T-0.1 - Act respecting the Québec sales tax

Section 289.2 Disposition versions

2020-09-24

289.2. In this division,

“active member” has the meaning assigned by subsection 1 of section 8500 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.));

“defined benefits pension plan” means the part of a pension plan that is in respect of benefits under the plan that are determined in accordance with a formula set forth in the plan and under which the employer contributions are not determined in accordance with a formula set forth in the plan;

“defined contribution pension plan” means the part of a pension plan that is not a defined benefits pension plan;

“employer resource” of a person means

(1)  all or part of a labour activity of the person, other than a part of the labour activity consumed or used by the person in the process of creating or developing a property;

(2)  all or part of a property or service supplied to the person, other than a part of the property or service consumed or used by the person in the process of creating or developing a property;

(3)  all or part of a property created or developed by the person; or

(4)  one or more of the items referred to in paragraphs 1 to 3;

“excluded activity”, in respect of a pension plan, means an activity undertaken exclusively

(1)  for compliance by a participating employer of the pension plan as an issuer, or prospective issuer, of securities with reporting requirements under a law of Québec, another province, the Northwest Territories, the Yukon Territory, Nunavut or Canada in respect of the regulation of securities;

(2)  for evaluating the feasibility or financial impact on a participating employer of the pension plan of establishing, altering or winding-up the pension plan, other than an activity that relates to the preparation of an actuarial report in respect of the plan required under a law of Québec, another province, the Northwest Territories, the Yukon Territory, Nunavut or Canada;

(3)  for evaluating the financial impact of the pension plan on the assets and liabilities of a participating employer of the pension plan;

(4)  for negotiating changes to the benefits under the pension plan with a union or similar organization of employees;

(4.1)  if the pension plan is a pooled registered pension plan, for compliance by a participating employer of the pension plan as an administrator of the pension plan with requirements under the Pooled Registered Pension Plans Act (S.C. 2012, c. 16) or a similar law of a province, the Northwest Territories, the Yukon Territory or Nunavut, provided the activity is undertaken exclusively for the purpose of making a taxable supply of a service to a pension entity of the pension plan that is to be made

(a)  for consideration that is not less than the fair market value of the service, and

(b)  at a time when no election under the first paragraph of section 289.9 made jointly by the participating employer and the pension entity is in effect; or

(4.2)  in relation to a part of the pension plan that is a defined contribution pension plan or that is a defined benefits pension plan, if no pension entity of the pension plan administers that part of the pension plan or holds assets in respect of that part of the pension plan; or

(5)  for prescribed purposes;

“labour activity” of a person means anything done by an individual who is or agrees to become an employee of the person in the course of, or in relation to, the office or employment of that individual;

“master pension factor”, in respect of a pension plan for a fiscal year of a master pension entity, means the amount (expressed as a percentage) determined by the formula

A / B;

“master pension group” in respect of a particular person and another person means the group of one or more pension plans that consists of every pension plan that meets the following conditions:

(1)  the particular person is a participating employer of the pension plan; and

(2)  the other person is a master pension entity of the pension plan;

“pension activity”, in respect of a pension plan, means an activity (other than an excluded activity) that relates to

(1)  the establishment, management or administration of the pension plan, of a pension entity of the pension plan or of a master pension entity of the pension plan; or

(2)  the management or administration of assets in respect of the pension plan, including assets held by a pension entity or master pension entity of the pension plan;

“provincial factor” in respect of a pension plan, for a fiscal year of a person that is a participating employer of the pension plan, means an amount (expressed as a percentage) determined by the formula

A × B;

“qualifying employer” of a pension plan for a fiscal year means a qualifying employer for that fiscal year for the purposes of section 172.1 of the Excise Tax Act (R.S.C. 1985, c. E-15);

“selected qualifying employer” of a pension plan for a fiscal year means a selected qualifying employer for that fiscal year for the purposes of section 172.1 of the Excise Tax Act.

“specified resource” means property or a service that is acquired by a person for the purpose of making a supply of all or part of the property or service to a pension entity or a master pension entity of a pension plan of which the person is a participating employer.

For the purposes of the formula in the definition of “master pension factor” in the first paragraph,

(1)  A is the total value, on the first day of the fiscal year, of the shares or units of the master pension entity that are held by pension entities of the pension plan on that day; and

(2)  B is the total value, on the first day of the fiscal year, of the shares or units of the master pension entity.

