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First Session, Thirty-Ninth Legislature

This version is based on the printed bill that was distributed in the Legislature after First Reading.   It is not the official version.   If accuracy is critical, you can obtain a copy of the printed bill from Statutory Publications or view the online bilingual version (PDF).

Bill 28

THE BUDGET IMPLEMENTATION AND TAX STATUTES AMENDMENT ACT, 2007


Explanatory Note

(Assented to                                         )

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

PART 1

THE CORPORATION CAPITAL TAX ACT

C.C.S.M. c. C226 amended

1           The Corporation Capital Tax Act is amended by this Part.

2           Clause 4(3)(b) is amended by striking out "he fills orders which he receives" and substituting "the agent fills orders".

3(1)        Subsection 6(1) is amended

(a) in the part before clause (a), by adding "or (3)" after "subsection (2)";

(b) in the part of clause (b) before subclause (i), by adding "and ends before January 2, 2008," after "2007,"; and

(c) by striking out "or" at the end of subclause (a)(ii), adding "or" at the end of subclause (b)(iii) and adding the following after clause (b):

(c) if the fiscal year begins after January 1, 2008,

(i) 0.2% of its amount taxable as at the close of the fiscal year, if the amount taxable does not exceed $10,000,000.,

(ii) $20,000. plus 2.4% of its amount taxable as at the close of the fiscal year in excess of $10,000,000., if the amount taxable exceeds $10,000,000. but does not exceed $11,000,000., or

(iii) 0.4% of its amount taxable as at the close of the fiscal year, if the amount taxable exceeds $11,000,000.

3(2)        The following is added after subsection 6(2):

Tax payable by Crown corporation

6(3)        A Crown corporation with a permanent establishment in Manitoba must pay a tax for each fiscal year that begins after January 1, 2008, equal to 0.5% of its amount taxable as at the close of the fiscal year.

4           Section 15 is replaced with the following:

Deduction for capital used outside Manitoba

15          There may be deducted from the tax otherwise payable by a corporation for a fiscal year the amount determined by the following formula:

Deduction = T × P / A

In this formula,

T   is the tax otherwise payable for the fiscal year;

P   is the portion of the corporation's amount taxable as at the close of the fiscal year that is used by the corporation in jurisdictions outside Manitoba, determined in accordance with the regulations;

A   is the corporation's amount taxable as at the close of the fiscal year.

5           Sections 17 and 17.1 are replaced with the following:

Corporation to file return and pay tax

17(1)       For each fiscal year of a corporation in which it has a permanent establishment in Manitoba, the corporation, on or before the last day of the sixth month following the end of the fiscal year, must

(a) file a return with the minister; and

(b) pay to the minister the tax payable by the corporation for that year, less the total of the instalments paid by it on account of its tax payable for that year.

Quarterly instalments

17(2)       A corporation must pay quarterly instalments on account of its tax payable for a fiscal year if

(a) its estimated tax payable for that year exceeds $5,000. and it was not required to pay instalments for the immediately preceding fiscal year; or

(b) its tax payable for the immediately preceding fiscal year exceeded $5,000.

Due dates and amount of quarterly instalments

17(3)       The quarterly instalments payable under subsection (2) by a corporation for a fiscal year are payable on or before the 15th day of the 3rd, 6th, 9th and 12th months following the end of the immediately preceding fiscal year, and are equal to

(a) if clause (2)(a) applies, 25% of its estimated tax payable for that year; or

(b) if clause (2)(b) applies, 25% of the lesser of

(i) its estimated tax payable for that year, and

(ii) its tax payable for that preceding fiscal year.

Annual instalment

17(4)       If a corporation with tax payable for a fiscal year is not required to pay quarterly instalments for that year, the corporation must pay, as an instalment on account of the tax payable for that year, an amount equal to its tax payable for the immediately preceding fiscal year.  The instalment is payable on or before the last day of the third month following the end of the fiscal year.

Transitional

17(5)       When applying subsection (2) to a fiscal year commencing before January 2, 2008, the references in that subsection to "$5,000." shall be read as "$2,400.".

6           Sections 18 and 50 are repealed.

PART 2

THE GASOLINE TAX ACT

C.C.S.M. c. G40 amended

7           The Gasoline Tax Act is amended by this Part.

8           Section 1 is amended

(a) by repealing the definition "leaded gasoline"; and

(b) by adding the following definition:

"farm building" means a building used by a person, in the course of farming, exclusively for one or more of the following purposes:

(a) raising or keeping livestock for sale or for the sale of livestock products,

(b) growing crops — or storing crops grown by the person — for sale or for use as feed for livestock being raised or kept by the person for sale or for the sale of livestock products; (« bâtiment agricole »)

9           Clause 2(1)(a) is repealed.

10          Clauses 2.1(3)(c) and (d) are replaced with the following:

(c) for use only in heating or cooling a farm building; or

(d) for use only in drying crops with a grain dryer in the course of farming.

11          The following is added after subsection 2.2(3):

Refund of tax on gasoline used to produce electricity

2.2(3.1)    A purchaser of gasoline is entitled to a refund of the tax paid on that gasoline if

(a) the gasoline is used by the purchaser to produce electricity for sale; and

(b) the purchaser applies for the refund in accordance with subsection (4).

12(1)       Subsection 14(4) is amended by striking out "deemed to have been received by the collector during that period" and substituting "required to be remitted by the collector for that period".

12(2)       Subsections 14(5) and (6) are repealed.

13          Subsection 18.2(2) is amended by striking out everything after "Consolidated Fund" and substituting "from the proceeds of the tax."

14          Subsection 18.3(3) is replaced with the following:

Obligations re licence and decals

18.3(3)     When a qualified motor vehicle is operated in Manitoba under a carrier licence,

(a) the operator of the vehicle must

(i) carry a copy of the licence in the cab of the vehicle at all times,

(ii) produce the copy of the licence for inspection upon the request of a peace officer or other authorized person, and

(iii) ensure that carrier decals are affixed to the cab of the vehicle in accordance with the regulations; and

(b) the owner of the vehicle, if he or she is not the operator of it, must

(i) ensure that a copy of the licence is carried by the operator in the cab of the vehicle, and

(ii) ensure that carrier decals are affixed to the cab of the vehicle in accordance with the regulations.

