a business, even if such amount

i.  is paid him for services not rendered or goods not delivered before the end of the year, or may be regarded as not having been earned in the year or a previous year, or

ii.  is, under an arrangement or understanding, repayable in whole or in part on the return or resale to the taxpayer of articles in or by means of which goods were delivered to a customer;

(b)  any amount receivable in respect of property sold or services rendered in the course of a business in the year, even if that amount or any part thereof is not due until a subsequent year, unless the method adopted for computing his income from the business and accepted for the purposes of this Part does not require him to include, in computing his income for a taxation year, an amount not received in the year and, for the purposes of this paragraph, an amount is deemed to have become receivable in respect of services rendered in the course of a business on a day that is the earlier of the day upon which the account in respect of the services was rendered and the day upon which that account would have been rendered had there been no undue delay;

(c)  subject to sections 92 and 92.1.1, any amount received or receivable by the taxpayer in the year as interest, depending on the method regularly followed by the taxpayer in computing the taxpayer’s income, to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year;

(d)  any amount deducted under section 140 as a reserve in computing his income for the preceding taxation year;

(d.1)  any amount deducted under section 140.2 as a reserve in computing his income for the preceding taxation year;

(e)  any amount deducted in computing his income from a business for the preceding year

i.  under section 150, including any amount substituted under section 151,

ii.  under sections 150.1 and 152, or

iii.  under section 153;

(e.1)  where the taxpayer is an insurer, any amount prescribed in respect of the insurer for the year;

(f)  any amount received or receivable under an insurance policy or otherwise, as compensation for damage to his depreciable property, that he expends for repair of the damage within the year and within a reasonable time after the damage;

(g)  any amount received by the taxpayer in the year and established in respect of the use of or production from property, even if that amount is an instalment of the sale price of such property, but not including an instalment of the sale price of agricultural land;

(g.1)  any proceeds of disposition in respect of which section 158.6 applies;

(h)  any amount deducted as an allowance for the quadrennial or special inspection of a vessel under section 154 in computing his income for the previous year;

(i)  any amount, other than an amount referred to in paragraph i.1, received in the year on account of a debt or a loan or lending asset in respect of which a deduction for bad debts or uncollectible loans or lending assets had been made in computing his income for a preceding taxation year;

(i.1)  that proportion of 1/2 of the amount received in the year on account of a debt in respect of which a deduction for a bad debt under section 142.1 had been made in computing the taxpayer’s income for a preceding taxation year that the amount deducted under that section in respect of that debt is of the aggregate of the amount so deducted and the amount deemed under section 142.1 or 142.2 to be an allowable capital loss in respect of that debt;

(j)  any amount received by him in the year out of or under an employee trust or a profit sharing plan established for the benefit of employees of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length;

(j.1)  the amount by which the aggregate of amounts received by him in the year out of or under an employee benefit plan to which he has contributed as an employer, other than amounts included in computing his income by virtue of paragraph n, exceeds the amount by which the aggregate of all amounts so contributed by him to the plan, or included in computing his income for any preceding taxation year by virtue of this paragraph, exceeds the aggregate of all amounts deducted by him in respect of his contributions to the plan in computing his income for the year or any preceding taxation year, or received by him out of or under the plan in any preceding taxation year, other than amounts included in computing his income by virtue of paragraph n;

(j.2)  any amount in respect of deferred amounts under a salary deferral arrangement in respect of another person, that was deductible under section 78.2 in computing the income of that other person for a taxation year ending in the year where the deferred amounts have been deducted under paragraph p of section 157 in computing the taxpayer’s income for preceding taxation years;

(j.3)  any amount he must include in computing his income for the year under section 890.11;

(k)  any amount he must include in computing his income for the year under Title IX in respect of a dividend paid by a corporation resident in Canada on a share of its capital stock;

(l)  any amount required by Title X to be included in computing the taxpayer’s income for the year;

(m)  any amount that is, under Title XI, income from a business or property of the taxpayer;

(m.1)  the aggregate of all amounts each of which is an amount determined, in relation to a partnership, in accordance with section 87.0.1;

(n)  any amount he must include in computing his income for the year under Title XII or section 1121.1, except

i.  any amount deemed to be a taxable capital gain of the taxpayer under that Title, and

ii.  any amount paid or payable to the taxpayer out of or under an RCA trust within the meaning assigned by section 890.1;

(o)  any amount received by the taxpayer in the year as a stabilization payment, or as a refund of a levy, under the Western Grain Stabilization Act (R.S.C. 1985, c. W-7) or as a payment, or a refund of a premium, in respect of the gross revenue insurance program established under the Farm Income Protection Act (S.C. 1991, c. 22);

(p)  any prescribed amount deducted by him for the year as employment tax credit;

(q)  any amount that, in respect of a property described in his inventory, at the end of the year, is an allowance in respect of depreciation, obsolescence or depletion included in the cost amount of that property to him at the end of the year;

(r)  (paragraph repealed);

(s)  the amount of any grant received by him in the year under a prescribed program relating to home insulation or energy conversion in respect of a property used by him principally for the purpose of gaining or producing income from a business or property;

(t)  the amount by which the aggregate of amounts determined at the end of the year in respect of him under section 225 exceeds the aggregate of amounts determined at that time in respect of him under sections 222 to 224;

(u)  the prescribed amount deducted in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), to the extent that such amount was not included in computing his income for a preceding taxation year under this paragraph or is not included in an amount determined under subparagraph f of the second paragraph of section 93, section 101 or 225, subparagraph vi of paragraph l of section 257, subparagraph ii of paragraph n of section 257 or paragraph g of section 399;

(v)  (paragraph repealed);

(w)  any particular amount, other than a prescribed amount, received by the taxpayer in the year, in the course of earning income from a business or property, from a government, municipality or other public authority, a person or partnership in this paragraph referred to as the “particular person”, who pays the particular amount in the course of earning income from a business or property, or in order to achieve a benefit for the particular person or for persons with whom the particular person does not deal at arm’s length, or in circumstances where it is reasonable to conclude that the particular person would not have paid the particular amount but for the receipt by the particular person of amounts from another particular person referred to in this paragraph or a government, municipality or public authority, where the particular amount can reasonably be considered to have been received as a refund, reimbursement, contribution or allowance or as assistance, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of assistance, in respect of an amount included in, or deducted as, the cost of property or in respect of an outlay or expense, or as an inducement, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of inducement, to the extent that the particular amount

i.  was not otherwise included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Part, any balance of undeducted outlays, expenses or other amounts, for the year or a preceding taxation year,

ii.  except as provided by any provision of any of Titles III.3 to III.5 of Book V or of Chapter III.1 of Title III of Book IX, does not reduce, for the purposes of this Part, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iii.  does not reduce, pursuant to paragraph f.2 of section 257 or section 87.4 or 101.6, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iv.  may not reasonably be considered to be a payment made in respect of the acquisition by the particular person or the public authority of an interest in the taxpayer, a right in the taxpayer’s business or a real right in the taxpayer’s property, or

v.  is not an amount received by the taxpayer in respect of a restrictive covenant, within the meaning assigned by section 333.4, that was included under section 333.5 in computing the income of a person related to the taxpayer;

(w.1)  where the year ends after 31 December 2006, any amount, other than an amount otherwise included in computing the taxpayer’s income for the year or a preceding taxation year, that was received by the taxpayer, including by way of a deduction from tax, in the year as a refund, reimbursement, contribution or allowance, in respect of an amount that was at any time receivable, directly or indirectly in any manner whatever, by the State or Her Majesty in right of Canada or of a province, other than Québec, in relation to the acquisition, development or ownership of a Canadian resource property or the production in Canada from a mineral resource, a natural accumulation of petroleum or natural gas, or an oil or gas well, except that, where the year includes 31 December 2006,

i.  this paragraph shall be read with “the proportion that the number of days in the year that follow that date is of the number of days in the year, of” inserted before “any amount, other than an amount” in the portion before this subparagraph, and

ii.  this paragraph shall not be taken into account for the purposes of the regulations made under paragraph z.4 or section 145 or 360;

(x)  an amount that, where the taxpayer is an individual who is a member of a partnership or an employee of a member of a partnership and the partnership makes an automobile available in the year to the taxpayer or to a person related to the taxpayer, would be included, by reason of section 41, in computing the taxpayer’s income for the year if the taxpayer were employed by the partnership;

(y)  any amount in respect of an amateur athlete trust required by section 851.35 to be included in computing his income for the year;

(z)  any amount received by the taxpayer in the year as a beneficiary under an environmental trust, whether or not the amount is included because of section 692.1 in computing the taxpayer’s income for any taxation year;

(z.1)  the consideration received by the taxpayer in the year for the disposition to another person or partnership of all or part of the taxpayer’s interest as a beneficiary under an environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust;

(z.2)  any amount required because of section 485.13 to be included in computing the taxpayer’s income for the year;

(z.3)  any amount required because of section 979.21 to be included in computing the taxpayer’s income for the year;

(z.4)  where the year begins before 1 January 2007, 25% of the taxpayer’s resource loss for the year, as determined by regulation, except that, where the year includes that date, that percentage shall be replaced by the percentage obtained by multiplying 25% by the proportion that the number of days in the year that precede that date is of the number of days in the year;

(z.5)  any amount received by the taxpayer in the year in respect of a refund of an amount that was deducted under paragraph u of section 157 in computing the taxpayer’s income for any taxation year;

(z.6)  any amount required by section 935.26.1 or section 207.061 of the Income Tax Act to be included in computing the taxpayer’s income for the year; and

(z.7)  the total of all amounts each of which is

i.  if the taxpayer acquires a property under a derivative forward agreement in the year, the amount by which the fair market value of the property at the time it is acquired by the taxpayer exceeds the cost to the taxpayer of the property, or

ii.  if the taxpayer disposes of a property under a derivative forward agreement in the year, the amount by which the proceeds of disposition, within the meaning of section 251, of the property exceeds the fair market value of the property at the time the agreement is entered into by the taxpayer.

1972, c. 23, s. 81; 1973, c. 18, s. 3; 1975, c. 22, s. 7; 1977, c. 26, s. 6; 1978, c. 26, s. 11; 1980, c. 13, s. 6; 1982, c. 5, s. 24; 1984, c. 15, s. 19; 1985, c. 25, s. 24; 1987, c. 67, s. 19; 1988, c. 18, s. 7; 1989, c. 5, s. 34; 1989, c. 77, s. 14; 1990, c. 59, s. 47; 1991, c. 25, s. 20; 1992, c. 1, s. 22; 1994, c. 22, s. 64; 1995, c. 1, s. 21; 1995, c. 49, s. 32; 1995, c. 63, s. 26; 1996, c. 39, s. 27; 1997, c. 3, s. 71; 1997, c. 14, s. 29; 1997, c. 31, s. 11; 1997, c. 85, s. 49; 1998, c. 16, s. 81; 1999, c. 83, s. 30; 2000, c. 5, s. 30; 2001, c. 7, s. 9; 2001, c. 51, s. 23; 2001, c. 53, s. 24; 2003, c. 2, s. 30; 2005, c. 1, s. 29; 2007, c. 12, s. 34; 2009, c. 5, s. 50; 2010, c. 5, s. 19; 2011, c. 6, s. 118; 2015, c. 21, s. 111; 2015, c. 24, s. 25; 2015, c. 36, s. 9; 2017, c. 1, s. 83; 2020, c. 16, s. 33.

2017-02-08

87. A taxpayer shall include in computing his income from a business or property for a taxation year,

(a)  any amount he receives in the year in the course of a business, even if such amount

i.  is paid him for services not rendered or goods not delivered before the end of the year, or may be regarded as not having been earned in the year or a previous year, or

ii.  is, under an arrangement or understanding, repayable in whole or in part on the return or resale to the taxpayer of articles in or by means of which goods were delivered to a customer;

(b)  any amount receivable in respect of property sold or services rendered in the course of a business in the year, even if that amount or any part thereof is not due until a subsequent year, unless the method adopted for computing his income from the business and accepted for the purposes of this Part does not require him to include, in computing his income for a taxation year, an amount not received in the year and, for the purposes of this paragraph, an amount is deemed to have become receivable in respect of services rendered in the course of a business on a day that is the earlier of the day upon which the account in respect of the services was rendered and the day upon which that account would have been rendered had there been no undue delay;

(c)  subject to sections 92 and 92.1.1, any amount received or receivable by the taxpayer in the year as interest, depending on the method regularly followed by the taxpayer in computing the taxpayer’s income, to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year;

(d)  any amount deducted under section 140 as a reserve in computing his income for the preceding taxation year;

(d.1)  any amount deducted under section 140.2 as a reserve in computing his income for the preceding taxation year;

(e)  any amount deducted in computing his income from a business for the preceding year

i.  under section 150, including any amount substituted under section 151,

ii.  under sections 150.1 and 152, or

iii.  under section 153;

(e.1)  where the taxpayer is an insurer, any amount prescribed in respect of the insurer for the year;

(f)  any amount received or receivable under an insurance policy or otherwise, as compensation for damage to his depreciable property, that he expends for repair of the damage within the year and within a reasonable time after the damage;

(g)  any amount received by the taxpayer in the year and established in respect of the use of or production from property, even if that amount is an instalment of the sale price of such property, but not including an instalment of the sale price of agricultural land;

(g.1)  any proceeds of disposition in respect of which section 158.6 applies;

(h)  any amount deducted as an allowance for the quadrennial or special inspection of a vessel under section 154 in computing his income for the previous year;

(i)  any amount, other than an amount referred to in paragraph i.1, received in the year on account of a debt or a loan or lending asset in respect of which a deduction for bad debts or uncollectible loans or lending assets had been made in computing his income for a preceding taxation year;

(i.1)  that proportion of 1/2 of the amount received in the year on account of a debt in respect of which a deduction for a bad debt under section 142.1 had been made in computing the taxpayer’s income for a preceding taxation year that the amount deducted under that section in respect of that debt is of the aggregate of the amount so deducted and the amount deemed under section 142.1 or 142.2 to be an allowable capital loss in respect of that debt;