For the purposes of the formula in the definition of “provincial factor” in the first paragraph,

(1)  A is the tax rate applicable, specified in the first paragraph of section 16, on the last day of the fiscal year; and

(2)  B is

(a)  where the person made contributions to the pension plan during the fiscal year that may be deducted by the person under section 137 of the Taxation Act in computing its income (in the fourth paragraph referred to as “pension contributions”) and the number of active members of the pension plan who were employees of the person on the last day of the last calendar year ending on or before the last day of the fiscal year (in this paragraph and the fourth paragraph referred to as the “particular day”) is greater than zero, the amount determined by the formula

[(C/D) + (E/F)]/2;

(b)  where subparagraph a does not apply and the number of active members of the pension plan who were employees of the person on the particular day is greater than zero, the amount determined by the formula

E/F; and

(c)  in any other case, zero.

For the purposes of the formulas in subparagraphs a and b of subparagraph 2 of the third paragraph,

(1)  C is the total of all pension contributions made to the pension plan by the person during the fiscal year in respect of employees of the person who were resident in Québec on the particular day;

(2)  D is the total of all pension contributions made to the pension plan by the person during the fiscal year in respect of employees of the person;

(3)  E is the number of active members of the pension plan who were, on the particular day, employees of the person and resident in Québec; and

(4)  F is the number of active members of the pension plan who were, on the particular day, employees of the person.

2011, c. 34, s. 146; 2015, c. 21, s. 679; 2015, c. 36, s. 205; 2020, c. 16, s. 204.

2015-12-04

289.2. In this division,

“active member” has the meaning assigned by subsection 1 of section 8500 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.));

“employer resource” of a person means

(1)  all or part of a labour activity of the person, other than a part of the labour activity consumed or used by the person in the process of creating or developing a property;

(2)  all or part of a property or service supplied to the person, other than a part of the property or service consumed or used by the person in the process of creating or developing a property;

(3)  all or part of a property created or developed by the person; or

(4)  one or more of the items referred to in paragraphs 1 to 3;

“excluded activity”, in respect of a pension plan, means an activity undertaken exclusively for

(1)  compliance by a participating employer of the pension plan as an issuer, or prospective issuer, of securities with reporting requirements under a law of Québec, another province, the Northwest Territories, the Yukon Territory, Nunavut or Canada in respect of the regulation of securities;

(2)  evaluating the feasibility or financial impact on a participating employer of the pension plan of establishing, altering or winding-up the pension plan, other than an activity that relates to the preparation of an actuarial report in respect of the plan required under a law of Québec, another province, the Northwest Territories, the Yukon Territory, Nunavut or Canada;

(3)  evaluating the financial impact of the pension plan on the assets and liabilities of a participating employer of the pension plan;

(4)  negotiating changes to the benefits under the pension plan with a union or similar organization of employees;

(4.1)  if the pension plan is a pooled registered pension plan, compliance by a participating employer of the pension plan as an administrator of the pension plan with requirements under the Pooled Registered Pension Plans Act (S.C. 2012, c. 16) or a similar law of a province, the Northwest Territories, the Yukon Territory or Nunavut, provided the activity is undertaken exclusively for the purpose of making a taxable supply of a service to a pension entity of the pension plan that is to be made

(a)  for consideration that is not less than the fair market value of the service, and

(b)  at a time when no election under the first paragraph of section 289.9 made jointly by the participating employer and the pension entity is in effect; or

(5)  prescribed purposes;

“labour activity” of a person means anything done by an individual who is or agrees to become an employee of the person in the course of, or in relation to, the office or employment of that individual;

“pension activity”, in respect of a pension plan, means an activity (other than an excluded activity) that relates to

(1)  the establishment, management or administration of the pension plan or a pension entity of the pension plan; or

(2)  the management or administration of assets of the pension plan;

“provincial factor” in respect of a pension plan, for a fiscal year of a person that is a participating employer of the pension plan, means an amount (expressed as a percentage) determined by the formula

A × B.

“qualifying employer” of a pension plan for a fiscal year means a qualifying employer for that fiscal year for the purposes of section 172.1 of the Excise Tax Act (R.S.C. 1985, c. E-15);

“selected qualifying employer” of a pension plan for a fiscal year means a selected qualifying employer for that fiscal year for the purposes of section 172.1 of the Excise Tax Act.

For the purposes of the formula in the definition of “provincial factor” in the first paragraph,

(1)  A is the tax rate applicable, specified in the first paragraph of section 16, on the last day of the fiscal year; and

(2)  B is

(a)  where the person made contributions to the pension plan during the fiscal year that may be deducted by the person under section 137 of the Taxation Act in computing its income (in the third paragraph referred to as “pension contributions”) and the number of active members of the pension plan who were employees of the person on the last day of the last calendar year ending on or before the last day of the fiscal year (in this paragraph and the third paragraph referred to as the “particular day”) is greater than zero, the amount determined by the formula

[(C/D) + (E/F)]/2;

(b)  where subparagraph a does not apply and the number of active members of the pension plan who were employees of the person on the particular day is greater than zero, the amount determined by the formula

E/F; and

(c)  in any other case, zero.