15          The centred heading "RECORDS AND INFORMATION" before section 19 is replaced with "REFINERS' RETURNS".

16          Section 37 and the centred heading before it are repealed.

PART 3

THE HEALTH AND POST SECONDARY

EDUCATION TAX LEVY ACT

C.C.S.M. c. H24 amended

17          The Health and Post Secondary Education Tax Levy Act is amended by this Part.

18          The definition "remuneration" in section 1 is replaced with the following:

"remuneration" includes

(a) any payment, benefit or allowance the amount or value of which is required by subsection 5(1) or section 6 or 7 of the Income Tax Act (Canada) to be included, as income from an office or employment, in computing the income of a person, and

(b) the amount paid or value of anything contributed by an employer to a plan or trust for the benefit of one or more employees of the employer unless, upon the payment, provision or allocation of an amount or benefit under the plan or trust to or for the benefit of an employee, no amount would be required by subsection 5(1) or section 6 or 7 of the Income Tax Act (Canada) to be included, as income from an office or employment, in computing the income of the employee,

but does not include

(c) a pension, annuity or superannuation benefit paid to a former employee after his or her retirement, or

(d) the amount or value of a payment or benefit received by an employee from or under a plan or trust referred to in clause (b), if the amount or value of the employer's contributions to the plan or trust has been included as remuneration; (« rémunération »)

19          Subsection 2(6) is repealed.

20(1)       Subsection 3(3.10) is amended

(a) in the part before clause (a), by striking out "Where in a year after 1997" and substituting "Subject to subsection (3.10.1), where in a year";

(b) in the formula in clause (a), and in clauses (c) and (f), by striking out "$1,000,000." and substituting "$1,250,000."; and

(c) in clauses (d), (e) and (f), by striking out "4.5% or 4.3%, as the case may be," and substituting "4.3%".

20(2)       The following is added after subsection 3(3.10):

Transitional

3(3.10.1)   When applying subsection (3.10) to a year before 2008, the references in that subsection to "$1,250,000." shall be read as "$1,000,000.".

20(3)       Subsection 3(3.12) is replaced with the following:

Exemption

3(3.12)     No tax is payable by an employer under subsection (3.1.1) for

(a) a year before 2008, if the total remuneration paid by the employer for the year is $1,000,000. or less; or

(b) a year after 2007, if the total remuneration paid by the employer for the year is $1,250,000. or less.

20(4)       Subsection 3(3.14) is replaced with the following:

Notch provision

3(3.14)     The tax payable by an employer under subsection (3.1.1) is 4.3% of the amount by which the total remuneration paid by the employer for the year exceeds

(a) $1,000,000., if the year is before 2008 and that total remuneration is not more than $2,000,000.; or

(b) $1,250,000., if the year is after 2007 and that total remuneration is not more than $2,500,000.

21          Subsection 5(2.4.1) is replaced with the following:

Declaration of remuneration

5(2.4.1)    The minister may require an employer who is exempt under subsection 3(3.12) from tax for a year to file, before April 1 of the next year, a declaration as to the total remuneration paid by the employer for that year.

22          Sections 6 and 37 and clause 38(1)(b) are repealed.

PART 4

THE INCOME TAX ACT

C.C.S.M. c. I10 amended

23          The Income Tax Act is amended by this Part.

24(1)       Subsection 4(1) is amended by replacing Rule 4 with the following:

Rule 4

Determine the amount, if any, by which

(a) the total of the amounts determined under Rules 1 to 3;

exceeds

(b) the total of the individual's non-refundable tax credits determined under subsection 4.6(2) for the year.

24(2)       Subsection 4(1) is amended in Rule 7

(a) by replacing clause (g) with the following:

(g) if the individual is not a trust, the total of

(i) the individual's community enterprise development tax credit for the year determined under section 11.8, and

(ii) the individual's community enterprise investment tax credit for the year determined under section 11.13;

(b) by adding the following after clause (h):

(i) the amount, if any, claimed by the individual under section 4.9.1 (graduate's tuition fee income tax rebate).

25(1)       Subsection 4.1(2.4) is amended

(a) in the section heading, by striking out "and subsequent taxation years" and substituting "taxation year"; and

(b) in the part before the table, by striking out "and for each subsequent taxation year".

25(2)       The following is added after subsection 4.1(2.4):

Basic tax payable — 2008 and subsequent taxation years

4.1(2.5)    An individual's basic tax payable for the 2008 taxation year and for each subsequent taxation year is the amount determined according to the following table:

Taxable income (TI) Basic tax payable (BT)
$30,544. or less BT = 10.9% × TI
more than $30,544. but not more than $66,000. BT = $3,329. + 12.75% × (TI  $30,544.)
more than $66,000. BT = $7,850. + 17.4% × (TI $66,000.)

25(3)       Subsection 4.1(3) is amended by striking out "(2.3)" and substituting "(2.5)".

26(1)       Subsection 4.6(3) is amended

(a) by striking out "and" at the end of clause (b); and

(b) by replacing clause (c) with the following:

(c) $7,834. for a taxation year ending in or at the end of 2007; and

(d) $8,034. for a taxation year ending after 2007.

26(2)       Subsection 4.6(5) is amended by replacing everything after clause (b) with the following:

may claim

(c) for a taxation year ending after 2001 and before 2008, the amount determined by the following formula:

$6,482. − A + (the lesser of A and $649.)

(d) for a taxation year ending after 2007, the amount determined by the following formula:

$8,034. − A

In these formulas, A is the spouse's or partner's income for the year or, if the individual and the spouse or partner are living separate and apart at the end of the year because of a breakdown of their marriage or partnership, the spouse's or partner's income for the year while married or in the common-law partnership and not so separated.

26(3)       Subsection 4.6(6) is amended

(a) in the section heading, by striking out "Equivalent-to-spouse" and substituting "Eligible dependant"; and

(b) by striking out everything after clause (b) and substituting the following:

may claim

(c) for a taxation year ending after 2001 and before 2008, the amount determined by the following formula:

$6,482. − A + (the lesser of A and $649.)

(d) for a taxation year ending after 2007, the amount determined by the following formula:

$8,034. − A

In these formulas, A is the dependant's income for the year.

26(4)       The following is added after subsection 4.6(10):

Adoption costs

4.6(10.1)   An individual who is

(a) entitled to deduct an amount under subsection 118.01(2) of the federal Act for a taxation year beginning after 2005; and

(b) resident in Manitoba at the end of the taxation year;

may claim the amount that would be determined for B in the formula in that subsection if the amount in clause (a) of the description of B were "$10,000".

Children's fitness tax credit

4.6(10.2)   An individual who is resident in Manitoba on the last day of the taxation year may claim, for each of his or her children who is less than 16 years old at the end of the year, the lesser of $500. and the amount, if any, by which

(a) the total of all amounts each of which is an eligible fitness expense, as defined in subsection 118.03(1) of the federal Act, paid in the year by the individual, or by the individual's spouse or common-law partner, in respect of the child;

exceeds

(b) the total of all amounts each of which is an amount

(i) that relates to an eligible fitness expense included under clause (a) in respect of the child for the year, and

(ii) that any person is or was entitled to receive as a reimbursement, allowance or other form of assistance,

other than an amount that is included in computing the income for any taxation year of that person and is not deductible in computing the taxable income of that person.

Increased age limit for child with disability

4.6(10.3)   When applying subsection (10.2) to a child in respect of whom an individual is eligible to claim an amount under subsection (12) (dependant disability amount), the reference to "16 years" shall be read as "18 years".