(j)  any amount received by him in the year out of or under an employee trust or a profit sharing plan established for the benefit of employees of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length;

(j.1)  the amount by which the aggregate of amounts received by him in the year out of or under an employee benefit plan to which he has contributed as an employer, other than amounts included in computing his income by virtue of paragraph n, exceeds the amount by which the aggregate of all amounts so contributed by him to the plan, or included in computing his income for any preceding taxation year by virtue of this paragraph, exceeds the aggregate of all amounts deducted by him in respect of his contributions to the plan in computing his income for the year or any preceding taxation year, or received by him out of or under the plan in any preceding taxation year, other than amounts included in computing his income by virtue of paragraph n;

(j.2)  any amount in respect of deferred amounts under a salary deferral arrangement in respect of another person, that was deductible under section 78.2 in computing the income of that other person for a taxation year ending in the year where the deferred amounts have been deducted under paragraph p of section 157 in computing the taxpayer’s income for preceding taxation years;

(j.3)  any amount he must include in computing his income for the year under section 890.11;

(k)  any amount he must include in computing his income for the year under Title IX in respect of a dividend paid by a corporation resident in Canada on a share of its capital stock;

(l)  any amount required by Title X to be included in computing the taxpayer’s income for the year;

(m)  any amount that is, under Title XI, income from a business or property of the taxpayer;

(m.1)  the aggregate of all amounts each of which is an amount determined, in relation to a partnership, in accordance with section 87.0.1;

(n)  any amount he must include in computing his income for the year under Title XII or section 1121.1, except

i.  any amount deemed to be a taxable capital gain of the taxpayer under that Title, and

ii.  any amount paid or payable to the taxpayer out of or under an RCA trust within the meaning assigned by section 890.1;

(o)  any amount received by the taxpayer in the year as a stabilization payment, or as a refund of a levy, under the Western Grain Stabilization Act (R.S.C. 1985, c. W-7) or as a payment, or a refund of a premium, in respect of the gross revenue insurance program established under the Farm Income Protection Act (S.C. 1991, c. 22);

(p)  any prescribed amount deducted by him for the year as employment tax credit;

(q)  any amount that, in respect of a property described in his inventory, at the end of the year, is an allowance in respect of depreciation, obsolescence or depletion included in the cost amount of that property to him at the end of the year;

(r)  (paragraph repealed);

(s)  the amount of any grant received by him in the year under a prescribed program relating to home insulation or energy conversion in respect of a property used by him principally for the purpose of gaining or producing income from a business or property;

(t)  the amount by which the aggregate of amounts determined at the end of the year in respect of him under section 225 exceeds the aggregate of amounts determined at that time in respect of him under sections 222 to 224;

(u)  the prescribed amount deducted in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), to the extent that such amount was not included in computing his income for a preceding taxation year under this paragraph or is not included in an amount determined under subparagraph f of the second paragraph of section 93, section 101 or 225, subparagraph vi of paragraph l of section 257, subparagraph ii of paragraph n of section 257 or paragraph g of section 399;

(v)  (paragraph repealed);

(w)  any particular amount, other than a prescribed amount, received by the taxpayer in the year, in the course of earning income from a business or property, from a government, municipality or other public authority, a person or partnership in this paragraph referred to as the “particular person”, who pays the particular amount in the course of earning income from a business or property, or in order to achieve a benefit for the particular person or for persons with whom the particular person does not deal at arm’s length, or in circumstances where it is reasonable to conclude that the particular person would not have paid the particular amount but for the receipt by the particular person of amounts from another particular person referred to in this paragraph or a government, municipality or public authority, where the particular amount can reasonably be considered to have been received as a refund, reimbursement, contribution or allowance or as assistance, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of assistance, in respect of an amount included in, or deducted as, the cost of property or in respect of an outlay or expense, or as an inducement, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of inducement, to the extent that the particular amount

i.  was not otherwise included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Part, any balance of undeducted outlays, expenses or other amounts, for the year or a preceding taxation year,

ii.  except as provided by any provision of any of Titles III.3 to III.5 of Book V or of Chapter III.1 of Title III of Book IX, does not reduce, for the purposes of this Part, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iii.  does not reduce, pursuant to paragraph f.2 of section 257 or section 87.4 or 101.6, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iv.  may not reasonably be considered to be a payment made in respect of the acquisition by the particular person or the public authority of an interest in the taxpayer or the taxpayer’s business or property, or

v.  is not an amount received by the taxpayer in respect of a restrictive covenant, within the meaning assigned by section 333.4, that was included under section 333.5 in computing the income of a person related to the taxpayer;

(w.1)  where the year ends after 31 December 2006, any amount, other than an amount otherwise included in computing the taxpayer’s income for the year or a preceding taxation year, that was received by the taxpayer, including by way of a deduction from tax, in the year as a refund, reimbursement, contribution or allowance, in respect of an amount that was at any time receivable, directly or indirectly in any manner whatever, by the State or Her Majesty in right of Canada or of a province, other than Québec, in relation to the acquisition, development or ownership of a Canadian resource property or the production in Canada from a mineral resource, a natural accumulation of petroleum or natural gas, or an oil or gas well, except that, where the year includes 31 December 2006,

i.  this paragraph shall be read with “the proportion that the number of days in the year that follow that date is of the number of days in the year, of” inserted before “any amount, other than an amount” in the portion before this subparagraph, and

ii.  this paragraph shall not be taken into account for the purposes of the regulations made under paragraph z.4 or section 145 or 360;

(x)  an amount that, where the taxpayer is an individual who is a member of a partnership or an employee of a member of a partnership and the partnership makes an automobile available in the year to the taxpayer or to a person related to the taxpayer, would be included, by reason of section 41, in computing the taxpayer’s income for the year if the taxpayer were employed by the partnership;

(y)  any amount in respect of an amateur athlete trust required by section 851.35 to be included in computing his income for the year;

(z)  any amount received by the taxpayer in the year as a beneficiary under an environmental trust, whether or not the amount is included because of section 692.1 in computing the taxpayer’s income for any taxation year;

(z.1)  the consideration received by the taxpayer in the year for the disposition to another person or partnership of all or part of the taxpayer’s interest as a beneficiary under an environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust;

(z.2)  any amount required because of section 485.13 to be included in computing the taxpayer’s income for the year;

(z.3)  any amount required because of section 979.21 to be included in computing the taxpayer’s income for the year;

(z.4)  where the year begins before 1 January 2007, 25% of the taxpayer’s resource loss for the year, as determined by regulation, except that, where the year includes that date, that percentage shall be replaced by the percentage obtained by multiplying 25% by the proportion that the number of days in the year that precede that date is of the number of days in the year;

(z.5)  any amount received by the taxpayer in the year in respect of a refund of an amount that was deducted under paragraph u of section 157 in computing the taxpayer’s income for any taxation year;

(z.6)  any amount required by section 935.26.1 or section 207.061 of the Income Tax Act to be included in computing the taxpayer’s income for the year; and

(z.7)  the total of all amounts each of which is

i.  if the taxpayer acquires a property under a derivative forward agreement in the year, the amount by which the fair market value of the property at the time it is acquired by the taxpayer exceeds the cost to the taxpayer of the property, or

ii.  if the taxpayer disposes of a property under a derivative forward agreement in the year, the amount by which the proceeds of disposition, within the meaning of section 251, of the property exceeds the fair market value of the property at the time the agreement is entered into by the taxpayer.

1972, c. 23, s. 81; 1973, c. 18, s. 3; 1975, c. 22, s. 7; 1977, c. 26, s. 6; 1978, c. 26, s. 11; 1980, c. 13, s. 6; 1982, c. 5, s. 24; 1984, c. 15, s. 19; 1985, c. 25, s. 24; 1987, c. 67, s. 19; 1988, c. 18, s. 7; 1989, c. 5, s. 34; 1989, c. 77, s. 14; 1990, c. 59, s. 47; 1991, c. 25, s. 20; 1992, c. 1, s. 22; 1994, c. 22, s. 64; 1995, c. 1, s. 21; 1995, c. 49, s. 32; 1995, c. 63, s. 26; 1996, c. 39, s. 27; 1997, c. 3, s. 71; 1997, c. 14, s. 29; 1997, c. 31, s. 11; 1997, c. 85, s. 49; 1998, c. 16, s. 81; 1999, c. 83, s. 30; 2000, c. 5, s. 30; 2001, c. 7, s. 9; 2001, c. 51, s. 23; 2001, c. 53, s. 24; 2003, c. 2, s. 30; 2005, c. 1, s. 29; 2007, c. 12, s. 34; 2009, c. 5, s. 50; 2010, c. 5, s. 19; 2011, c. 6, s. 118; 2015, c. 21, s. 111; 2015, c. 24, s. 25; 2015, c. 36, s. 9; 2017, c. 1, s. 83.

2015-12-04

87. A taxpayer shall include in computing his income from a business or property for a taxation year,

(a)  any amount he receives in the year in the course of a business, even if such amount

i.  is paid him for services not rendered or goods not delivered before the end of the year, or may be regarded as not having been earned in the year or a previous year, or

ii.  is, under an arrangement or understanding, repayable in whole or in part on the return or resale to the taxpayer of articles in or by means of which goods were delivered to a customer;

(b)  any amount receivable in respect of property sold or services rendered in the course of a business in the year, even if that amount or any part thereof is not due until a subsequent year, unless the method adopted for computing his income from the business and accepted for the purposes of this Part does not require him to include, in computing his income for a taxation year, an amount not received in the year and, for the purposes of this paragraph, an amount is deemed to have become receivable in respect of services rendered in the course of a business on a day that is the earlier of the day upon which the account in respect of the services was rendered and the day upon which that account would have been rendered had there been no undue delay;

(c)  subject to sections 92 and 92.1.1, any amount received or receivable by the taxpayer in the year as interest, depending on the method regularly followed by the taxpayer in computing the taxpayer’s income, to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year;

(d)  any amount deducted under section 140 as a reserve in computing his income for the preceding taxation year;

(d.1)  any amount deducted under section 140.2 as a reserve in computing his income for the preceding taxation year;

(e)  any amount deducted in computing his income from a business for the preceding year

i.  under section 150, including any amount substituted under section 151,

ii.  under sections 150.1 and 152, or

iii.  under section 153;

(e.1)  where the taxpayer is an insurer, any amount prescribed in respect of the insurer for the year;

(f)  any amount received or receivable under an insurance policy or otherwise, as compensation for damage to his depreciable property, that he expends for repair of the damage within the year and within a reasonable time after the damage;

(g)  any amount received by the taxpayer in the year and established in respect of the use of or production from property, even if that amount is an instalment of the sale price of such property, but not including an instalment of the sale price of agricultural land;

(g.1)  any proceeds of disposition in respect of which section 158.6 applies;

(h)  any amount deducted as an allowance for the quadrennial or special inspection of a vessel under section 154 in computing his income for the previous year;

(i)  any amount, other than an amount referred to in paragraph i.1, received in the year on account of a debt or a loan or lending asset in respect of which a deduction for bad debts or uncollectible loans or lending assets had been made in computing his income for a preceding taxation year;

(i.1)  that proportion of 1/2 of the amount received in the year on account of a debt in respect of which a deduction for a bad debt under section 142.1 had been made in computing the taxpayer’s income for a preceding taxation year that the amount deducted under that section in respect of that debt is of the aggregate of the amount so deducted and the amount deemed under section 142.1 or 142.2 to be an allowable capital loss in respect of that debt;

(j)  any amount received by him in the year out of or under an employee trust or a profit sharing plan established for the benefit of employees of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length;

(j.1)  the amount by which the aggregate of amounts received by him in the year out of or under an employee benefit plan to which he has contributed as an employer, other than amounts included in computing his income by virtue of paragraph n, exceeds the amount by which the aggregate of all amounts so contributed by him to the plan, or included in computing his income for any preceding taxation year by virtue of this paragraph, exceeds the aggregate of all amounts deducted by him in respect of his contributions to the plan in computing his income for the year or any preceding taxation year, or received by him out of or under the plan in any preceding taxation year, other than amounts included in computing his income by virtue of paragraph n;

(j.2)  any amount in respect of deferred amounts under a salary deferral arrangement in respect of another person, that was deductible under section 78.2 in computing the income of that other person for a taxation year ending in the year where the deferred amounts have been deducted under paragraph p of section 157 in computing the taxpayer’s income for preceding taxation years;

(j.3)  any amount he must include in computing his income for the year under section 890.11;

(k)  any amount he must include in computing his income for the year under Title IX in respect of a dividend paid by a corporation resident in Canada on a share of its capital stock;

(l)  any amount required by Title X to be included in computing the taxpayer’s income for the year;

(m)  any amount that is, under Title XI, income from a business or property of the taxpayer;

(m.1)  the aggregate of all amounts each of which is an amount determined, in relation to a partnership, in accordance with section 87.0.1;

(n)  any amount he must include in computing his income for the year under Title XII or section 1121.1, except

i.  any amount deemed to be a taxable capital gain of the taxpayer under that Title, and

ii.  any amount paid or payable to the taxpayer out of or under an RCA trust within the meaning assigned by section 890.1;

(o)  any amount received by the taxpayer in the year as a stabilization payment, or as a refund of a levy, under the Western Grain Stabilization Act (R.S.C. 1985, c. W-7) or as a payment, or a refund of a premium, in respect of the gross revenue insurance program established under the Farm Income Protection Act (S.C. 1991, c. 22);

(p)  any prescribed amount deducted by him for the year as employment tax credit;

(q)  any amount that, in respect of a property described in his inventory, at the end of the year, is an allowance in respect of depreciation, obsolescence or depletion included in the cost amount of that property to him at the end of the year;

(r)  (paragraph repealed);