For the purposes of the formulas in subparagraphs a and b of subparagraph 2 of the second paragraph,

(1)  C is the total of all pension contributions made to the pension plan by the person during the fiscal year in respect of employees of the person who were resident in Québec on the particular day;

(2)  D is the total of all pension contributions made to the pension plan by the person during the fiscal year in respect of employees of the person;

(3)  E is the number of active members of the pension plan who were, on the particular day, employees of the person and resident in Québec; and

(4)  F is the number of active members of the pension plan who were, on the particular day, employees of the person.

2011, c. 34, s. 146; 2015, c. 21, s. 679; 2015, c. 36, s. 205.

2015-10-21

289.2. In this division,

“active member” has the meaning assigned by subsection 1 of section 8500 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.));

“employer resource” of a person means

(1)  all or part of a labour activity of the person, other than a part of the labour activity consumed or used by the person in the process of creating or developing a property;

(2)  all or part of a property or service supplied to the person, other than a part of the property or service consumed or used by the person in the process of creating or developing a property;

(3)  all or part of a property created or developed by the person; or

(4)  one or more of the items referred to in paragraphs 1 to 3;

“excluded activity”, in respect of a pension plan, means an activity undertaken exclusively for

(1)  compliance by a participating employer of the pension plan as an issuer, or prospective issuer, of securities with reporting requirements under a law of Québec, another province, the Northwest Territories, the Yukon Territory, Nunavut or Canada in respect of the regulation of securities;

(2)  evaluating the feasibility or financial impact on a participating employer of the pension plan of establishing, altering or winding-up the pension plan, other than an activity that relates to the preparation of an actuarial report in respect of the plan required under a law of Québec, another province, the Northwest Territories, the Yukon Territory, Nunavut or Canada;

(3)  evaluating the financial impact of the pension plan on the assets and liabilities of a participating employer of the pension plan;

(4)  negotiating changes to the benefits under the pension plan with a union or similar organization of employees; or

(5)  prescribed purposes;

“labour activity” of a person means anything done by an individual who is or agrees to become an employee of the person in the course of, or in relation to, the office or employment of that individual;

“pension activity”, in respect of a pension plan, means an activity (other than an excluded activity) that relates to

(1)  the establishment, management or administration of the pension plan or a pension entity of the pension plan; or

(2)  the management or administration of assets of the pension plan;

“provincial factor” in respect of a pension plan, for a fiscal year of a person that is a participating employer of the pension plan, means an amount (expressed as a percentage) determined by the formula

A × B.

“qualifying employer” of a pension plan for a fiscal year means a qualifying employer for that fiscal year for the purposes of section 172.1 of the Excise Tax Act (R.S.C. 1985, c. E-15);

“selected qualifying employer” of a pension plan for a fiscal year means a selected qualifying employer for that fiscal year for the purposes of section 172.1 of the Excise Tax Act.

For the purposes of the formula in the definition of “provincial factor” in the first paragraph,

(1)  A is the tax rate applicable, specified in the first paragraph of section 16, on the last day of the fiscal year; and

(2)  B is

(a)  where the person made contributions to the pension plan during the fiscal year that may be deducted by the person under section 137 of the Taxation Act in computing its income (in the third paragraph referred to as “pension contributions”) and the number of active members of the pension plan who were employees of the person on the last day of the last calendar year ending on or before the last day of the fiscal year (in this paragraph and the third paragraph referred to as the “particular day”) is greater than zero, the amount determined by the formula

[(C/D) + (E/F)]/2;

(b)  where subparagraph a does not apply and the number of active members of the pension plan who were employees of the person on the particular day is greater than zero, the amount determined by the formula

E/F; and

(c)  in any other case, zero.

For the purposes of the formulas in subparagraphs a and b of subparagraph 2 of the second paragraph,

(1)  C is the total of all pension contributions made to the pension plan by the person during the fiscal year in respect of employees of the person who were resident in Québec on the particular day;

(2)  D is the total of all pension contributions made to the pension plan by the person during the fiscal year in respect of employees of the person;

(3)  E is the number of active members of the pension plan who were, on the particular day, employees of the person and resident in Québec; and

(4)  F is the number of active members of the pension plan who were, on the particular day, employees of the person.

2011, c. 34, s. 146; 2015, c. 21, s. 679.