Additional fitness credit for child with disability

4.6(10.4)   An individual who is entitled to claim amounts under subsections (10.2) and (12) in respect of a child may claim the additional amount of $500. if the amount claimed by the individual in respect of the child under subsection (10.2) for the taxation year is at least $100.

26(5)       Subsections 4.6(15.1) and (15.2) are repealed.

26(6)       The following is added after subsection 4.6(16):

Family tax benefit

4.6(16.1)   Subject to subsection (16.2), for a taxation year ending after 2007 an individual may claim the amount, if any, by which 9% of the individual's income for the year is exceeded by

(a) if the individual is a trust, $2,065.; or

(b) if the individual is not a trust, the total of $2,065. and the following amounts that apply:

(i) $2,065., if the individual has claimed an amount for the year under subsection (5) (claim re spouse or common-law partner) or under subsection (6) (eligible dependant amount),

(ii) $2,752. for each dependant in relation to whom the individual or the individual's spouse or common-law partner was, at any time in the year, an eligible individual (as defined in section 122.6 of the federal Act), other than a dependant in respect of whom an individual has claimed an amount for the year under subsection (6) (eligible dependant amount) or (7) (infirm dependant amount),

(iii) $2,752. for each dependant in respect of whom the individual has claimed an amount for the year under subsection (7) (infirm dependant amount),

(iv) $2,065., if the individual was at least 65 years old at the end of the year,

(v) $2,752., if the individual has claimed an amount for the year under subsection (11) (disability amount),

(vi) $2,752. for each individual in respect of whom the individual has claimed an amount for the year under subsection (12) (dependant disability amount),

(vii) $2,752., if the individual has claimed an amount for the year under subsection (16) in relation to a physical or mental impairment of the individual's spouse or common-law partner,

(viii) $2,065., if the individual claimed an amount for the year under subsection (16) in relation to an age credit deductible under subsection (4) by the individual's spouse or common-law partner.

Limitation

4.6(16.2)   In determining the amounts that may be included in computing the amount that may be claimed under subsection (16.1),

(a) if two individuals who are spouses or common-law partners of each other may otherwise include an amount in respect of the same dependant for a taxation year, only the individual with the greater income for the year may include it;

(b) if two or more individuals who are not spouses or common-law partners of each other may otherwise include an amount in respect of the same dependant for a taxation year, only one of them may include the amount and, if they cannot agree as to who will include it, only the individual with the greater income for the year may include it;

(c) if an individual becomes bankrupt in a calendar year, the total of the amounts that may be included under any provision of subsection (16.1) for the individual's taxation years ending in the calendar year shall not exceed the total of the amounts that would have been included under that provision for the calendar year if the individual had not become bankrupt; and

(d) the amount determined for C in the formula in subsection (16) shall be applied to reduce the amounts included in A and B in that formula in the same order in which those amounts must be deducted in computing the tax payable under this Act by the individual's spouse or common-law partner.

26(7)       Clause 4.6(20)(e) is amended in the part before subclause (i) by striking out "or (8)" and substituting ", (8), (10.1), (10.2) or (10.4)".

26(8)       Clause 4.6(20)(m) is replaced with the following:

(m) the amounts that may be claimed under subsections (3) to (19) must be claimed in the following order and before claiming any credit under sections 4.7 to 4.9:

(i) subsections (3) to (8), in any order,

(ii) subsections (9) to (19), in the order of those subsections;

27          Paragraphs 4.7(1)(b)(i)(A) and (B) are replaced with the following:

(A) 4.87% for the 2006 taxation year,

(B) 3.67% for the 2007 taxation year,

(C) 3.15% for a taxation year ending after 2007, and

28          The following is added after section 4.9 and before the next centred heading:

Graduate's tuition fee income tax rebate

4.9.1(1)    For the 2007 and subsequent taxation years, an individual who graduated after 2006 and is resident in Manitoba at the end of the taxation year may claim, as a tuition fee tax credit for the taxation year, an amount not exceeding the least of the following amounts:

(a) $2,500.;

(b) the amount, if any, that would be determined by Rule 7 of subsection 4(1) if that rule were read without reference to clause (i);

(c) an amount equal to 10% of the individual's eligible tuition amount at the end of the taxation year;

(d) the amount, if any, by which 60% of the individual's eligible tuition amount at the end of the taxation year exceeds the total of all amounts each of which is the tuition fee tax credit that was deducted in computing the individual's tax payable for one of the preceding 19 taxation years;

(e) $25,000. minus the total of all amounts each of which is the tuition fee tax credit that was deducted in computing the individual's tax payable for a preceding taxation year.

Definitions

4.9.1(2)    The following definitions apply in this section.

"eligible tuition amount" of an individual at the end of a taxation year (the "particular year") means the total of all amounts each of which is a tuition fee

(a) that was paid for a course that ended when the individual graduated or before that time;

(b) that was eligible for a tuition credit for a taxation year ending after 2003 and not more than 19 years before the particular year; and

(c) in respect of which the individual first claimed an amount under this section within 10 years after his or her first graduation after completing the course. (« frais de scolarité admissibles »)

"graduate" means complete all of the requirements for a degree, diploma, certificate of completion or other proof of graduation for a program or course of studies in respect of which the tuition fees or any part of them were eligible for tuition credits. (« obtenir un diplôme »)

"tuition credit" means an amount deductible under subsection 118.5(1) of the federal Act in computing an individual's tax payable under that Act. (« crédit d'impôt pour frais de scolarité »)

Application to deceased graduate

4.9.1(3)    When applying subsection (1) to the last taxation year of a deceased individual, it shall be read without reference to clauses (a) and (c).

29          Subsection 4.10(2) is amended

(a) in the section heading, by striking out "and subsequent" and substituting "to 2007"; and

(b) in the part before clause (a), by adding "and ending before 2008" after "2000".

30          Section 4.14 and subsection 4.16(1) are repealed.

31(1)       Subsection 5(1) is amended in the part before clause (a) by striking out "Subject to subsection (2)," and substituting "Subject to subsections (2) and (4),".

31(2)       Subclause 5(1)(a)(i) of the French version is amended by striking out "études" and substituting "l'éducation".

31(3)       The following is added after subsection 5(3):

No credit if return not filed

5(4)        No amount may be claimed under this section for an individual's taxation year if the individual has failed to file, under section 150 of the federal Act as it applies for the purposes of this Act, a return for the year within three years after the end of the year.

32          The centred heading before section 5.3 of the French version is amended by striking out "études" and substituting "l'éducation".

33          Section 5.3 is amended in clause (b) of the definition "family income" by striking out everything after "were included" and substituting "under subsection 56(6) of the federal Act (universal child care benefit) or deducted under paragraph 60(y) of that Act (repayment of universal child care benefit);".