(s)  the amount of any grant received by him in the year under a prescribed program relating to home insulation or energy conversion in respect of a property used by him principally for the purpose of gaining or producing income from a business or property;

(t)  the amount by which the aggregate of amounts determined at the end of the year in respect of him under section 225 exceeds the aggregate of amounts determined at that time in respect of him under sections 222 to 224;

(u)  the prescribed amount deducted in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), to the extent that such amount was not included in computing his income for a preceding taxation year under this paragraph or is not included in an amount determined under subparagraph f of the second paragraph of section 93, section 101 or 225, subparagraph vi of paragraph l of section 257, subparagraph ii of paragraph n of section 257 or paragraph g of section 399;

(v)  (paragraph repealed);

(w)  any particular amount, other than a prescribed amount, received by the taxpayer in the year, in the course of earning income from a business or property, from a government, municipality or other public authority, a person or partnership in this paragraph referred to as the “particular person”, who pays the particular amount in the course of earning income from a business or property, or in order to achieve a benefit for the particular person or for persons with whom the particular person does not deal at arm’s length, or in circumstances where it is reasonable to conclude that the particular person would not have paid the particular amount but for the receipt by the particular person of amounts from another particular person referred to in this paragraph or a government, municipality or public authority, where the particular amount can reasonably be considered to have been received as a refund, reimbursement, contribution or allowance or as assistance, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of assistance, in respect of an amount included in, or deducted as, the cost of property or in respect of an outlay or expense, or as an inducement, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of inducement, to the extent that the particular amount

i.  was not otherwise included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Part, any balance of undeducted outlays, expenses or other amounts, for the year or a preceding taxation year,

ii.  except as provided by any provision of Title III.3 or III.4 of Book V or of Chapter III.1 of Title III of Book IX, does not reduce, for the purposes of this Part, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iii.  does not reduce, pursuant to paragraph f.2 of section 257 or section 87.4 or 101.6, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iv.  may not reasonably be considered to be a payment made in respect of the acquisition by the particular person or the public authority of an interest in the taxpayer or the taxpayer’s business or property, or

v.  is not an amount received by the taxpayer in respect of a restrictive covenant, within the meaning assigned by section 333.4, that was included under section 333.5 in computing the income of a person related to the taxpayer;

(w.1)  where the year ends after 31 December 2006, any amount, other than an amount otherwise included in computing the taxpayer’s income for the year or a preceding taxation year, that was received by the taxpayer, including by way of a deduction from tax, in the year as a refund, reimbursement, contribution or allowance, in respect of an amount that was at any time receivable, directly or indirectly in any manner whatever, by the State or Her Majesty in right of Canada or of a province, other than Québec, in relation to the acquisition, development or ownership of a Canadian resource property or the production in Canada from a mineral resource, a natural accumulation of petroleum or natural gas, or an oil or gas well, except that, where the year includes 31 December 2006,

i.  this paragraph shall be read with “the proportion that the number of days in the year that follow that date is of the number of days in the year, of” inserted before “any amount, other than an amount” in the portion before this subparagraph, and

ii.  this paragraph shall not be taken into account for the purposes of the regulations made under paragraph z.4 or section 145 or 360;

(x)  an amount that, where the taxpayer is an individual who is a member of a partnership or an employee of a member of a partnership and the partnership makes an automobile available in the year to the taxpayer or to a person related to the taxpayer, would be included, by reason of section 41, in computing the taxpayer’s income for the year if the taxpayer were employed by the partnership;

(y)  any amount in respect of an amateur athlete trust required by section 851.35 to be included in computing his income for the year;

(z)  any amount received by the taxpayer in the year as a beneficiary under an environmental trust, whether or not the amount is included because of section 692.1 in computing the taxpayer’s income for any taxation year;

(z.1)  the consideration received by the taxpayer in the year for the disposition to another person or partnership of all or part of the taxpayer’s interest as a beneficiary under an environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust;

(z.2)  any amount required because of section 485.13 to be included in computing the taxpayer’s income for the year;

(z.3)  any amount required because of section 979.21 to be included in computing the taxpayer’s income for the year;

(z.4)  where the year begins before 1 January 2007, 25% of the taxpayer’s resource loss for the year, as determined by regulation, except that, where the year includes that date, that percentage shall be replaced by the percentage obtained by multiplying 25% by the proportion that the number of days in the year that precede that date is of the number of days in the year;

(z.5)  any amount received by the taxpayer in the year in respect of a refund of an amount that was deducted under paragraph u of section 157 in computing the taxpayer’s income for any taxation year;

(z.6)  any amount required by section 935.26.1 or section 207.061 of the Income Tax Act to be included in computing the taxpayer’s income for the year; and

(z.7)  the total of all amounts each of which is

i.  if the taxpayer acquires a property under a derivative forward agreement in the year, the amount by which the fair market value of the property at the time it is acquired by the taxpayer exceeds the cost to the taxpayer of the property, or

ii.  if the taxpayer disposes of a property under a derivative forward agreement in the year, the amount by which the proceeds of disposition, within the meaning of section 251, of the property exceeds the fair market value of the property at the time the agreement is entered into by the taxpayer.

1972, c. 23, s. 81; 1973, c. 18, s. 3; 1975, c. 22, s. 7; 1977, c. 26, s. 6; 1978, c. 26, s. 11; 1980, c. 13, s. 6; 1982, c. 5, s. 24; 1984, c. 15, s. 19; 1985, c. 25, s. 24; 1987, c. 67, s. 19; 1988, c. 18, s. 7; 1989, c. 5, s. 34; 1989, c. 77, s. 14; 1990, c. 59, s. 47; 1991, c. 25, s. 20; 1992, c. 1, s. 22; 1994, c. 22, s. 64; 1995, c. 1, s. 21; 1995, c. 49, s. 32; 1995, c. 63, s. 26; 1996, c. 39, s. 27; 1997, c. 3, s. 71; 1997, c. 14, s. 29; 1997, c. 31, s. 11; 1997, c. 85, s. 49; 1998, c. 16, s. 81; 1999, c. 83, s. 30; 2000, c. 5, s. 30; 2001, c. 7, s. 9; 2001, c. 51, s. 23; 2001, c. 53, s. 24; 2003, c. 2, s. 30; 2005, c. 1, s. 29; 2007, c. 12, s. 34; 2009, c. 5, s. 50; 2010, c. 5, s. 19; 2011, c. 6, s. 118; 2015, c. 21, s. 111; 2015, c. 24, s. 25; 2015, c. 36, s. 9.

2015-10-26

87. A taxpayer shall include in computing his income from a business or property for a taxation year,

(a)  any amount he receives in the year in the course of a business, even if such amount

i.  is paid him for services not rendered or goods not delivered before the end of the year, or may be regarded as not having been earned in the year or a previous year, or

ii.  is, under an arrangement or understanding, repayable in whole or in part on the return or resale to the taxpayer of articles in or by means of which goods were delivered to a customer;

(b)  any amount receivable in respect of property sold or services rendered in the course of a business in the year, even if that amount or any part thereof is not due until a subsequent year, unless the method adopted for computing his income from the business and accepted for the purposes of this Part does not require him to include, in computing his income for a taxation year, an amount not received in the year and, for the purposes of this paragraph, an amount is deemed to have become receivable in respect of services rendered in the course of a business on a day that is the earlier of the day upon which the account in respect of the services was rendered and the day upon which that account would have been rendered had there been no undue delay;

(c)  subject to sections 92 and 92.1.1, any amount received or receivable by the taxpayer in the year as interest, depending on the method regularly followed by the taxpayer in computing the taxpayer’s income, to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year;

(d)  any amount deducted under section 140 as a reserve in computing his income for the preceding taxation year;

(d.1)  any amount deducted under section 140.2 as a reserve in computing his income for the preceding taxation year;

(e)  any amount deducted in computing his income from a business for the preceding year

i.  under section 150, including any amount substituted under section 151,

ii.  under sections 150.1 and 152, or

iii.  under section 153;

(e.1)  where the taxpayer is an insurer, any amount prescribed in respect of the insurer for the year;

(f)  any amount received or receivable under an insurance policy or otherwise, as compensation for damage to his depreciable property, that he expends for repair of the damage within the year and within a reasonable time after the damage;

(g)  any amount received by the taxpayer in the year and established in respect of the use of or production from property, even if that amount is an instalment of the sale price of such property, but not including an instalment of the sale price of agricultural land;

(g.1)  any proceeds of disposition in respect of which section 158.6 applies;

(h)  any amount deducted as an allowance for the quadrennial or special inspection of a vessel under section 154 in computing his income for the previous year;

(i)  any amount, other than an amount referred to in paragraph i.1, received in the year on account of a debt or a loan or lending asset in respect of which a deduction for bad debts or uncollectible loans or lending assets had been made in computing his income for a preceding taxation year;

(i.1)  that proportion of 1/2 of the amount received in the year on account of a debt in respect of which a deduction for a bad debt under section 142.1 had been made in computing the taxpayer’s income for a preceding taxation year that the amount deducted under that section in respect of that debt is of the aggregate of the amount so deducted and the amount deemed under section 142.1 or 142.2 to be an allowable capital loss in respect of that debt;

(j)  any amount received by him in the year out of or under an employee trust or a profit sharing plan established for the benefit of employees of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length;

(j.1)  the amount by which the aggregate of amounts received by him in the year out of or under an employee benefit plan to which he has contributed as an employer, other than amounts included in computing his income by virtue of paragraph n, exceeds the amount by which the aggregate of all amounts so contributed by him to the plan, or included in computing his income for any preceding taxation year by virtue of this paragraph, exceeds the aggregate of all amounts deducted by him in respect of his contributions to the plan in computing his income for the year or any preceding taxation year, or received by him out of or under the plan in any preceding taxation year, other than amounts included in computing his income by virtue of paragraph n;

(j.2)  any amount in respect of deferred amounts under a salary deferral arrangement in respect of another person, that was deductible under section 78.2 in computing the income of that other person for a taxation year ending in the year where the deferred amounts have been deducted under paragraph p of section 157 in computing the taxpayer’s income for preceding taxation years;

(j.3)  any amount he must include in computing his income for the year under section 890.11;

(k)  any amount he must include in computing his income for the year under Title IX in respect of a dividend paid by a corporation resident in Canada on a share of its capital stock;

(l)  any amount he must include in computing his income for the year under Title X in respect of a dividend paid by a corporation not resident in Canada on a share of its capital stock or in respect of a share he owns of the capital stock of his foreign affiliate;

(m)  any amount that is, under Title XI, income from a business or property of the taxpayer;

(m.1)  the aggregate of all amounts each of which is an amount determined, in relation to a partnership, in accordance with section 87.0.1;

(n)  any amount he must include in computing his income for the year under Title XII or section 1121.1, except

i.  any amount deemed to be a taxable capital gain of the taxpayer under that Title, and

ii.  any amount paid or payable to the taxpayer out of or under an RCA trust within the meaning assigned by section 890.1;

(o)  any amount received by the taxpayer in the year as a stabilization payment, or as a refund of a levy, under the Western Grain Stabilization Act (R.S.C. 1985, c. W-7) or as a payment, or a refund of a premium, in respect of the gross revenue insurance program established under the Farm Income Protection Act (S.C. 1991, c. 22);

(p)  any prescribed amount deducted by him for the year as employment tax credit;

(q)  any amount that, in respect of a property described in his inventory, at the end of the year, is an allowance in respect of depreciation, obsolescence or depletion included in the cost amount of that property to him at the end of the year;

(r)  (paragraph repealed);

(s)  the amount of any grant received by him in the year under a prescribed program relating to home insulation or energy conversion in respect of a property used by him principally for the purpose of gaining or producing income from a business or property;

(t)  the amount by which the aggregate of amounts determined at the end of the year in respect of him under section 225 exceeds the aggregate of amounts determined at that time in respect of him under sections 222 to 224;

(u)  the prescribed amount deducted in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), to the extent that such amount was not included in computing his income for a preceding taxation year under this paragraph or is not included in an amount determined under subparagraph f of the second paragraph of section 93, section 101 or 225, subparagraph vi of paragraph l of section 257, subparagraph ii of paragraph n of section 257 or paragraph g of section 399;

(v)  (paragraph repealed);

(w)  any particular amount, other than a prescribed amount, received by the taxpayer in the year, in the course of earning income from a business or property, from a government, municipality or other public authority, a person or partnership in this paragraph referred to as the “particular person”, who pays the particular amount in the course of earning income from a business or property, or in order to achieve a benefit for the particular person or for persons with whom the particular person does not deal at arm’s length, or in circumstances where it is reasonable to conclude that the particular person would not have paid the particular amount but for the receipt by the particular person of amounts from another particular person referred to in this paragraph or a government, municipality or public authority, where the particular amount can reasonably be considered to have been received as a refund, reimbursement, contribution or allowance or as assistance, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of assistance, in respect of an amount included in, or deducted as, the cost of property or in respect of an outlay or expense, or as an inducement, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of inducement, to the extent that the particular amount

i.  was not otherwise included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Part, any balance of undeducted outlays, expenses or other amounts, for the year or a preceding taxation year,

ii.  except as provided by any provision of Title III.3 of Book V or of Chapter III.1 of Title III of Book IX, does not reduce, for the purposes of this Part, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iii.  does not reduce, pursuant to paragraph f.2 of section 257 or section 87.4 or 101.6, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iv.  may not reasonably be considered to be a payment made in respect of the acquisition by the particular person or the public authority of an interest in the taxpayer or the taxpayer’s business or property, or

v.  is not an amount received by the taxpayer in respect of a restrictive covenant, within the meaning assigned by section 333.4, that was included under section 333.5 in computing the income of a person related to the taxpayer;