2011-12-09

289.2. In this division,

“active member” has the meaning assigned by subsection 1 of section 8500 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.));

“employer resource” of a person means

(1)  all or part of a labour activity of the person, other than a part of the labour activity consumed or used by the person in the process of creating or developing a property;

(2)  all or part of a property or service supplied to the person, other than a part of the property or service consumed or used by the person in the process of creating or developing a property;

(3)  all or part of a property created or developed by the person; or

(4)  one or more of the items referred to in paragraphs 1 to 3;

“excluded activity”, in respect of a pension plan, means an activity undertaken exclusively for

(1)  compliance by a participating employer of the pension plan as an issuer, or prospective issuer, of securities with reporting requirements under a law of Québec, another province, the Northwest Territories, the Yukon Territory, Nunavut or Canada in respect of the regulation of securities;

(2)  evaluating the feasibility or financial impact on a participating employer of the pension plan of establishing, altering or winding-up the pension plan, other than an activity that relates to the preparation of an actuarial report in respect of the plan required under a law of Québec, another province, the Northwest Territories, the Yukon Territory, Nunavut or Canada;

(3)  evaluating the financial impact of the pension plan on the assets and liabilities of a participating employer of the pension plan;

(4)  negotiating changes to the benefits under the pension plan with a union or similar organization of employees; or

(5)  prescribed purposes;

“fiscal year” has the meaning assigned by section 458.1;

“labour activity” of a person means anything done by an individual who is or agrees to become an employee of the person in the course of, or in relation to, the office or employment of that individual;

“participating employer” of a pension plan means an employer that has made, or is required to make, contributions to the pension plan in respect of the employer’s employees or former employees, or payments under the pension plan to the employer’s employees or former employees, and includes an employer prescribed for the purposes of the definition of “participating employer” in subsection 1 of section 147.1 of the Income Tax Act;

“pension activity”, in respect of a pension plan, means an activity (other than an excluded activity) that relates to

(1)  the establishment, management or administration of the pension plan or a pension entity of the pension plan; or

(2)  the management or administration of assets of the pension plan;

“pension entity” of a pension plan means a person that is

(1)  a person referred to in paragraph 1 of the definition of “pension plan” ;

(2)  a corporation referred to in paragraph 2 of the definition of “pension plan” ; or

(3)  a prescribed person;

“pension plan” means a registered pension plan, within the meaning of section 1 of the Taxation Act (chapter I-3),

(1)  that governs a person that is a trust or that is deemed to be a trust for the purposes of that Act;

(2)  in respect of which a corporation is

(a)  incorporated and operated either

i.  solely for the administration of the registered pension plan, or

ii.  for the administration of the registered pension plan and for no other purpose other than acting as trustee of, or administering, a trust governed by a retirement compensation arrangement, within the meaning of section 1 of the Taxation Act, where the terms of the arrangement provide for benefits only in respect of individuals who are provided with benefits under the registered pension plan, and

(b)  accepted by the Minister of National Revenue, under subparagraph ii of paragraph o.1 of subsection 1 of section 149 of the Income Tax Act, as a funding medium for the purposes of the registration of the registered pension plan; or

(3)  in respect of which a person is a prescribed person for the purposes of the definition of “pension entity” ;

“provincial factor” in respect of a pension plan, for a fiscal year of a person that is a participating employer of the pension plan, means an amount (expressed as a percentage) determined by the formula

A × B.

For the purposes of the formula in the definition of “provincial factor” in the first paragraph,

(1)  A is the tax rate applicable, specified in the first paragraph of section 16, on the last day of the fiscal year; and

(2)  B is

(a)  where the person made contributions to the pension plan during the fiscal year that may be deducted by the person under section 137 of the Taxation Act in computing its income (in the third paragraph referred to as “pension contributions”) and the number of active members of the pension plan who were employees of the person on the last day of the last calendar year ending on or before the last day of the fiscal year (in this paragraph and the third paragraph referred to as the “particular day”) is greater than zero, the amount determined by the formula

[(C/D) + (E/F)]/2;

(b)  where subparagraph a does not apply and the number of active members of the pension plan who were employees of the person on the particular day is greater than zero, the amount determined by the formula

E/F; and

(c)  in any other case, zero.

For the purposes of the formulas in subparagraphs a and b of subparagraph 2 of the second paragraph,

(1)  C is the total of all pension contributions made to the pension plan by the person during the fiscal year in respect of employees of the person who were resident in Québec on the particular day;

(2)  D is the total of all pension contributions made to the pension plan by the person during the fiscal year in respect of employees of the person;

(3)  E is the number of active members of the pension plan who were, on the particular day, employees of the person and resident in Québec; and

(4)  F is the number of active members of the pension plan who were, on the particular day, employees of the person.

2011, c. 34, s. 146.