34(1)       Subsection 5.4(3) is amended by replacing clause (b) of the description of A in the formula with the following:

(b) an amount determined by regulation for the year or, in the absence of such a regulation, the amount, if any, by which $675. exceeds the lesser of

(i) $150., and

(ii) 1% of the individual's family income for the year;

34(2)       Subsection 5.4(3) is further amended by replacing the description of B in the formula with the following:

B   is the municipal tax reduction given in respect of a principal residence of the individual for the year or part of the year plus, if the year is 2007, the amount, if any, of the remission granted to the individual under the Education Property Tax Remission Order, Manitoba Regulation 70/2007.

34(3)       Subsection 5.4(4) is amended

(a) by striking out "$275." and substituting "$150."; and

(b) by striking out "$400." and substituting "$275.".

35          Subsection 5.6(1) is replaced with the following:

Municipal tax reduction

5.6(1)      The municipal taxes imposed for a calendar year in respect of a principal residence of an individual who is, or whose spouse or common-law partner is, its assessed owner shall be reduced, in accordance with the regulations, by the lesser of

(a) $525. or any other amount prescribed by regulation for that year; and

(b) the amount by which those taxes exceed $250.

36          Section 5.7 of the French version is amended by striking out "études" and substituting "l'éducation" in clause (1)(d) and in the part of subsection (5) before the formula.

37          The table in subsection 7(3) is amended by replacing the last row with the following:

calendar year 2007 14% 11%
Jan. 1, 2008 to June 30, 2008 14% 12%
after June 30, 2008 13% 11%

38(1)       Clause 7.2(1.1)(b) is amended in the part before subclause (i) by striking out "35%" and substituting "subject to subsection (1.2), 50%".

38(2)       Subsection 7.2(1.2) is replaced with the following:

Transitional

7.2(1.2)    For taxation years ending before December 31, 2008, the reference in clause (1.1)(b) to "50%" is to be read as follows:

(a) for a taxation year ending after March 8, 2005, and before March 7, 2006, it is to be read as "20%";

(b) for a taxation year ending after March 6, 2006, and before January 1, 2008, it is to be read as "35%";

(c) for a taxation year ending in 2008, it is to be read as "35%" in respect of property acquired before 2008 and as "50%" in respect of property acquired in 2008.

39          Clause 7.5(3)(e) is amended by striking out "2008" and substituting "2011".

40(1)       Subsection 7.6(1) is amended in the part before the formula by striking out "subsection (2)" and substituting "subsections (2) and (4)".

40(2)       The following is added after subsection 7.6(3):

Nil tax credit for registered production that does not meet eligible film requirements

7.6(4)      The tax credit for a production that was registered as an eligible film before completion of production is nil if, after reviewing the corporation's application for the tax credit, the minister is satisfied that the production did not meet all the requirements for registration as an eligible film.

41          Clause 10.1(8)(d) of the French version is amended by striking out "de la taxe" and substituting "de l'impôt".

42          The following is added after section 10.2:

GREEN ENERGY EQUIPMENT TAX CREDIT

Manufacturer's refundable green energy equipment tax credit

10.3(1)     An eligible manufacturer is deemed to have paid on account of its tax payable under this Act for a taxation year an amount, not exceeding the amount determined under the regulations, in respect of any qualifying machinery or equipment manufactured by the manufacturer that it sold in the year for use in producing energy in Manitoba from any of the following renewable resources:

(a) solar energy;

(b) wind power;

(c) hydrogen;

(d) geothermal energy;

(e) any other resource prescribed by regulation.

Purchaser's refundable green energy equipment tax credit

10.3(2)     An eligible taxpayer is deemed to have paid on account of his or her tax payable under this Act for a taxation year an amount, not exceeding the amount determined under the regulations, in respect of specified machinery or equipment purchased by the taxpayer and first used or made available for use by him or her in the year to produce energy in Manitoba from any of the following renewable resources:

(a) solar energy;

(b) hydrogen;

(c) geothermal energy;

(d) any other resource prescribed by regulation.

Regulations

10.3(3)     The Lieutenant Governor in Council may make regulations respecting the tax credits provided for in this section, including regulations

(a) defining any term or expression used in this section, including "eligible manufacturer", "eligible taxpayer", "qualifying machinery or equipment" and "specified machinery or equipment";

(b) prescribing additional resources for the purpose of subsection (1) or (2) or both;

(c) prescribing a formula or other method for calculating the tax credit for an eligible manufacturer under subsection (1);

(d) prescribing a formula or other method for calculating the tax credit for an eligible taxpayer under subsection (2);

(e) enabling eligible manufacturers to assign all or any part of their tax credits under subsection (1) and establishing restrictions or conditions for such assignments;

(f) establishing classes of qualifying machinery or equipment;

(g) respecting the provision of information by

(i) a manufacturer of qualifying machinery or equipment, or

(ii) a purchaser of specified machinery or equipment,

to the minister appointed by the Lieutenant Governor in Council to administer this section;

(h) respecting the provision of information, for the purposes of the tax credit under subsection (2), by a manufacturer or other seller of specified machinery or equipment to a purchaser of it;

(i) providing for the recovery of all or any part of a tax credit claimed under subsection (1) in respect of machinery or equipment that was sold by an eligible manufacturer for use in Manitoba but was not used or made available for use in Manitoba within a prescribed time after the date of sale;

(j) providing for the recovery of all or any part of a tax credit claimed under subsection (2) in respect of machinery or equipment that was purchased by an eligible taxpayer for use in Manitoba but was not used or made available for use in Manitoba within a prescribed time after the date of purchase;

(k) respecting any other matter that the Lieutenant Governor in Council considers necessary or desirable for the purposes of this section or for measuring the effectiveness of the tax credits under this section.

Regulations for determining amounts of tax credits

10.3(4)     The formulas or other methods of calculating tax credits that may be prescribed under clauses (3)(c) and (d)

(a) may be different for different classes of qualifying machinery or equipment;

(b) may be different for different classes of specified machinery or equipment; and

(c) must not result in

(i) a credit under subsection (1) for any item of machinery or equipment, other than an item used to produce energy from wind power, exceeding 10% of the price at which the item was sold by the manufacturer, or

(ii) a credit under subsection (2) for any item of machinery or equipment, exceeding 10% of the purchase price paid by the eligible taxpayer for that item, less any credit that an eligible manufacturer has claimed or may claim under subsection (1) in respect of the item.

43          Clause 11.12(1)(c) of the French version is amended by striking out "prendre des mesures" and substituting "établir des exigences".

44           The following is added after section 11.12:

COMMUNITY ENTERPRISE INVESTMENT TAX CREDIT

Definitions

11.13(1)    The following definitions apply in this section and sections 11.14 to 11.17.