(w.1)  where the year ends after 31 December 2006, any amount, other than an amount otherwise included in computing the taxpayer’s income for the year or a preceding taxation year, that was received by the taxpayer, including by way of a deduction from tax, in the year as a refund, reimbursement, contribution or allowance, in respect of an amount that was at any time receivable, directly or indirectly in any manner whatever, by the State or Her Majesty in right of Canada or of a province, other than Québec, in relation to the acquisition, development or ownership of a Canadian resource property or the production in Canada from a mineral resource, a natural accumulation of petroleum or natural gas, or an oil or gas well, except that, where the year includes 31 December 2006,

i.  this paragraph shall be read with “the proportion that the number of days in the year that follow that date is of the number of days in the year, of” inserted before “any amount, other than an amount” in the portion before this subparagraph, and

ii.  this paragraph shall not be taken into account for the purposes of the regulations made under paragraph z.4 or section 145 or 360;

(x)  an amount that, where the taxpayer is an individual who is a member of a partnership or an employee of a member of a partnership and the partnership makes an automobile available in the year to the taxpayer or to a person related to the taxpayer, would be included, by reason of section 41, in computing the taxpayer’s income for the year if the taxpayer were employed by the partnership;

(y)  any amount in respect of an amateur athlete trust required by section 851.35 to be included in computing his income for the year;

(z)  any amount received by the taxpayer in the year as a beneficiary under an environmental trust, whether or not the amount is included because of section 692.1 in computing the taxpayer’s income for any taxation year;

(z.1)  the consideration received by the taxpayer in the year for the disposition to another person or partnership of all or part of the taxpayer’s interest as a beneficiary under an environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust;

(z.2)  any amount required because of section 485.13 to be included in computing the taxpayer’s income for the year;

(z.3)  any amount required because of section 979.21 to be included in computing the taxpayer’s income for the year;

(z.4)  where the year begins before 1 January 2007, 25% of the taxpayer’s resource loss for the year, as determined by regulation, except that, where the year includes that date, that percentage shall be replaced by the percentage obtained by multiplying 25% by the proportion that the number of days in the year that precede that date is of the number of days in the year;

(z.5)  any amount received by the taxpayer in the year in respect of a refund of an amount that was deducted under paragraph u of section 157 in computing the taxpayer’s income for any taxation year;

(z.6)  any amount required by section 935.26.1 or section 207.061 of the Income Tax Act to be included in computing the taxpayer’s income for the year; and

(z.7)  the total of all amounts each of which is

i.  if the taxpayer acquires a property under a derivative forward agreement in the year, the amount by which the fair market value of the property at the time it is acquired by the taxpayer exceeds the cost to the taxpayer of the property, or

ii.  if the taxpayer disposes of a property under a derivative forward agreement in the year, the amount by which the proceeds of disposition, within the meaning of section 251, of the property exceeds the fair market value of the property at the time the agreement is entered into by the taxpayer.

1972, c. 23, s. 81; 1973, c. 18, s. 3; 1975, c. 22, s. 7; 1977, c. 26, s. 6; 1978, c. 26, s. 11; 1980, c. 13, s. 6; 1982, c. 5, s. 24; 1984, c. 15, s. 19; 1985, c. 25, s. 24; 1987, c. 67, s. 19; 1988, c. 18, s. 7; 1989, c. 5, s. 34; 1989, c. 77, s. 14; 1990, c. 59, s. 47; 1991, c. 25, s. 20; 1992, c. 1, s. 22; 1994, c. 22, s. 64; 1995, c. 1, s. 21; 1995, c. 49, s. 32; 1995, c. 63, s. 26; 1996, c. 39, s. 27; 1997, c. 3, s. 71; 1997, c. 14, s. 29; 1997, c. 31, s. 11; 1997, c. 85, s. 49; 1998, c. 16, s. 81; 1999, c. 83, s. 30; 2000, c. 5, s. 30; 2001, c. 7, s. 9; 2001, c. 51, s. 23; 2001, c. 53, s. 24; 2003, c. 2, s. 30; 2005, c. 1, s. 29; 2007, c. 12, s. 34; 2009, c. 5, s. 50; 2010, c. 5, s. 19; 2011, c. 6, s. 118; 2015, c. 21, s. 111; 2015, c. 24, s. 25.

2015-10-21

87. A taxpayer shall include in computing his income from a business or property for a taxation year,

(a)  any amount he receives in the year in the course of a business, even if such amount

i.  is paid him for services not rendered or goods not delivered before the end of the year, or may be regarded as not having been earned in the year or a previous year, or

ii.  is, under an arrangement or understanding, repayable in whole or in part on the return or resale to the taxpayer of articles in or by means of which goods were delivered to a customer;

(b)  any amount receivable in respect of property sold or services rendered in the course of a business in the year, even if that amount or any part thereof is not due until a subsequent year, unless the method adopted for computing his income from the business and accepted for the purposes of this Part does not require him to include, in computing his income for a taxation year, an amount not received in the year and, for the purposes of this paragraph, an amount is deemed to have become receivable in respect of services rendered in the course of a business on a day that is the earlier of the day upon which the account in respect of the services was rendered and the day upon which that account would have been rendered had there been no undue delay;

(c)  subject to sections 92 and 92.1.1, any amount received or receivable by the taxpayer in the year as interest, depending on the method regularly followed by the taxpayer in computing the taxpayer’s income, to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year;

(d)  any amount deducted under section 140 as a reserve in computing his income for the preceding taxation year;

(d.1)  any amount deducted under section 140.2 as a reserve in computing his income for the preceding taxation year;

(e)  any amount deducted in computing his income from a business for the preceding year

i.  under section 150, including any amount substituted under section 151,

ii.  under sections 150.1 and 152, or

iii.  under section 153;

(e.1)  where the taxpayer is an insurer, any amount prescribed in respect of the insurer for the year;

(f)  any amount received or receivable under an insurance policy or otherwise, as compensation for damage to his depreciable property, that he expends for repair of the damage within the year and within a reasonable time after the damage;

(g)  any amount received by the taxpayer in the year and established in respect of the use of or production from property, even if that amount is an instalment of the sale price of such property, but not including an instalment of the sale price of agricultural land;

(g.1)  any proceeds of disposition in respect of which section 158.6 applies;

(h)  any amount deducted as an allowance for the quadrennial or special inspection of a vessel under section 154 in computing his income for the previous year;

(i)  any amount, other than an amount referred to in paragraph i.1, received in the year on account of a debt or a loan or lending asset in respect of which a deduction for bad debts or uncollectible loans or lending assets had been made in computing his income for a preceding taxation year;

(i.1)  that proportion of 1/2 of the amount received in the year on account of a debt in respect of which a deduction for a bad debt under section 142.1 had been made in computing the taxpayer’s income for a preceding taxation year that the amount deducted under that section in respect of that debt is of the aggregate of the amount so deducted and the amount deemed under section 142.1 or 142.2 to be an allowable capital loss in respect of that debt;

(j)  any amount received by him in the year out of or under an employee trust or a profit sharing plan established for the benefit of employees of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length;

(j.1)  the amount by which the aggregate of amounts received by him in the year out of or under an employee benefit plan to which he has contributed as an employer, other than amounts included in computing his income by virtue of paragraph n, exceeds the amount by which the aggregate of all amounts so contributed by him to the plan, or included in computing his income for any preceding taxation year by virtue of this paragraph, exceeds the aggregate of all amounts deducted by him in respect of his contributions to the plan in computing his income for the year or any preceding taxation year, or received by him out of or under the plan in any preceding taxation year, other than amounts included in computing his income by virtue of paragraph n;

(j.2)  any amount in respect of deferred amounts under a salary deferral arrangement in respect of another person, that was deductible under section 78.2 in computing the income of that other person for a taxation year ending in the year where the deferred amounts have been deducted under paragraph p of section 157 in computing the taxpayer’s income for preceding taxation years;

(j.3)  any amount he must include in computing his income for the year under section 890.11;

(k)  any amount he must include in computing his income for the year under Title IX in respect of a dividend paid by a corporation resident in Canada on a share of its capital stock;

(l)  any amount he must include in computing his income for the year under Title X in respect of a dividend paid by a corporation not resident in Canada on a share of its capital stock or in respect of a share he owns of the capital stock of his foreign affiliate;

(m)  any amount that is, under Title XI, income from a business or property of the taxpayer;

(m.1)  the aggregate of all amounts each of which is an amount determined, in relation to a partnership, in accordance with section 87.0.1;

(n)  any amount he must include in computing his income for the year under Title XII or section 1121.1, except

i.  any amount deemed to be a taxable capital gain of the taxpayer under that Title, and

ii.  any amount paid or payable to the taxpayer out of or under an RCA trust within the meaning assigned by section 890.1;

(o)  any amount received by the taxpayer in the year as a stabilization payment, or as a refund of a levy, under the Western Grain Stabilization Act (R.S.C. 1985, c. W-7) or as a payment, or a refund of a premium, in respect of the gross revenue insurance program established under the Farm Income Protection Act (S.C. 1991, c. 22);

(p)  any prescribed amount deducted by him for the year as employment tax credit;

(q)  any amount that, in respect of a property described in his inventory, at the end of the year, is an allowance in respect of depreciation, obsolescence or depletion included in the cost amount of that property to him at the end of the year;

(r)  (paragraph repealed);

(s)  the amount of any grant received by him in the year under a prescribed program relating to home insulation or energy conversion in respect of a property used by him principally for the purpose of gaining or producing income from a business or property;

(t)  the amount by which the aggregate of amounts determined at the end of the year in respect of him under section 225 exceeds the aggregate of amounts determined at that time in respect of him under sections 222 to 224;

(u)  the prescribed amount deducted in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), to the extent that such amount was not included in computing his income for a preceding taxation year under this paragraph or is not included in an amount determined under subparagraph f of the second paragraph of section 93, section 101 or 225, subparagraph vi of paragraph l of section 257, subparagraph ii of paragraph n of section 257 or paragraph g of section 399;

(v)  (paragraph repealed);

(w)  any particular amount, other than a prescribed amount, received by the taxpayer in the year, in the course of earning income from a business or property, from a government, municipality or other public authority, a person or partnership in this paragraph referred to as the “particular person”, who pays the particular amount in the course of earning income from a business or property, or in order to achieve a benefit for the particular person or for persons with whom the particular person does not deal at arm’s length, or in circumstances where it is reasonable to conclude that the particular person would not have paid the particular amount but for the receipt by the particular person of amounts from another particular person referred to in this paragraph or a government, municipality or public authority, where the particular amount can reasonably be considered to have been received as a refund, reimbursement, contribution or allowance or as assistance, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of assistance, in respect of an amount included in, or deducted as, the cost of property or in respect of an outlay or expense, or as an inducement, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of inducement, to the extent that the particular amount

i.  was not otherwise included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Part, any balance of undeducted outlays, expenses or other amounts, for the year or a preceding taxation year,

ii.  except as provided by any provision of Title III.3 of Book V or of Chapter III.1 of Title III of Book IX, does not reduce, for the purposes of this Part, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iii.  does not reduce, pursuant to paragraph f.2 of section 257 or section 87.4 or 101.6, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iv.  may not reasonably be considered to be a payment made in respect of the acquisition by the particular person or the public authority of an interest in the taxpayer or the taxpayer’s business or property, or

v.  is not an amount received by the taxpayer in respect of a restrictive covenant, within the meaning assigned by section 333.4, that was included under section 333.5 in computing the income of a person related to the taxpayer;

(w.1)  where the year ends after 31 December 2006, any amount, other than an amount otherwise included in computing the taxpayer’s income for the year or a preceding taxation year, that was received by the taxpayer, including by way of a deduction from tax, in the year as a refund, reimbursement, contribution or allowance, in respect of an amount that was at any time receivable, directly or indirectly in any manner whatever, by the State or Her Majesty in right of Canada or of a province, other than Québec, in relation to the acquisition, development or ownership of a Canadian resource property or the production in Canada from a mineral resource, a natural accumulation of petroleum or natural gas, or an oil or gas well, except that, where the year includes 31 December 2006,

i.  this paragraph shall be read with “the proportion that the number of days in the year that follow that date is of the number of days in the year, of” inserted before “any amount, other than an amount” in the portion before this subparagraph, and

ii.  this paragraph shall not be taken into account for the purposes of the regulations made under paragraph z.4 or section 145 or 360;

(x)  an amount that, where the taxpayer is an individual who is a member of a partnership or an employee of a member of a partnership and the partnership makes an automobile available in the year to the taxpayer or to a person related to the taxpayer, would be included, by reason of section 41, in computing the taxpayer’s income for the year if the taxpayer were employed by the partnership;

(y)  any amount in respect of an amateur athlete trust required by section 851.35 to be included in computing his income for the year;

(z)  any amount received by the taxpayer in the year as a beneficiary under an environmental trust, whether or not the amount is included because of section 692.1 in computing the taxpayer’s income for any taxation year;

(z.1)  the consideration received by the taxpayer in the year for the disposition to another person or partnership of all or part of the taxpayer’s interest as a beneficiary under an environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust;

(z.2)  any amount required because of section 485.13 to be included in computing the taxpayer’s income for the year;

(z.3)  any amount required because of section 979.21 to be included in computing the taxpayer’s income for the year;

(z.4)  where the year begins before 1 January 2007, 25% of the taxpayer’s resource loss for the year, as determined by regulation, except that, where the year includes that date, that percentage shall be replaced by the percentage obtained by multiplying 25% by the proportion that the number of days in the year that precede that date is of the number of days in the year;

(z.5)  any amount received by the taxpayer in the year in respect of a refund of an amount that was deducted under paragraph u of section 157 in computing the taxpayer’s income for any taxation year; and

(z.6)  any amount required by section 935.26.1 or section 207.061 of the Income Tax Act to be included in computing the taxpayer’s income for the year.

1972, c. 23, s. 81; 1973, c. 18, s. 3; 1975, c. 22, s. 7; 1977, c. 26, s. 6; 1978, c. 26, s. 11; 1980, c. 13, s. 6; 1982, c. 5, s. 24; 1984, c. 15, s. 19; 1985, c. 25, s. 24; 1987, c. 67, s. 19; 1988, c. 18, s. 7; 1989, c. 5, s. 34; 1989, c. 77, s. 14; 1990, c. 59, s. 47; 1991, c. 25, s. 20; 1992, c. 1, s. 22; 1994, c. 22, s. 64; 1995, c. 1, s. 21; 1995, c. 49, s. 32; 1995, c. 63, s. 26; 1996, c. 39, s. 27; 1997, c. 3, s. 71; 1997, c. 14, s. 29; 1997, c. 31, s. 11; 1997, c. 85, s. 49; 1998, c. 16, s. 81; 1999, c. 83, s. 30; 2000, c. 5, s. 30; 2001, c. 7, s. 9; 2001, c. 51, s. 23; 2001, c. 53, s. 24; 2003, c. 2, s. 30; 2005, c. 1, s. 29; 2007, c. 12, s. 34; 2009, c. 5, s. 50; 2010, c. 5, s. 19; 2011, c. 6, s. 118; 2015, c. 21, s. 111.

2011-06-06

87. A taxpayer shall include in computing his income from a business or property for a taxation year,

(a)  any amount he receives in the year in the course of a business, even if such amount

i.  is paid him for services not rendered or goods not delivered before the end of the year, or may be regarded as not having been earned in the year or a previous year, or

ii.  is, under an arrangement or understanding, repayable in whole or in part on the return or resale to the taxpayer of articles in or by means of which goods were delivered to a customer;

(b)  any amount receivable in respect of property sold or services rendered in the course of a business in the year, even if that amount or any part thereof is not due until a subsequent year, unless the method adopted for computing his income from the business and accepted for the purposes of this Part does not require him to include, in computing his income for a taxation year, an amount not received in the year and, for the purposes of this paragraph, an amount is deemed to have become receivable in respect of services rendered in the course of a business on a day that is the earlier of the day upon which the account in respect of the services was rendered and the day upon which that account would have been rendered had there been no undue delay;

(c)  subject to sections 92 and 92.1.1, any amount received or receivable by the taxpayer in the year as interest, depending on the method regularly followed by the taxpayer in computing the taxpayer’s income, to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year;

(d)  any amount deducted under section 140 as a reserve in computing his income for the preceding taxation year;

(d.1)  any amount deducted under section 140.2 as a reserve in computing his income for the preceding taxation year;

(e)  any amount deducted in computing his income from a business for the preceding year

i.  under section 150, including any amount substituted under section 151,

ii.  under sections 150.1 and 152, or

iii.  under section 153;

(e.1)  where the taxpayer is an insurer, any amount prescribed in respect of the insurer for the year;

(f)  any amount received or receivable under an insurance policy or otherwise, as compensation for damage to his depreciable property, that he expends for repair of the damage within the year and within a reasonable time after the damage;

(g)  any amount received by the taxpayer in the year and established in respect of the use of or production from property, even if that amount is an instalment of the sale price of such property, but not including an instalment of the sale price of agricultural land;

(g.1)  any proceeds of disposition in respect of which section 158.6 applies;

(h)  any amount deducted as an allowance for the quadrennial or special inspection of a vessel under section 154 in computing his income for the previous year;

(i)  any amount, other than an amount referred to in paragraph i.1, received in the year on account of a debt or a loan or lending asset in respect of which a deduction for bad debts or uncollectible loans or lending assets had been made in computing his income for a preceding taxation year;

(i.1)  that proportion of 1/2 of the amount received in the year on account of a debt in respect of which a deduction for a bad debt under section 142.1 had been made in computing the taxpayer’s income for a preceding taxation year that the amount deducted under that section in respect of that debt is of the aggregate of the amount so deducted and the amount deemed under section 142.1 or 142.2 to be an allowable capital loss in respect of that debt;

(j)  any amount received by him in the year out of or under an employee trust or a profit sharing plan established for the benefit of employees of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length;

(j.1)  the amount by which the aggregate of amounts received by him in the year out of or under an employee benefit plan to which he has contributed as an employer, other than amounts included in computing his income by virtue of paragraph n, exceeds the amount by which the aggregate of all amounts so contributed by him to the plan, or included in computing his income for any preceding taxation year by virtue of this paragraph, exceeds the aggregate of all amounts deducted by him in respect of his contributions to the plan in computing his income for the year or any preceding taxation year, or received by him out of or under the plan in any preceding taxation year, other than amounts included in computing his income by virtue of paragraph n;

(j.2)  any amount in respect of deferred amounts under a salary deferral arrangement in respect of another person, that was deductible under section 78.2 in computing the income of that other person for a taxation year ending in the year where the deferred amounts have been deducted under paragraph p of section 157 in computing the taxpayer’s income for preceding taxation years;

(j.3)  any amount he must include in computing his income for the year under section 890.11;

(k)  any amount he must include in computing his income for the year under Title IX in respect of a dividend paid by a corporation resident in Canada on a share of its capital stock;

(l)  any amount he must include in computing his income for the year under Title X in respect of a dividend paid by a corporation not resident in Canada on a share of its capital stock or in respect of a share he owns of the capital stock of his foreign affiliate;

(m)  any amount that is, under Title XI, income from a business or property of the taxpayer;

(n)  any amount he must include in computing his income for the year under Title XII or section 1121.1, except

i.  any amount deemed to be a taxable capital gain of the taxpayer under that Title, and

ii.  any amount paid or payable to the taxpayer out of or under an RCA trust within the meaning assigned by section 890.1;

(o)  any amount received by the taxpayer in the year as a stabilization payment, or as a refund of a levy, under the Western Grain Stabilization Act (R.S.C. 1985, c. W-7) or as a payment, or a refund of a premium, in respect of the gross revenue insurance program established under the Farm Income Protection Act (S.C. 1991, c. 22);

(p)  any prescribed amount deducted by him for the year as employment tax credit;

(q)  any amount that, in respect of a property described in his inventory, at the end of the year, is an allowance in respect of depreciation, obsolescence or depletion included in the cost amount of that property to him at the end of the year;

(r)  the aggregate of all amounts each of which is the maximum amount that an insurer may claim in the year in respect of a reserve for a reinsurance commission for a policy as allowed by regulations made under the second paragraph of section 152 in respect of a risk the reinsurance of which is assumed by the taxpayer;

(s)  the amount of any grant received by him in the year under a prescribed program relating to home insulation or energy conversion in respect of a property used by him principally for the purpose of gaining or producing income from a business or property;

(t)  the amount by which the aggregate of amounts determined at the end of the year in respect of him under section 225 exceeds the aggregate of amounts determined at that time in respect of him under sections 222 to 224;

(u)  the prescribed amount deducted in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), to the extent that such amount was not included in computing his income for a preceding taxation year under this paragraph or is not included in an amount determined under subparagraph f of the second paragraph of section 93, section 101 or 225, subparagraph vi of paragraph l of section 257, subparagraph ii of paragraph n of section 257 or paragraph g of section 399;

(v)  (paragraph repealed);

(w)  any particular amount, other than a prescribed amount, received by the taxpayer in the year, in the course of earning income from a business or property, from a government, municipality or other public authority, a person or partnership in this paragraph referred to as the “particular person”, who pays the particular amount in the course of earning income from a business or property, or in order to achieve a benefit for the particular person or for persons with whom the particular person does not deal at arm’s length, or in circumstances where it is reasonable to conclude that the particular person would not have paid the particular amount but for the receipt by the particular person of amounts from another particular person referred to in this paragraph or a government, municipality or public authority, where the particular amount can reasonably be considered to have been received as a refund, reimbursement, contribution or allowance or as assistance, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of assistance, in respect of an amount included in, or deducted as, the cost of property or in respect of an outlay or expense, or as an inducement, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of inducement, to the extent that the particular amount

i.  was not otherwise included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Part, any balance of undeducted outlays, expenses or other amounts, for the year or a preceding taxation year,

ii.  except as provided by any provision of Title III.3 of Book V or of Chapter III.1 of Title III of Book IX, does not reduce, for the purposes of this Part, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iii.  does not reduce, pursuant to paragraph f.2 of section 257 or section 87.4 or 101.6, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iv.  may not reasonably be considered to be a payment made in respect of the acquisition by the particular person or the public authority of an interest in the taxpayer or the taxpayer’s business or property, or

v.  is not an amount received by the taxpayer in respect of a restrictive covenant, within the meaning assigned by section 333.4, that was included under section 333.5 in computing the income of a person related to the taxpayer;

(w.1)  where the year ends after 31 December 2006, any amount, other than an amount otherwise included in computing the taxpayer’s income for the year or a preceding taxation year, that was received by the taxpayer, including by way of a deduction from tax, in the year as a refund, reimbursement, contribution or allowance, in respect of an amount that was at any time receivable, directly or indirectly in any manner whatever, by the State or Her Majesty in right of Canada or of a province, other than Québec, in relation to the acquisition, development or ownership of a Canadian resource property or the production in Canada from a mineral resource, a natural accumulation of petroleum or natural gas, or an oil or gas well, except that, where the year includes 31 December 2006,

i.  this paragraph shall be read with “the proportion that the number of days in the year that follow that date is of the number of days in the year, of” inserted before “any amount, other than an amount” in the portion before this subparagraph, and

ii.  this paragraph shall not be taken into account for the purposes of the regulations made under paragraph z.4 or section 145 or 360;

(x)  an amount that, where the taxpayer is an individual who is a member of a partnership or an employee of a member of a partnership and the partnership makes an automobile available in the year to the taxpayer or to a person related to the taxpayer, would be included, by reason of section 41, in computing the taxpayer’s income for the year if the taxpayer were employed by the partnership;

(y)  any amount in respect of an amateur athlete trust required by section 851.35 to be included in computing his income for the year;

(z)  any amount received by the taxpayer in the year as a beneficiary under an environmental trust, whether or not the amount is included because of section 692.1 in computing the taxpayer’s income for any taxation year;

(z.1)  the consideration received by the taxpayer in the year for the disposition to another person or partnership of all or part of the taxpayer’s interest as a beneficiary under an environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust;

(z.2)  any amount required because of section 485.13 to be included in computing the taxpayer’s income for the year;

(z.3)  any amount required because of section 979.21 to be included in computing the taxpayer’s income for the year;

(z.4)  where the year begins before 1 January 2007, 25% of the taxpayer’s resource loss for the year, as determined by regulation, except that, where the year includes that date, that percentage shall be replaced by the percentage obtained by multiplying 25% by the proportion that the number of days in the year that precede that date is of the number of days in the year;

(z.5)  any amount received by the taxpayer in the year in respect of a refund of an amount that was deducted under paragraph u of section 157 in computing the taxpayer’s income for any taxation year; and

(z.6)  any amount required by section 935.26.1 or section 207.061 of the Income Tax Act to be included in computing the taxpayer’s income for the year.

1972, c. 23, s. 81; 1973, c. 18, s. 3; 1975, c. 22, s. 7; 1977, c. 26, s. 6; 1978, c. 26, s. 11; 1980, c. 13, s. 6; 1982, c. 5, s. 24; 1984, c. 15, s. 19; 1985, c. 25, s. 24; 1987, c. 67, s. 19; 1988, c. 18, s. 7; 1989, c. 5, s. 34; 1989, c. 77, s. 14; 1990, c. 59, s. 47; 1991, c. 25, s. 20; 1992, c. 1, s. 22; 1994, c. 22, s. 64; 1995, c. 1, s. 21; 1995, c. 49, s. 32; 1995, c. 63, s. 26; 1996, c. 39, s. 27; 1997, c. 3, s. 71; 1997, c. 14, s. 29; 1997, c. 31, s. 11; 1997, c. 85, s. 49; 1998, c. 16, s. 81; 1999, c. 83, s. 30; 2000, c. 5, s. 30; 2001, c. 7, s. 9; 2001, c. 51, s. 23; 2001, c. 53, s. 24; 2003, c. 2, s. 30; 2005, c. 1, s. 29; 2007, c. 12, s. 34; 2009, c. 5, s. 50; 2010, c. 5, s. 19; 2011, c. 6, s. 118.