"CEI tax credit" of an eligible investor for a taxation year means the investor's community enterprise investment tax credit determined under subsection (3) for the year. (« crédit d'impôt pour placement dans une entreprise communautaire »)

"CEI tax credit receipt" means a receipt, in a form authorized by the responsible minister, that contains prescribed information concerning an eligible investment issued to an eligible investor or to a flow-through entity in which an eligible investor has an interest. (« reçu relatif au crédit d'impôt pour placement dans une entreprise communautaire »)

"eligible investment" means an eligible investment as defined in the regulations. (« placement admissible »)

"eligible investor", in relation to an investment, means

(a) a corporation that

(i) at the time of making the investment, is a taxable Canadian corporation with a permanent establishment in Manitoba,

(ii) is not a prescribed venture capital corporation or prescribed labour-sponsored venture capital corporation under Part LXVII of the federal regulations, and

(iii) in the taxation year in which it makes the investment, paid salary and wages to employees resident in Manitoba totalling not less than 25% of the total salary and wages paid by it in that year; and

(b) an individual other than

(i) a trust, or

(ii) an individual acting in his or her capacity as an investment dealer under The Securities Act. (« investisseur admissible »)

"responsible minister" means the minister appointed by the Lieutenant Governor in Council to administer sections 11.13 to 11.17. (« ministre responsable »)

Deduction from tax otherwise payable

11.13(2)    An eligible investor may deduct (under Rule 7 of subsection 4(1), in the case of an individual) from the tax otherwise payable by the investor for a taxation year ending after 2007 the amount of the investor's CEI tax credit for the year.

Tax credit

11.13(3)    An eligible investor's community enterprise investment tax credit for a taxation year is the lesser of $45,000. and the total of the following amounts:

(a) the lesser of $45,000. and 30% of all amounts each of which is

(i) the cost to the investor of an eligible investment issued to the investor in the taxation year and before 2011, or

(ii) the investor's share, as determined under the regulations, of the cost to a flow-through investment vehicle of an eligible investment issued to it in the investor's taxation year and before 2011;

(b) the amount, if any, by which

(i) the total of all amounts each of which is the amount determined under clause (a) for any of the 10 immediately preceding taxation years or any of the three immediately following taxation years,

exceeds

(ii) the total of all amounts each of which is,

(A) if the investor is an individual, the amount that would be determined under Rule 7 of subsection 4(1) for any of those preceding or following taxation years if the individual's CEI tax credit for that year were nil, or

(B) if the investor is a corporation, the total of all amounts each of which is the amount that would be the corporation's tax payable for any of those preceding or following taxation years if the corporation's CEI tax credit for that year were nil.

Interpretation

11.13(4)    For the purpose of subsection (3),

(a) if the eligible investor irrevocably subscribed and paid for an eligible investment before acquiring it, the acquisition of it is deemed to have occurred when it was irrevocably subscribed and paid for; and

(b) the cost to an individual of an eligible investment that also qualifies as an eligible investment of the individual under section 11.8 is the amount, if any, by which the cost otherwise determined exceeds $30,000.

Issuer must provide receipt

11.13(5)    The issuer of an eligible investment to an eligible investor must provide a CEI tax credit receipt to the investor no later than the 60th day after the end of the year in which the investment was acquired by the investor.

Proof of credit

11.13(6)    An eligible investor is not entitled to a credit under this section unless the amount for which the credit is claimed is proven by filing a CEI tax credit receipt with the Minister of National Revenue.

Use of eligible investment proceeds

11.14(1)    The issuer of an eligible investment must use or invest the proceeds of the issuance in accordance with the regulations.

Minister may assess penalty

11.14(2)    If satisfied that the issuer has not used or invested the proceeds in accordance with the regulations, the responsible minister may, by written order, require the issuer to pay to the Minister of Finance for Manitoba a penalty not exceeding 30% of the proceeds that were not used or invested as required.

Restriction on transfers

11.15        An eligible investment must not be transferred except as permitted by the regulations.

Recovery of credit on early redemption or return of capital

11.16(1)    Subject to subsection (2) and the regulations, if, within three years after the day that an eligible investment is issued, the investment is redeemed or an amount is paid to its holder as a return of capital, the person who held the investment immediately before the redemption or payment (referred to in this section as the "holder") must pay a tax equal to the lesser of

(a) 30% of the amount of the consideration for which the investment was issued; and

(b) the amount that would, but for subsection (3), be payable to the holder on the redemption or as a return of capital.

Exceptions

11.16(2)    Subsection (1) does not apply

(a) in respect of an investment if no CEI tax credit has been claimed for it and the CEI tax credit receipt for the investment has been returned to the issuer of the investment; or

(b) to a redemption of an investment if it occurs at the written request of the holder and the investment devolved on the holder as a consequence of the death of an individual who held the investment.

Withholding and remittance of tax

11.16(3)    If tax is payable under subsection (1) in respect of an eligible investment, the issuer of the investment must

(a) withhold the amount of the tax from the amount otherwise payable to the holder;

(b) issue to the holder a receipt showing the amount of tax withheld;

(c) within 30 days after the transaction, remit the withheld amount to the Minister of Finance for Manitoba on behalf of the holder; and

(d) submit with the remitted amount a statement containing prescribed information.

Liability for tax

11.16(4)    If the issuer fails to withhold and remit an amount as required by subsection (3), the issuer is liable to pay the amount to the Minister of Finance for Manitoba on behalf of the holder, and is entitled to recover the amount so paid from the holder.

Interpretation

11.16(5)    For the purpose of this section,

(a) a share in the capital stock of a corporation is redeemed when it is redeemed, acquired or cancelled by the corporation or is acquired by a person who does not deal with the corporation at arm's length; and

(b) if a share in the capital stock of a corporation is converted into another share in the capital stock of the corporation, the other share is deemed to be the same share as, and to have been issued at the same time as, the original share.

Regulations

11.17(1)    The Lieutenant Governor in Council may make regulations

(a) defining "eligible investment" and any other term used in sections 11.13 to 11.16 but not defined;

(b) respecting the use of the proceeds of issuing eligible investments;

(c) establishing recordkeeping and reporting requirements for issuers of eligible investments;

(d) prescribing information to be included on CEI tax credit receipts;

(e) prescribing circumstances in which eligible investments may be transferred;

(f) imposing a tax or penalty on the issuer of an eligible investment in circumstances where

(i) the issuer fails to comply with any requirement prescribed under this section,

(ii) the issuer allows the investment to be transferred contrary to section 11.15, or

(iii) the investment ceases to be an eligible investment within three years after the day it was issued;

(g) respecting subsection 11.16(1) (recovery of credit), including regulations that

(i) exempt transactions from that subsection, or

(ii) reduce the amount otherwise payable under that subsection;

(h) enabling eligible investors to earn CEI tax credits in respect of an eligible investment acquired by a flow-through investment vehicle, such as a partnership or trust, to which they have contributed the capital required for the investment, including regulations that

(i) establish recordkeeping and reporting requirements for such investment vehicles,

(ii) extend the application of sections 11.15 and 11.16, with necessary changes, to investments in such investment vehicles, and

(iii) impose a tax or penalty on a flow-through investment vehicle or its investors for any failure to comply with section 11.15 or 11.16 or any regulation made under this section;

(i) modifying, extending or limiting the application of sections 11.13 to 11.16 to a corporation and its shareholders in the event of a reorganization, merger or amalgamation or a plan of arrangement under The Corporations Act;

(j) respecting any other matter that the Lieutenant Governor in Council considers necessary or advisable for the proper administration of the CEI tax credit.