2010-04-20

87. A taxpayer shall include in computing his income from a business or property for a taxation year,

(a)  any amount he receives in the year in the course of a business, even if such amount

i.  is paid him for services not rendered or goods not delivered before the end of the year, or may be regarded as not having been earned in the year or a previous year, or

ii.  is, under an arrangement or understanding, repayable in whole or in part on the return or resale to the taxpayer of articles in or by means of which goods were delivered to a customer;

(b)  any amount receivable in respect of property sold or services rendered in the course of a business in the year, even if that amount or any part thereof is not due until a subsequent year, unless the method adopted for computing his income from the business and accepted for the purposes of this Part does not require him to include, in computing his income for a taxation year, an amount not received in the year and, for the purposes of this paragraph, an amount is deemed to have become receivable in respect of services rendered in the course of a business on a day that is the earlier of the day upon which the account in respect of the services was rendered and the day upon which that account would have been rendered had there been no undue delay;

(c)  subject to sections 92 and 92.1.1, any amount received or receivable by the taxpayer in the year as interest, depending on the method regularly followed by the taxpayer in computing the taxpayer’s income, to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year;

(d)  any amount deducted under section 140 as a reserve in computing his income for the preceding taxation year;

(d.1)  any amount deducted under section 140.2 as a reserve in computing his income for the preceding taxation year;

(e)  any amount deducted in computing his income from a business for the preceding year

i.  under section 150, including any amount substituted under section 151,

ii.  under sections 150.1 and 152, or

iii.  under section 153;

(e.1)  where the taxpayer is an insurer, any amount prescribed in respect of the insurer for the year;

(f)  any amount received or receivable under an insurance policy or otherwise, as compensation for damage to his depreciable property, that he expends for repair of the damage within the year and within a reasonable time after the damage;

(g)  any amount received by the taxpayer in the year and established in respect of the use of or production from property, even if that amount is an instalment of the sale price of such property, but not including an instalment of the sale price of agricultural land;

(g.1)  any proceeds of disposition in respect of which section 158.6 applies;

(h)  any amount deducted as an allowance for the quadrennial or special inspection of a vessel under section 154 in computing his income for the previous year;

(i)  any amount, other than an amount referred to in paragraph i.1, received in the year on account of a debt or a loan or lending asset in respect of which a deduction for bad debts or uncollectible loans or lending assets had been made in computing his income for a preceding taxation year;

(i.1)  that proportion of 1/2 of the amount received in the year on account of a debt in respect of which a deduction for a bad debt under section 142.1 had been made in computing the taxpayer’s income for a preceding taxation year that the amount deducted under that section in respect of that debt is of the aggregate of the amount so deducted and the amount deemed under section 142.1 or 142.2 to be an allowable capital loss in respect of that debt;

(j)  any amount received by him in the year out of or under an employee trust or a profit sharing plan established for the benefit of employees of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length;

(j.1)  the amount by which the aggregate of amounts received by him in the year out of or under an employee benefit plan to which he has contributed as an employer, other than amounts included in computing his income by virtue of paragraph n, exceeds the amount by which the aggregate of all amounts so contributed by him to the plan, or included in computing his income for any preceding taxation year by virtue of this paragraph, exceeds the aggregate of all amounts deducted by him in respect of his contributions to the plan in computing his income for the year or any preceding taxation year, or received by him out of or under the plan in any preceding taxation year, other than amounts included in computing his income by virtue of paragraph n;

(j.2)  any amount in respect of deferred amounts under a salary deferral arrangement in respect of another person, that was deductible under section 78.2 in computing the income of that other person for a taxation year ending in the year where the deferred amounts have been deducted under paragraph p of section 157 in computing the taxpayer’s income for preceding taxation years;

(j.3)  any amount he must include in computing his income for the year under section 890.11;

(k)  any amount he must include in computing his income for the year under Title IX in respect of a dividend paid by a corporation resident in Canada on a share of its capital stock;

(l)  any amount he must include in computing his income for the year under Title X in respect of a dividend paid by a corporation not resident in Canada on a share of its capital stock or in respect of a share he owns of the capital stock of his foreign affiliate;

(m)  any amount that is, under Title XI, income from a business or property of the taxpayer;

(n)  any amount he must include in computing his income for the year under Title XII or section 1121.1, except

i.  any amount deemed to be a taxable capital gain of the taxpayer under that Title, and

ii.  any amount paid or payable to the taxpayer out of or under an RCA trust within the meaning assigned by section 890.1;

(o)  any amount received by the taxpayer in the year as a stabilization payment, or as a refund of a levy, under the Western Grain Stabilization Act (R.S.C. 1985, c. W-7) or as a payment, or a refund of a premium, in respect of the gross revenue insurance program established under the Farm Income Protection Act (S.C. 1991, c. 22);

(p)  any prescribed amount deducted by him for the year as employment tax credit;

(q)  any amount that, in respect of a property described in his inventory, at the end of the year, is an allowance in respect of depreciation, obsolescence or depletion included in the cost amount of that property to him at the end of the year;

(r)  the aggregate of all amounts each of which is the maximum amount that an insurer may claim in the year in respect of a reserve for a reinsurance commission for a policy as allowed by regulations made under the second paragraph of section 152 in respect of a risk the reinsurance of which is assumed by the taxpayer;

(s)  the amount of any grant received by him in the year under a prescribed program relating to home insulation or energy conversion in respect of a property used by him principally for the purpose of gaining or producing income from a business or property;

(t)  the amount by which the aggregate of amounts determined at the end of the year in respect of him under section 225 exceeds the aggregate of amounts determined at that time in respect of him under sections 222 to 224;

(u)  the prescribed amount deducted in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), to the extent that such amount was not included in computing his income for a preceding taxation year under this paragraph or is not included in an amount determined under subparagraph f of the second paragraph of section 93, section 101 or 225, subparagraph vi of paragraph l of section 257, subparagraph ii of paragraph n of section 257 or paragraph g of section 399;

(v)  (paragraph repealed);

(w)  any particular amount, other than a prescribed amount, received by the taxpayer in the year, in the course of earning income from a business or property, from a government, municipality or other public authority, a person or partnership in this paragraph referred to as the “particular person”, who pays the particular amount in the course of earning income from a business or property, or in order to achieve a benefit for the particular person or for persons with whom the particular person does not deal at arm’s length, or in circumstances where it is reasonable to conclude that the particular person would not have paid the particular amount but for the receipt by the particular person of amounts from another particular person referred to in this paragraph or a government, municipality or public authority, where the particular amount can reasonably be considered to have been received as a refund, reimbursement, contribution or allowance or as assistance, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of assistance, in respect of an amount included in, or deducted as, the cost of property or in respect of an outlay or expense, or as an inducement, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of inducement, to the extent that the particular amount

i.  was not otherwise included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Part, any balance of undeducted outlays, expenses or other amounts, for the year or a preceding taxation year,

ii.  except as provided by any provision of Title III.3 of Book V or of Chapter III.1 of Title III of Book IX, does not reduce, for the purposes of this Part, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iii.  does not reduce, pursuant to paragraph f.2 of section 257 or section 87.4 or 101.6, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iv.  may not reasonably be considered to be a payment made in respect of the acquisition by the particular person or the public authority of an interest in the taxpayer or the taxpayer’s business or property, or

v.  is not an amount received by the taxpayer in respect of a restrictive covenant, within the meaning assigned by section 333.4, that was included under section 333.5 in computing the income of a person related to the taxpayer;

(w.1)  where the year ends after 31 December 2006, any amount, other than an amount otherwise included in computing the taxpayer’s income for the year or a preceding taxation year, that was received by the taxpayer, including by way of a deduction from tax, in the year as a refund, reimbursement, contribution or allowance, in respect of an amount that was at any time receivable, directly or indirectly in any manner whatever, by the State or Her Majesty in right of Canada or of a province, other than Québec, in relation to the acquisition, development or ownership of a Canadian resource property or the production in Canada from a mineral resource, a natural accumulation of petroleum or natural gas, or an oil or gas well, except that, where the year includes 31 December 2006,

i.  this paragraph shall be read with “the proportion that the number of days in the year that follow that date is of the number of days in the year, of” inserted before “any amount, other than an amount” in the portion before this subparagraph, and

ii.  this paragraph shall not be taken into account for the purposes of the regulations made under paragraph z.4 or section 145 or 360;

(x)  an amount that, where the taxpayer is an individual who is a member of a partnership or an employee of a member of a partnership and the partnership makes an automobile available in the year to the taxpayer or to a person related to the taxpayer, would be included, by reason of section 41, in computing the taxpayer’s income for the year if the taxpayer were employed by the partnership;

(y)  any amount in respect of an amateur athlete trust required by section 851.35 to be included in computing his income for the year;

(z)  any amount received by the taxpayer in the year as a beneficiary under an environmental trust, whether or not the amount is included because of section 692.1 in computing the taxpayer’s income for any taxation year;

(z.1)  the consideration received by the taxpayer in the year for the disposition to another person or partnership of all or part of the taxpayer’s interest as a beneficiary under an environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust;

(z.2)  any amount required because of section 485.13 to be included in computing the taxpayer’s income for the year;

(z.3)  any amount required because of section 979.21 to be included in computing the taxpayer’s income for the year;

(z.4)  where the year begins before 1 January 2007, 25% of the taxpayer’s resource loss for the year, as determined by regulation, except that, where the year includes that date, that percentage shall be replaced by the percentage obtained by multiplying 25% by the proportion that the number of days in the year that precede that date is of the number of days in the year;

(z.5)  any amount received by the taxpayer in the year in respect of a refund of an amount that was deducted under paragraph u of section 157 in computing the taxpayer’s income for any taxation year; and

(z.6)  any amount required because of section 935.26.1 to be included in computing the taxpayer’s income for the year.

1972, c. 23, s. 81; 1973, c. 18, s. 3; 1975, c. 22, s. 7; 1977, c. 26, s. 6; 1978, c. 26, s. 11; 1980, c. 13, s. 6; 1982, c. 5, s. 24; 1984, c. 15, s. 19; 1985, c. 25, s. 24; 1987, c. 67, s. 19; 1988, c. 18, s. 7; 1989, c. 5, s. 34; 1989, c. 77, s. 14; 1990, c. 59, s. 47; 1991, c. 25, s. 20; 1992, c. 1, s. 22; 1994, c. 22, s. 64; 1995, c. 1, s. 21; 1995, c. 49, s. 32; 1995, c. 63, s. 26; 1996, c. 39, s. 27; 1997, c. 3, s. 71; 1997, c. 14, s. 29; 1997, c. 31, s. 11; 1997, c. 85, s. 49; 1998, c. 16, s. 81; 1999, c. 83, s. 30; 2000, c. 5, s. 30; 2001, c. 7, s. 9; 2001, c. 51, s. 23; 2001, c. 53, s. 24; 2003, c. 2, s. 30; 2005, c. 1, s. 29; 2007, c. 12, s. 34; 2009, c. 5, s. 50; 2010, c. 5, s. 19.

2009-05-15

87. A taxpayer shall include in computing his income from a business or property for a taxation year,

(a)  any amount he receives in the year in the course of a business, even if such amount

i.  is paid him for services not rendered or goods not delivered before the end of the year, or may be regarded as not having been earned in the year or a previous year, or

ii.  is, under an arrangement or understanding, repayable in whole or in part on the return or resale to the taxpayer of articles in or by means of which goods were delivered to a customer;

(b)  any amount receivable in respect of property sold or services rendered in the course of a business in the year, even if that amount or any part thereof is not due until a subsequent year, unless the method adopted for computing his income from the business and accepted for the purposes of this Part does not require him to include, in computing his income for a taxation year, an amount not received in the year and, for the purposes of this paragraph, an amount is deemed to have become receivable in respect of services rendered in the course of a business on a day that is the earlier of the day upon which the account in respect of the services was rendered and the day upon which that account would have been rendered had there been no undue delay;

(c)  subject to sections 92 and 92.1.1, any amount received or receivable by the taxpayer in the year as interest, depending on the method regularly followed by the taxpayer in computing the taxpayer’s income, to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year;

(d)  any amount deducted under section 140 as a reserve in computing his income for the preceding taxation year;

(d.1)  any amount deducted under section 140.2 as a reserve in computing his income for the preceding taxation year;

(e)  any amount deducted in computing his income from a business for the preceding year

i.  under section 150, including any amount substituted under section 151,

ii.  under sections 150.1 and 152, or

iii.  under section 153;

(e.1)  where the taxpayer is an insurer, any amount prescribed in respect of the insurer for the year;

(f)  any amount received or receivable under an insurance policy or otherwise, as compensation for damage to his depreciable property, that he expends for repair of the damage within the year and within a reasonable time after the damage;

(g)  any amount received by the taxpayer in the year and established in respect of the use of or production from property, even if that amount is an instalment of the sale price of such property, but not including an instalment of the sale price of agricultural land;

(g.1)  any proceeds of disposition in respect of which section 158.6 applies;

(h)  any amount deducted as an allowance for the quadrennial or special inspection of a vessel under section 154 in computing his income for the previous year;

(i)  any amount, other than an amount referred to in paragraph i.1, received in the year on account of a debt or a loan or lending asset in respect of which a deduction for bad debts or uncollectible loans or lending assets had been made in computing his income for a preceding taxation year;

(i.1)  that proportion of 1/2 of the amount received in the year on account of a debt in respect of which a deduction for a bad debt under section 142.1 had been made in computing the taxpayer’s income for a preceding taxation year that the amount deducted under that section in respect of that debt is of the aggregate of the amount so deducted and the amount deemed under section 142.1 or 142.2 to be an allowable capital loss in respect of that debt;

(j)  any amount received by him in the year out of or under an employee trust or a profit sharing plan established for the benefit of employees of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length;

(j.1)  the amount by which the aggregate of amounts received by him in the year out of or under an employee benefit plan to which he has contributed as an employer, other than amounts included in computing his income by virtue of paragraph n, exceeds the amount by which the aggregate of all amounts so contributed by him to the plan, or included in computing his income for any preceding taxation year by virtue of this paragraph, exceeds the aggregate of all amounts deducted by him in respect of his contributions to the plan in computing his income for the year or any preceding taxation year, or received by him out of or under the plan in any preceding taxation year, other than amounts included in computing his income by virtue of paragraph n;

(j.2)  any amount in respect of deferred amounts under a salary deferral arrangement in respect of another person, that was deductible under section 78.2 in computing the income of that other person for a taxation year ending in the year where the deferred amounts have been deducted under paragraph p of section 157 in computing the taxpayer’s income for preceding taxation years;

(j.3)  any amount he must include in computing his income for the year under section 890.11;

(k)  any amount he must include in computing his income for the year under Title IX in respect of a dividend paid by a corporation resident in Canada on a share of its capital stock;

(l)  any amount he must include in computing his income for the year under Title X in respect of a dividend paid by a corporation not resident in Canada on a share of its capital stock or in respect of a share he owns of the capital stock of his foreign affiliate;

(m)  any amount that is, under Title XI, income from a business or property of the taxpayer;

(n)  any amount he must include in computing his income for the year under Title XII or section 1121.1, except

i.  any amount deemed to be a taxable capital gain of the taxpayer under that Title, and

ii.  any amount paid or payable to the taxpayer out of or under an RCA trust within the meaning assigned by section 890.1;

(o)  any amount received by the taxpayer in the year as a stabilization payment, or as a refund of a levy, under the Western Grain Stabilization Act (R.S.C. 1985, c. W-7) or as a payment, or a refund of a premium, in respect of the gross revenue insurance program established under the Farm Income Protection Act (S.C. 1991, c. 22);

(p)  any prescribed amount deducted by him for the year as employment tax credit;

(q)  any amount that, in respect of a property described in his inventory, at the end of the year, is an allowance in respect of depreciation, obsolescence or depletion included in the cost amount of that property to him at the end of the year;

(r)  the aggregate of all amounts each of which is the maximum amount that an insurer may claim in the year in respect of a reserve for a reinsurance commission for a policy as allowed by regulations made under the second paragraph of section 152 in respect of a risk the reinsurance of which is assumed by the taxpayer;

(s)  the amount of any grant received by him in the year under a prescribed program relating to home insulation or energy conversion in respect of a property used by him principally for the purpose of gaining or producing income from a business or property;

(t)  the amount by which the aggregate of amounts determined at the end of the year in respect of him under section 225 exceeds the aggregate of amounts determined at that time in respect of him under sections 222 to 224;

(u)  the prescribed amount deducted in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), to the extent that such amount was not included in computing his income for a preceding taxation year under this paragraph or is not included in an amount determined under subparagraph f of the second paragraph of section 93, section 101 or 225, subparagraph vi of paragraph l of section 257, subparagraph ii of paragraph n of section 257 or paragraph g of section 399;

(v)  (paragraph repealed);

(w)  any particular amount, other than a prescribed amount, received by the taxpayer in the year, in the course of earning income from a business or property, from a government, municipality or other public authority, a person or partnership in this paragraph referred to as the “particular person”, who pays the particular amount in the course of earning income from a business or property, or in order to achieve a benefit for the particular person or for persons with whom the particular person does not deal at arm’s length, or in circumstances where it is reasonable to conclude that the particular person would not have paid the particular amount but for the receipt by the particular person of amounts from another particular person referred to in this paragraph or a government, municipality or public authority, where the particular amount can reasonably be considered to have been received as a refund, reimbursement, contribution or allowance or as assistance, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of assistance, in respect of an amount included in, or deducted as, the cost of property or in respect of an outlay or expense, or as an inducement, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of inducement, to the extent that the particular amount

i.  was not otherwise included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Part, any balance of undeducted outlays, expenses or other amounts, for the year or a preceding taxation year,

ii.  except as provided by any provision of Title III.3 of Book V or of Chapter III.1 of Title III of Book IX, does not reduce, for the purposes of this Part, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iii.  does not reduce, pursuant to paragraph f.2 of section 257 or section 87.4 or 101.6, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iv.  may not reasonably be considered to be a payment made in respect of the acquisition by the particular person or the public authority of an interest in the taxpayer or the taxpayer’s business or property, or

v.  is not an amount received by the taxpayer in respect of a restrictive covenant, within the meaning assigned by section 333.4, that was included under section 333.5 in computing the income of a person related to the taxpayer;

(w.1)  where the year ends after 31 December 2006, any amount, other than an amount otherwise included in computing the taxpayer’s income for the year or a preceding taxation year, that was received by the taxpayer, including by way of a deduction from tax, in the year as a refund, reimbursement, contribution or allowance, in respect of an amount that was at any time receivable, directly or indirectly in any manner whatever, by the State or Her Majesty in right of Canada or of a province, other than Québec, in relation to the acquisition, development or ownership of a Canadian resource property or the production in Canada from a mineral resource, a natural accumulation of petroleum or natural gas, or an oil or gas well, except that, where the year includes 31 December 2006,

i.  this paragraph shall be read with “the proportion that the number of days in the year that follow that date is of the number of days in the year, of” inserted before “any amount, other than an amount” in the portion before this subparagraph, and

ii.  this paragraph shall not be taken into account for the purposes of the regulations made under paragraph z.4 or section 145 or 360;

(x)  an amount that, where the taxpayer is an individual who is a member of a partnership or an employee of a member of a partnership and the partnership makes an automobile available in the year to the taxpayer or to a person related to the taxpayer, would be included, by reason of section 41, in computing the taxpayer’s income for the year if the taxpayer were employed by the partnership;

(y)  any amount in respect of an amateur athlete trust required by section 851.35 to be included in computing his income for the year;

(z)  any amount received by the taxpayer in the year as a beneficiary under an environmental trust, whether or not the amount is included because of section 692.1 in computing the taxpayer’s income for any taxation year;

(z.1)  the consideration received by the taxpayer in the year for the disposition to another person or partnership of all or part of the taxpayer’s interest as a beneficiary under an environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust;

(z.2)  any amount required because of section 485.13 to be included in computing the taxpayer’s income for the year;

(z.3)  any amount required because of section 979.21 to be included in computing the taxpayer’s income for the year;

(z.4)  where the year begins before 1 January 2007, 25% of the taxpayer’s resource loss for the year, as determined by regulation, except that, where the year includes that date, that percentage shall be replaced by the percentage obtained by multiplying 25% by the proportion that the number of days in the year that precede that date is of the number of days in the year; and

(z.5)  any amount received by the taxpayer in the year in respect of a refund of an amount that was deducted under paragraph u of section 157 in computing the taxpayer’s income for any taxation year.

1972, c. 23, s. 81; 1973, c. 18, s. 3; 1975, c. 22, s. 7; 1977, c. 26, s. 6; 1978, c. 26, s. 11; 1980, c. 13, s. 6; 1982, c. 5, s. 24; 1984, c. 15, s. 19; 1985, c. 25, s. 24; 1987, c. 67, s. 19; 1988, c. 18, s. 7; 1989, c. 5, s. 34; 1989, c. 77, s. 14; 1990, c. 59, s. 47; 1991, c. 25, s. 20; 1992, c. 1, s. 22; 1994, c. 22, s. 64; 1995, c. 1, s. 21; 1995, c. 49, s. 32; 1995, c. 63, s. 26; 1996, c. 39, s. 27; 1997, c. 3, s. 71; 1997, c. 14, s. 29; 1997, c. 31, s. 11; 1997, c. 85, s. 49; 1998, c. 16, s. 81; 1999, c. 83, s. 30; 2000, c. 5, s. 30; 2001, c. 7, s. 9; 2001, c. 51, s. 23; 2001, c. 53, s. 24; 2003, c. 2, s. 30; 2005, c. 1, s. 29; 2007, c. 12, s. 34; 2009, c. 5, s. 50.

2007-11-07

87. A taxpayer shall include in computing his income from a business or property for a taxation year,

(a)  any amount he receives in the year in the course of a business, even if such amount

i.  is paid him for services not rendered or goods not delivered before the end of the year, or may be regarded as not having been earned in the year or a previous year, or

ii.  is, under an arrangement or understanding, repayable in whole or in part on the return or resale to the taxpayer of articles in or by means of which goods were delivered to a customer;

(b)  any amount receivable in respect of property sold or services rendered in the course of a business in the year, even if that amount or any part thereof is not due until a subsequent year, unless the method adopted for computing his income from the business and accepted for the purposes of this Part does not require him to include, in computing his income for a taxation year, an amount not received in the year and, for the purposes of this paragraph, an amount is deemed to have become receivable in respect of services rendered in the course of a business on a day that is the earlier of the day upon which the account in respect of the services was rendered and the day upon which that account would have been rendered had there been no undue delay;

(c)  subject to sections 92 and 92.1.1, any amount received or receivable by the taxpayer in the year as interest, depending on the method regularly followed by the taxpayer in computing the taxpayer’s income, to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year;

(d)  any amount deducted under section 140 as a reserve in computing his income for the preceding taxation year;

(d.1)  any amount deducted under section 140.2 as a reserve in computing his income for the preceding taxation year;

(e)  any amount deducted in computing his income from a business for the preceding year

i.  under section 150, including any amount substituted under section 151,

ii.  under sections 150.1 and 152, or

iii.  under section 153;

(e.1)  where the taxpayer is an insurer, any amount prescribed in respect of the insurer for the year;

(f)  any amount received or receivable under an insurance policy or otherwise, as compensation for damage to his depreciable property, that he expends for repair of the damage within the year and within a reasonable time after the damage;

(g)  any amount received by the taxpayer in the year and established in respect of the use of or production from property, even if that amount is an instalment of the sale price of such property, but not including an instalment of the sale price of agricultural land;

(g.1)  any proceeds of disposition in respect of which section 158.6 applies;

(h)  any amount deducted as an allowance for the quadrennial or special inspection of a vessel under section 154 in computing his income for the previous year;

(i)  any amount, other than an amount referred to in paragraph i.1, received in the year on account of a debt or a loan or lending asset in respect of which a deduction for bad debts or uncollectible loans or lending assets had been made in computing his income for a preceding taxation year;

(i.1)  that proportion of 1/2 of the amount received in the year on account of a debt in respect of which a deduction for a bad debt under section 142.1 had been made in computing the taxpayer’s income for a preceding taxation year that the amount deducted under that section in respect of that debt is of the aggregate of the amount so deducted and the amount deemed under section 142.1 or 142.2 to be an allowable capital loss in respect of that debt;

(j)  any amount received by him in the year out of or under an employee trust or a profit sharing plan established for the benefit of employees of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length;

(j.1)  the amount by which the aggregate of amounts received by him in the year out of or under an employee benefit plan to which he has contributed as an employer, other than amounts included in computing his income by virtue of paragraph n, exceeds the amount by which the aggregate of all amounts so contributed by him to the plan, or included in computing his income for any preceding taxation year by virtue of this paragraph, exceeds the aggregate of all amounts deducted by him in respect of his contributions to the plan in computing his income for the year or any preceding taxation year, or received by him out of or under the plan in any preceding taxation year, other than amounts included in computing his income by virtue of paragraph n;

(j.2)  any amount in respect of deferred amounts under a salary deferral arrangement in respect of another person, that was deductible under section 78.2 in computing the income of that other person for a taxation year ending in the year where the deferred amounts have been deducted under paragraph p of section 157 in computing the taxpayer’s income for preceding taxation years;

(j.3)  any amount he must include in computing his income for the year under section 890.11;

(k)  any amount he must include in computing his income for the year under Title IX in respect of a dividend paid by a corporation resident in Canada on a share of its capital stock;

(l)  any amount he must include in computing his income for the year under Title X in respect of a dividend paid by a corporation not resident in Canada on a share of its capital stock or in respect of a share he owns of the capital stock of his foreign affiliate;

(m)  any amount that is, under Title XI, income from a business or property of the taxpayer;

(n)  any amount he must include in computing his income for the year under Title XII or section 1121.1, except

i.  any amount deemed to be a taxable capital gain of the taxpayer under that Title, and

ii.  any amount paid or payable to the taxpayer out of or under an RCA trust within the meaning assigned by section 890.1;

(o)  any amount received by the taxpayer in the year as a stabilization payment, or as a refund of a levy, under the Western Grain Stabilization Act (Revised Statutes of Canada, 1985, chapter W-7) or as a payment, or a refund of a premium, in respect of the gross revenue insurance program established under the Farm Income Protection Act (Statutes of Canada, 1991, chapter 22);

(p)  any prescribed amount deducted by him for the year as employment tax credit;

(q)  any amount that, in respect of a property described in his inventory, at the end of the year, is an allowance in respect of depreciation, obsolescence or depletion included in the cost amount of that property to him at the end of the year;

(r)  the aggregate of all amounts each of which is the maximum amount that an insurer may claim in the year in respect of a reserve for a reinsurance commission for a policy as allowed by regulations made under the second paragraph of section 152 in respect of a risk the reinsurance of which is assumed by the taxpayer;

(s)  the amount of any grant received by him in the year under a prescribed program relating to home insulation or energy conversion in respect of a property used by him principally for the purpose of gaining or producing income from a business or property;

(t)  the amount by which the aggregate of amounts determined at the end of the year in respect of him under section 225 exceeds the aggregate of amounts determined at that time in respect of him under sections 222 to 224;

(u)  the prescribed amount deducted in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year under the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement), to the extent that such amount was not included in computing his income for a preceding taxation year under this paragraph or is not included in an amount determined under subparagraph f of the second paragraph of section 93, section 101 or 225, subparagraph vi of paragraph l of section 257, subparagraph ii of paragraph n of section 257 or paragraph g of section 399;

(v)  (paragraph repealed);

(w)  any particular amount, other than a prescribed amount, received by the taxpayer in the year, in the course of earning income from a business or property, from a government, municipality or other public authority, a person or partnership in this paragraph referred to as the “particular person”, who pays the particular amount in the course of earning income from a business or property, or in order to achieve a benefit for the particular person or for persons with whom the particular person does not deal at arm’s length, or in circumstances where it is reasonable to conclude that the particular person would not have paid the particular amount but for the receipt by the particular person of amounts from another particular person referred to in this paragraph or a government, municipality or public authority, where the particular amount can reasonably be considered to have been received as a refund, reimbursement, contribution or allowance or as assistance, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of assistance, in respect of an amount included in, or deducted as, the cost of property or in respect of an outlay or expense, or as an inducement, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of inducement, to the extent that the particular amount

i.  was not otherwise included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Part, any balance of undeducted outlays, expenses or other amounts, for the year or a preceding taxation year,

ii.  except as provided by any provision of Title III.3 of Book V or of Chapter III.1 of Title III of Book IX, does not reduce, for the purposes of this Part, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iii.  does not reduce, pursuant to paragraph f.2 of section 257 or section 87.4 or 101.6, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be, or

iv.  may not reasonably be considered to be a payment made in respect of the acquisition by the particular person or the public authority of an interest in the taxpayer or the taxpayer’s business or property;

(w.1)  where the year ends after 31 December 2006, any amount, other than an amount otherwise included in computing the taxpayer’s income for the year or a preceding taxation year, that was received by the taxpayer, including by way of a deduction from tax, in the year as a refund, reimbursement, contribution or allowance, in respect of an amount that was at any time receivable, directly or indirectly in any manner whatever, by the State or Her Majesty in right of Canada or of a province, other than Québec, in relation to the acquisition, development or ownership of a Canadian resource property or the production in Canada from a mineral resource, a natural accumulation of petroleum or natural gas, or an oil or gas well, except that, where the year includes 31 December 2006,

i.  this paragraph shall be read with “the proportion that the number of days in the year that follow that date is of the number of days in the year, of” inserted before “any amount, other than an amount” in the portion before this subparagraph, and

ii.  this paragraph shall not be taken into account for the purposes of the regulations made under paragraph z.4 or section 145 or 360;

(x)  an amount that, where the taxpayer is an individual who is a member of a partnership or an employee of a member of a partnership and the partnership makes an automobile available in the year to the taxpayer or to a person related to the taxpayer, would be included, by reason of section 41, in computing the taxpayer’s income for the year if the taxpayer were employed by the partnership;

(y)  any amount in respect of an amateur athlete trust required by section 851.35 to be included in computing his income for the year;

(z)  any amount received by the taxpayer in the year as a beneficiary under an environmental trust, whether or not the amount is included because of section 692.1 in computing the taxpayer’s income for any taxation year;

(z.1)  the consideration received by the taxpayer in the year for the disposition to another person or partnership of all or part of the taxpayer’s interest as a beneficiary under an environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust;

(z.2)  any amount required because of section 485.13 to be included in computing the taxpayer’s income for the year;

(z.3)  any amount required because of section 979.21 to be included in computing the taxpayer’s income for the year;

(z.4)  where the year begins before 1 January 2007, 25% of the taxpayer’s resource loss for the year, as determined by regulation, except that, where the year includes that date, that percentage shall be replaced by the percentage obtained by multiplying 25% by the proportion that the number of days in the year that precede that date is of the number of days in the year; and

(z.5)  any amount received by the taxpayer in the year in respect of a refund of an amount that was deducted under paragraph u of section 157 in computing the taxpayer’s income for any taxation year.