Administration and enforcement

11.17(2)    For the purpose of administering and enforcing sections 11.13 to 11.16 and the regulations made under this section, the responsible minister has all the powers conferred by this Act on the Minister of Finance for Manitoba or the Minister of National Revenue in relation to the administration or enforcement of any other provision of this Act.

Delegation

11.17(3)    The responsible minister may delegate to one or more persons employed in the government, or to the administrator appointed under section 10.1 of The Labour-Sponsored Venture Capital Corporations Act, any power conferred or duty imposed on the responsible minister under subsection (2) or sections 11.13 to 11.16, or under the regulations made under this section.

45          Section 53.1 is replaced with the following:

General anti-avoidance rule

53.1(1)     The following definitions apply in this section.

"avoidance transaction" means a transaction

(a) that, but for this section, would result, directly or indirectly, in a tax benefit; or

(b) that is part of a series of transactions, which series, but for this section, would result, directly or indirectly, in a tax benefit;

but does not include a transaction that may reasonably be considered

(c) to have been undertaken or arranged primarily for bona fide purposes other than

(i) to obtain a tax benefit,

(ii) to reduce, avoid or defer a tax, or an amount payable as or in respect of tax, under any other Act of the Legislature or under any Act of Parliament or of any other legislature in Canada,

(iii) to increase a refund of tax, or of an amount in respect of tax, under any Act referred to in subclause (ii), or

(iv) any combination of the purposes mentioned in subclauses (i) to (iii); or

(d) to be a transaction that would not result, directly or indirectly, in

(i) a misuse of the provisions of this Act or the regulations, or

(ii) an abuse having regard to those provisions, other than this section, read as a whole. (« opération d'évitement »)

"tax benefit" means

(a) a reduction, avoidance or deferral of tax or of any other amount payable under this Act; or

(b) an increase in a refund of tax or of any other amount under this Act. (« avantage fiscal »)

"tax consequences" to a person means

(a) the amount of

(i) the person's income, loss or taxable income,

(ii) in the case of an individual, the individual's Manitoba income or the individual's income for the year, as defined in section 1,

(iii) in the case of a corporation, the corporation's taxable income earned in the year in Manitoba, as defined in subsection 7(5),

(iv) the person's taxable income earned in Canada, or

(v) the tax or other amount payable by or refundable to the person under this Act; and

(b) any amount that is relevant for computing an amount referred to in clause (a). (« attribut fiscal »)

"tax notice" means a notice of assessment, reassessment, additional assessment or determination under section 14 or 15 that reflects the application of subsection (2) or (5) in relation to a transaction or series of transactions. (« avis d'imposition »)

"transaction" includes an arrangement or event. (« opération »)

Tax consequences to be determined

53.1(2)     If a transaction is an avoidance transaction, the tax consequences to a person must be determined in a manner that is reasonable in the circumstances in order to deny a tax benefit that, but for this section, would result, directly or indirectly, from that transaction or from a series of transactions that includes that transaction.

Additional rules for determining tax consequences

53.1(3)     Without limiting subsection (2), in determining the tax consequences under that subsection,

(a) any amount deducted in computing an amount referred to in clause (a) or (b) of the definition of "tax consequences" in subsection (1) may be allowed or disallowed in whole or in part;

(b) any deduction referred to in clause (a) of this subsection or any other amount used in determining an amount payable or refundable under this Act may be allocated to any person;

(c) the nature of any payment or other amount may be recharacterized; and

(d) the tax effects that would otherwise result from the application of other provisions of this Act or the regulations may be ignored.

Request for determination of tax consequences

53.1(4)     If a tax notice reflecting the application of subsection (2) to a transaction or series of transactions has been sent to a person, another person may, within 180 days after the date of the mailing of that notice, request in writing that the minister determine or redetermine the tax consequences to that other person that can reasonably be considered to relate to that transaction or series of transactions.

Minister's response to request

53.1(5)     Upon receiving a request under subsection (4), the minister must consider the request and determine or redetermine the tax consequences to the person making the request that can reasonably be considered to relate to the transaction or series of transactions to which the request relates.

Method of determining tax consequences

53.1(6)      The tax consequences to any person resulting from the application of this section may be determined only through a tax notice.

Conferral of benefit

53.1.1      Section 246 of the federal Act applies for the purposes of this Act.

PART 5

THE INSURANCE

CORPORATIONS TAX ACT

C.C.S.M. c. I50 amended

46          The Insurance Corporations Tax Act is amended by this Part.

47          The following is added after subsection 8(5):

Treasurer may waive penalty

8(6)        If the treasurer is satisfied that exceptional circumstances prevented an insurer or other person liable under this Act for the payment of tax from paying or remitting all or any part of the tax when it was due, the treasurer may waive all or any part of

(a) the interest accruing on that tax; or

(b) a penalty imposed under this section.

48          The following is added after section 8:

Refund of overpayment

8.1(1)      A person is entitled to a refund, without interest, of an amount paid by the person as tax, if

(a) the amount was not payable as tax and is not otherwise refundable under this Act; and

(b) the person applies to the treasurer for the refund within two years after the day the amount was paid.

No other right of recovery

8.1(2)      No person has a right of action or other remedy against the government for the recovery of an amount paid as or on account of tax under this Act, unless the person is entitled under this Act to a refund of the amount.

49          Section 28 is repealed.

PART 6

THE MINING TAX ACT

C.C.S.M. c. M195 amended

50          Section 24 of The Mining Tax Act is repealed.

PART 7

THE MOTIVE FUEL TAX ACT

C.C.S.M. c. M220 amended

51          The Motive Fuel Tax Act is amended by this Part.

52          Section 1 is amended

(a) by repealing the definitions "farm buildings" and "farm stock";

(b) by replacing the definition "1-K Kerosine" in the English version with the following:

"1-K Kerosene" means a grade of kerosene that is refined to a standard as fixed by the Canadian General Standards Board; (« kérosène 1-K »)

(c) by replacing the definition "motive fuel" with the following:

"motive fuel" means

(a) any fuel that is purchased for use in powering a diesel or jet engine,

(b) kerosene, bunker fuel or crude oil, if it is purchased only for heating, and

(c) any other fuel designated in the regulations as motive fuel; (« carburant »)

(d) by adding the following definition:

"biodiesel" means an ester-based oxygenated fuel that is derived from vegetable oils, animal fats or other biomass material; (« biodiesel »)

(e) by adding the following definition:

"farm building" means a building used by a person, in the course of farming, exclusively for one or more of the following purposes:

(a) raising or keeping livestock for sale or for the sale of livestock products,

(b) growing crops — or storing crops grown by the person — for sale or for use as feed for livestock being raised or kept by the person for sale or for the sale of livestock products; (« bâtiment agricole »)

53(1)       Clauses 2.1(1)(b) and (c) are replaced with the following:

(b) for use only in heating or cooling a farm building; or

(c) for use only in drying crops with a grain dryer in the course of farming.