1972, c. 23, s. 81; 1973, c. 18, s. 3; 1975, c. 22, s. 7; 1977, c. 26, s. 6; 1978, c. 26, s. 11; 1980, c. 13, s. 6; 1982, c. 5, s. 24; 1984, c. 15, s. 19; 1985, c. 25, s. 24; 1987, c. 67, s. 19; 1988, c. 18, s. 7; 1989, c. 5, s. 34; 1989, c. 77, s. 14; 1990, c. 59, s. 47; 1991, c. 25, s. 20; 1992, c. 1, s. 22; 1994, c. 22, s. 64; 1995, c. 1, s. 21; 1995, c. 49, s. 32; 1995, c. 63, s. 26; 1996, c. 39, s. 27; 1997, c. 3, s. 71; 1997, c. 14, s. 29; 1997, c. 31, s. 11; 1997, c. 85, s. 49; 1998, c. 16, s. 81; 1999, c. 83, s. 30; 2000, c. 5, s. 30; 2001, c. 7, s. 9; 2001, c. 51, s. 23; 2001, c. 53, s. 24; 2003, c. 2, s. 30; 2005, c. 1, s. 29; 2007, c. 12, s. 34.

2006-03-01

87. A taxpayer shall include in computing his income from a business or property for a taxation year,

(a)  any amount he receives in the year in the course of a business, even if such amount

i.  is paid him for services not rendered or goods not delivered before the end of the year, or may be regarded as not having been earned in the year or a previous year, or

ii.  is, under an arrangement or understanding, repayable in whole or in part on the return or resale to the taxpayer of articles in or by means of which goods were delivered to a customer;

(b)  any amount receivable in respect of property sold or services rendered in the course of a business in the year, even if that amount or any part thereof is not due until a subsequent year, unless the method adopted for computing his income from the business and accepted for the purposes of this Part does not require him to include, in computing his income for a taxation year, an amount not received in the year and, for the purposes of this paragraph, an amount is deemed to have become receivable in respect of services rendered in the course of a business on a day that is the earlier of the day upon which the account in respect of the services was rendered and the day upon which that account would have been rendered had there been no undue delay;

(c)  subject to sections 92 and 92.1.1, any amount received or receivable by the taxpayer in the year as interest, depending on the method regularly followed by the taxpayer in computing the taxpayer’s income, to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year;

(d)  any amount deducted under section 140 as a reserve in computing his income for the preceding taxation year;

(d.1)  any amount deducted under section 140.2 as a reserve in computing his income for the preceding taxation year;

(e)  any amount deducted in computing his income from a business for the preceding year

i.  under section 150, including any amount substituted under section 151,

ii.  under sections 150.1 and 152, or

iii.  under section 153;

(e.1)  where the taxpayer is an insurer, any amount prescribed in respect of the insurer for the year;

(f)  any amount received or receivable under an insurance policy or otherwise, as compensation for damage to his depreciable property, that he expends for repair of the damage within the year and within a reasonable time after the damage;

(g)  any amount received by the taxpayer in the year and established in respect of the use of or production from property, even if that amount is an instalment of the sale price of such property, but not including an instalment of the sale price of agricultural land;

(g.1)  any proceeds of disposition in respect of which section 158.6 applies;

(h)  any amount deducted as an allowance for the quadrennial or special inspection of a vessel under section 154 in computing his income for the previous year;

(i)  any amount, other than an amount referred to in paragraph i.1, received in the year on account of a debt or a loan or lending asset in respect of which a deduction for bad debts or uncollectible loans or lending assets had been made in computing his income for a preceding taxation year;

(i.1)  that proportion of 1/2 of the amount received in the year on account of a debt in respect of which a deduction for a bad debt under section 142.1 had been made in computing the taxpayer’s income for a preceding taxation year that the amount deducted under that section in respect of that debt is of the aggregate of the amount so deducted and the amount deemed under section 142.1 or 142.2 to be an allowable capital loss in respect of that debt;

(j)  any amount received by him in the year out of or under an employee trust or a profit sharing plan established for the benefit of employees of the taxpayer or of a person with whom the taxpayer does not deal at arm’s length;

(j.1)  the amount by which the aggregate of amounts received by him in the year out of or under an employee benefit plan to which he has contributed as an employer, other than amounts included in computing his income by virtue of paragraph n, exceeds the amount by which the aggregate of all amounts so contributed by him to the plan, or included in computing his income for any preceding taxation year by virtue of this paragraph, exceeds the aggregate of all amounts deducted by him in respect of his contributions to the plan in computing his income for the year or any preceding taxation year, or received by him out of or under the plan in any preceding taxation year, other than amounts included in computing his income by virtue of paragraph n;

(j.2)  any amount in respect of deferred amounts under a salary deferral arrangement in respect of another person, that was deductible under section 78.2 in computing the income of that other person for a taxation year ending in the year where the deferred amounts have been deducted under paragraph p of section 157 in computing the taxpayer’s income for preceding taxation years;

(j.3)  any amount he must include in computing his income for the year under section 890.11;

(k)  any amount he must include in computing his income for the year under Title IX in respect of a dividend paid by a corporation resident in Canada on a share of its capital stock;

(l)  any amount he must include in computing his income for the year under Title X in respect of a dividend paid by a corporation not resident in Canada on a share of its capital stock or in respect of a share he owns of the capital stock of his foreign affiliate;

(m)  any amount that is, under Title XI, income from a business or property of the taxpayer;

(n)  any amount he must include in computing his income for the year under Title XII or section 1121.1, except

i.  any amount deemed to be a taxable capital gain of the taxpayer under that Title, and

ii.  any amount paid or payable to the taxpayer out of or under an RCA trust within the meaning assigned by section 890.1;

(o)  any amount received by the taxpayer in the year as a stabilization payment, or as a refund of a levy, under the Western Grain Stabilization Act (Revised Statutes of Canada, 1985, chapter W-7) or as a payment, or a refund of a premium, in respect of the gross revenue insurance program established under the Farm Income Protection Act (Statutes of Canada, 1991, chapter 22);

(p)  any prescribed amount deducted by him for the year as employment tax credit;

(q)  any amount that, in respect of a property described in his inventory, at the end of the year, is an allowance in respect of depreciation, obsolescence or depletion included in the cost amount of that property to him at the end of the year;

(r)  the aggregate of all amounts each of which is the maximum amount that an insurer may claim in the year in respect of a reserve for a reinsurance commission for a policy as allowed by regulations made under the second paragraph of section 152 in respect of a risk the reinsurance of which is assumed by the taxpayer;

(s)  the amount of any grant received by him in the year under a prescribed program relating to home insulation or energy conversion in respect of a property used by him principally for the purpose of gaining or producing income from a business or property;

(t)  the amount by which the aggregate of amounts determined at the end of the year in respect of him under section 225 exceeds the aggregate of amounts determined at that time in respect of him under sections 222 to 224;

(u)  the prescribed amount deducted in respect of a property acquired or an expenditure made in a preceding taxation year in computing the taxpayer’s tax payable for a preceding taxation year under the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement), to the extent that such amount was not included in computing his income for a preceding taxation year under this paragraph or is not included in an amount determined under subparagraph f of the second paragraph of section 93, section 101 or 225, subparagraph vi of paragraph l of section 257, subparagraph ii of paragraph n of section 257 or paragraph g of section 399;

(v)  any amount he is required to include in computing his income from a business under Title VIII of Book VII, in relation to an amount withdrawn from a reserve account for contingent losses within the meaning of section 979.2;

(w)  any particular amount, other than a prescribed amount, received by the taxpayer in the year, in the course of earning income from a business or property, from a government, municipality or other public authority, a person or partnership in this paragraph referred to as the “particular person”, who pays the particular amount in the course of earning income from a business or property, or in order to achieve a benefit for the particular person or for persons with whom the particular person does not deal at arm’s length, or in circumstances where it is reasonable to conclude that the particular person would not have paid the particular amount but for the receipt by the particular person of amounts from another particular person referred to in this paragraph or a government, municipality or public authority, where the particular amount can reasonably be considered to have been received as a refund, reimbursement, contribution or allowance or as assistance, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of assistance, in respect of an amount included in, or deducted as, the cost of property or in respect of an outlay or expense, or as an inducement, whether as a grant, subsidy, forgivable loan, deduction from tax, allowance or any other form of inducement, to the extent that the particular amount

i.  was not otherwise included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Part, any balance of undeducted outlays, expenses or other amounts, for the year or a preceding taxation year,

ii.  except as provided by any provision of Chapter III.1 of Title III of Book IX, does not reduce, for the purposes of this Part, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be,

iii.  does not reduce, pursuant to paragraph f.2 of section 257 or section 87.4 or 101.6, the cost or capital cost of the property or the amount of the outlay or expense, as the case may be, or

iv.  may not reasonably be considered to be a payment made in respect of the acquisition by the particular person or the public authority of an interest in the taxpayer or the taxpayer’s business or property;

(w.1)  where the year ends after 31 December 2006, any amount, other than an amount otherwise included in computing the taxpayer’s income for the year or a preceding taxation year, that was received by the taxpayer, including by way of a deduction from tax, in the year as a refund, reimbursement, contribution or allowance, in respect of an amount that was at any time receivable, directly or indirectly in any manner whatever, by the State or Her Majesty in right of Canada or of a province, other than Québec, in relation to the acquisition, development or ownership of a Canadian resource property or the production in Canada from a mineral resource, a natural accumulation of petroleum or natural gas, or an oil or gas well, except that, where the year includes 31 December 2006,

i.  this paragraph shall be read with “the proportion that the number of days in the year that follow that date is of the number of days in the year, of” inserted before “any amount, other than an amount” in the portion before this subparagraph, and

ii.  this paragraph shall not be taken into account for the purposes of the regulations made under paragraph z.4 or section 145 or 360;

(x)  an amount that, where the taxpayer is an individual who is a member of a partnership or an employee of a member of a partnership and the partnership makes an automobile available in the year to the taxpayer or to a person related to the taxpayer, would be included, by reason of section 41, in computing the taxpayer’s income for the year if the taxpayer were employed by the partnership;

(y)  any amount in respect of an amateur athlete trust required by section 851.35 to be included in computing his income for the year;

(z)  any amount received by the taxpayer in the year as a beneficiary under an environmental trust, whether or not the amount is included because of section 692.1 in computing the taxpayer’s income for any taxation year;

(z.1)  the consideration received by the taxpayer in the year for the disposition to another person or partnership of all or part of the taxpayer’s interest as a beneficiary under an environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust;

(z.2)  any amount required because of section 485.13 to be included in computing the taxpayer’s income for the year;

(z.3)  any amount required because of section 979.21 to be included in computing the taxpayer’s income for the year;

(z.4)  where the year begins before 1 January 2007, 25% of the taxpayer’s resource loss for the year, as determined by regulation, except that, where the year includes that date, that percentage shall be replaced by the percentage obtained by multiplying 25% by the proportion that the number of days in the year that precede that date is of the number of days in the year; and

(z.5)  any amount received by the taxpayer in the year in respect of a refund of an amount that was deducted under paragraph u of section 157 in computing the taxpayer’s income for any taxation year.

1972, c. 23, s. 81; 1973, c. 18, s. 3; 1975, c. 22, s. 7; 1977, c. 26, s. 6; 1978, c. 26, s. 11; 1980, c. 13, s. 6; 1982, c. 5, s. 24; 1984, c. 15, s. 19; 1985, c. 25, s. 24; 1987, c. 67, s. 19; 1988, c. 18, s. 7; 1989, c. 5, s. 34; 1989, c. 77, s. 14; 1990, c. 59, s. 47; 1991, c. 25, s. 20; 1992, c. 1, s. 22; 1994, c. 22, s. 64; 1995, c. 1, s. 21; 1995, c. 49, s. 32; 1995, c. 63, s. 26; 1996, c. 39, s. 27; 1997, c. 3, s. 71; 1997, c. 14, s. 29; 1997, c. 31, s. 11; 1997, c. 85, s. 49; 1998, c. 16, s. 81; 1999, c. 83, s. 30; 2000, c. 5, s. 30; 2001, c. 7, s. 9; 2001, c. 51, s. 23; 2001, c. 53, s. 24; 2003, c. 2, s. 30; 2005, c. 1, s. 29.