53(2)       Clause 2.1(2)(f) of the English version is amended by replacing the part before subclause (ii) with the following:

(f) for use only in operating an engine exclusively off-highway

(i) to recover ore, or

53(3)       Subsection 2.1(7) of the English version is amended in the section heading and in the subsection by striking out "Kerosine" and substituting "Kerosene".

53(4)       The following is added after subsection 2.1(7):

Exemption for biodiesel produced in Manitoba

2.1(8)      No tax is payable on

(a) biodiesel purchased before April 1, 2011; or

(b) the biodiesel portion of blended motive fuel purchased before April 1, 2011;

if the biodiesel is produced in Manitoba and meets the requirements of American Society for Testing and Materials International Standard D 6751, Standard Specification for Biodiesel Fuel Blend Stock (B100) for Middle Distillate Fuels, as amended from time to time.

54          The following is added after subsection 2.2(3):

Refund of tax on motive fuel used to produce electricity

2.2(3.1)    A purchaser of motive fuel is entitled to a refund of the tax paid on that motive fuel if

(a) the motive fuel is used by the purchaser to produce electricity for sale; and

(b) the purchaser applies for the refund in accordance with subsection (4).

55(1)       Subsection 15(4) is amended by striking out "deemed to have been received by the collector during that period" and substituting "required to be remitted by the collector for that period".

55(2)       Subsections 15(5) and (6) are repealed.

56          Subsection 19.2(2) is amended by striking out everything after "Consolidated Fund" and substituting "from the proceeds of the tax."

57          Subsection 19.3(3) is replaced with the following:

Obligations re licence and decals

19.3(3)     When a qualified motor vehicle is operated in Manitoba under a carrier licence,

(a) the operator of the vehicle must

(i) carry a copy of the licence in the cab of the vehicle at all times,

(ii) produce the copy of the licence for inspection upon the request of a peace officer or other authorized person, and

(iii) ensure that carrier decals are affixed to the cab of the vehicle in accordance with the regulations; and

(b) the owner of the vehicle, if he or she is not the operator of it, must

(i) ensure that a copy of the licence is carried by the operator in the cab of the vehicle, and

(ii) ensure that carrier decals are affixed to the cab of the vehicle in accordance with the regulations.

58(1)       The centred heading "RECORDS AND INFORMATION" before section 20 is replaced with "REFINERS' RETURNS".

58(2)       Subsection 20(3) is repealed.

59          Section 36 and the centred heading before it are repealed.

PART 8

THE PROPERTY TAX AND

INSULATION ASSISTANCE ACT

C.C.S.M. c. P143 amended

60          The Property Tax and Insulation Assistance Act is amended by this Part.

61          The definition "applicable percentage" in subsection 16.1(1) is amended

(a) in clause (b), by striking out "or a subsequent"; and

(b) by striking out "and" at the end of clause (a) and adding the following after clause (b):

(c) in relation to the 2007 taxation year, 65%;

(d) in relation to the 2008 taxation year, 70%;

(e) in relation to the 2009 taxation year, 75%; and

(f) in relation to a taxation year after 2009, 80%.

PART 9

THE RETAIL SALES TAX ACT

C.C.S.M. c. R130 amended

62          The Retail Sales Tax Act is amended by this Part.

63(1)       Subsection 1(1) is amended

(a) by adding the following definitions:

"dwelling unit" means

(a) a house, apartment, suite, or separate portion of a multiple dwelling, occupied by a single family or a group of persons living as a single family or household, or

(b) an apartment block or other multiple dwelling containing not more than four apartments, suites, or other self-contained domestic establishments; (« résidence »)

"family member" of a person means any of the following:

(a) a parent, grandparent, child or grandchild of the person,

(b) the spouse or common-law partner of

(i) the person, or

(ii) a parent or child of the person,

(c) a parent or child of the person's spouse or common-law partner; (« membre de la famille »)

"farm building" means a building used by a person, in the course of farming, exclusively for one or more of the following purposes:

(a) raising or keeping livestock for sale or for the sale of livestock products,

(b) growing crops — or storing crops grown by the person — for sale or for use as feed for livestock being raised or kept by the person for sale or for the sale of livestock products; (« bâtiment agricole »)

"piped gas" means natural or manufactured gas that is used as fuel and is delivered to the purchaser by means of a gas pipe distribution system; (« gaz canalisé »)

(b) in the definition ""purchase price" or "sale price"", by replacing everything after clause (b) with the following:

(c) any tax, levy or duty imposed by any level of government in respect of the sale or in respect of the tangible personal property or the taxable service that is the subject of the sale, and paid or collected by the seller, other than

(i) a tax under this Act,

(ii) the goods and services tax under Part IX of the Excise Tax Act (Canada), and

(iii) any tax or levy imposed by a municipality in respect of electricity or piped gas,

whether or not the charges, costs, tax, levy, or duty included by clauses (a), (b), and (c) are shown separately on any invoice or in the books of the seller or of the purchaser;

(c) in the definition "sale", by replacing clause (i) with the following:

(i) a gift or other transfer of title for no consideration, other than

(i) a transfer under a bequest or by devolution of an estate, and

(ii) a gift of property by a person (the "donor") to a charitable organization or to a family member of the donor, if

(A) the donor paid the tax on the fair value of the property as at the date of purchase by the donor,

(B) the donor acquired the property under a bequest or by devolution of an estate,

(C) the donor was exempted by clause 3(1)(y) (settler's effects) from having to pay the tax on the property, or

(D)  the donor acquired the property as a gift from a family member of the donor who paid the tax on the fair value of the property, and, if the property is a vehicle and the donor is giving it to a family member, the donor so acquired it at least 12 months earlier or from a family member who is also a family member of the person to whom the donor is transferring the vehicle, and

(d) in the definition "sale", by adding the following after clause (j):

but does not include a transfer of property to an insurer as part of the settlement of an insurance claim;

(e) in the definition "tangible personal property",

(i) by replacing clause (a) with the following:

(a) personal property that can be measured in any way or is perceptible to the senses in any way,

(ii) in clause (b), by striking out "and apparatus, including storage structures," and substituting ", an apparatus or a storage structure — other than a warehouse, grain elevator or other storage building prescribed by regulation — that is"; and

(f) in the definition "vendor", by striking out "or" at the end of clause (d) and adding the following after clause (e):

(f) as a broker or agent for a vendor, enters into an agreement for the sale of tangible personal property or a taxable service, or

(g) as a broker or agent for a vendor, arranges for the delivery of piped gas.

63(2)       The following is added after subsection 1(1.2):

"Common-law partner" defined

1(1.3)      For the purpose of the definition "family member" in subsection (1), "common-law partner" of a person means another person

(a) with whom the person has a common-law relationship registered under section 13.1 of The Vital Statistics Act; or

(b) who, not being married to the person, is cohabiting with him or her in a conjugal relationship, and has so cohabited with him or her

(i) for a period of at least three years, or

(ii) for a period of at least one year, if they are together the parents of a child.

63(3)       Subsection 1(2) is amended in the part before clause (a) by striking out "When machinery, equipment or apparatus, or a system or component," and substituting "When property referred to in any of clauses (b) to (d) of the definition "tangible personal property"".

64(1)       Subsection 2(1.1) is amended in the part before clause (a) by striking out "by the purchaser".

64(2)       The following is added after subsection 2(1.1):

Reduced rate for mixed uses of electricity

2(1.2)       Despite subsection (1), the tax payable on the purchase of electricity is computed at the rate of 1.4% of its fair value if some but not all of the electricity is used for

(a) heating a dwelling unit

(i) in which the purchaser resides, and

(ii) that has the permanently installed capability of being fully heated by electricity;

(b) heating or cooling a building that would qualify as a farm building if the reference to "exclusively" in the definition "farm building" in subsection 1(1) were read as "principally"; or

(c) producing heat for drying crops with a grain dryer in the course of farming.

Reduced rate for mixed uses of piped gas

2(1.3)      Subsection (1.2) applies to the purchase of piped gas as if the references in that subsection to "electricity" were read as "piped gas".

Reduced rate for electricity used by oil well operators

2(1.4)      Despite subsection (1), the tax payable on the purchase of electricity is computed at the reduced rate of 1.4% of its fair value if the electricity is

(a) purchased by an oil well operator; and

(b) used by the operator for operating machinery and equipment at a completed well site for the production of oil or gas;

and the minister has approved the use of the reduced rate.

Qualifying manufacturer

2(1.5)      For the purposes of subsections (1.7) to (1.11), a person is a qualifying manufacturer at a particular time if he or she is carrying on a manufacturing or processing business in Manitoba at that time and meets the following conditions in relation to the last fiscal year that ended before that time:

(a) the total of the person's

(i) cost of manufacturing and processing capital for the fiscal year, and

(ii) cost of manufacturing and processing labour for the fiscal year,

is more than 50% of the total of the person's

(iii) cost of capital for the fiscal year, and

(iv) cost of labour for the fiscal year; and

(b) the person's revenue for the fiscal year from retail sales in Manitoba to individuals for their own use or consumption is less than 50% of the person's revenue for the year from all operations in Manitoba.

How to determine costs

2(1.6)      The costs referred to in clause (1.5)(a) are to be determined in accordance with section 5202 of the Income Tax Regulations (Canada), with the following changes:

(a) the references to "corporation" are to be read as "person";

(b) the references to "taxation year" are to be read as "fiscal year";

(c) the references to "Canada" in the following provisions are to be read as "Manitoba":

(i) paragraph (c) of the definition "cost of capital",

(ii) paragraph (d) of the definition "cost of labour",

(iii) paragraphs (a) and (b) of the definition "qualified activities";

(d) the definition "cost of manufacturing and processing capital" is to be read without reference to "100/85 of";

(e) the definition "cost of manufacturing and processing labour" is to be read without reference to "100/75 of";

(f) the definition "qualified activities" is to be read as if the activity of extracting minerals from a mineral resource for processing were included, and the following activities were excluded:

(i) scientific research and experimental development,

(ii) activities of a person who in the fiscal year receives more than 50% of his or her funding directly or indirectly from the Government of Canada, the Government of Manitoba or a municipality, or from any combination of them.

Reduced rate for electricity used in manufacturing or mining

2(1.7)      Despite subsection (1), the tax payable on the purchase of electricity is computed at the reduced rate of 1.4% of its fair value if the electricity is

(a) purchased by a qualifying manufacturer; and

(b) used by the qualifying manufacturer for operating manufacturing machinery or equipment the cost of which is included in the manufacturer's cost of manufacturing and processing capital under clause (1.5)(a);

and the minister has approved the use of the reduced rate.

Minister may approve use of reduced rate

2(1.8)      Upon application by an oil well operator or qualifying manufacturer, the minister may approve the use of the reduced rate under subsection (1.4) or (1.7).

If reduced rate approved

2(1.9)      If the minister approves the use of the reduced rate,

(a) the minister must notify the vendor and the oil well operator or qualifying manufacturer that the reduced rate applies; and

(b) the reduced rate applies to the operator or manufacturer for each billing period beginning after the minister receives

(i) the application, and

(ii) any additional information that he or she requires to be satisfied that the operator or manufacturer qualifies for the reduced rate.

When reduced rate no longer applies

2(1.10)     The reduced rate under subsection (1.4) or (1.7) ceases to apply to the person when he or she ceases to be an oil well operator or qualifying manufacturer.

Notice of change

2(1.11)     When a person to whom the reduced rate under subsection (1.4) or (1.7) applies ceases to qualify for the reduced rate, or ceases to use the electricity for the purpose that qualifies for the reduced rate, the person must immediately notify the minister and the vendor of that fact.

64(3)       Subsection 2(2) is amended

(a) in clause (a), by adding "other than electricity or piped gas" after "tangible personal property"; and

(b) in clause (b), by adding "electricity or piped gas," after "taxable service,".

64(4)       Subsection 2(3) is amended by striking out "subsection (2)" and substituting "subsections (1), (1.1) and (2)".

64(5)       Subsection 2(5.3) is replaced with the following:

Property brought into Manitoba for temporary use

2(5.3)      A person who

(a) brings tangible personal property — other than a multijurisdictional vehicle, railway rolling stock to which subsection 5(4) applies or an aircraft — into Manitoba for temporary use in Manitoba; and

(b) satisfies the minister that the property is expected to be used in Manitoba for a period of not more than 36 months;

may pay tax under subsection (5.3.1) in respect of its use in Manitoba.

Calculation and payment of tax for temporary use

2(5.3.1)    A person who has chosen to pay tax under this subsection

(a) is not required to pay tax under subsection (1) in respect of the portion of the fair value of the property that it is not attributable to the cost of bringing the property into Manitoba or relocating it in Manitoba or of assembling or installing it in Manitoba;

(b) must pay tax under subsection (1) in respect of the remaining portion of the fair value of the property;

(c) must pay, for each calendar month in which the property is used by the person in Manitoba, a tax equal to

(i) if the property is owned by the person, 7% of 1/36th of the portion of its fair value referred to in clause (a), or

(ii) if the property is leased to or rented by the purchaser, 7% of the amount of the monthly lease or rental payments or, if they are not payable monthly, the monthly equivalent of those payments; and

(d) must report the use of the property and remit the tax in accordance with the regulations.

Opting out of monthly tax payments

2(5.3.2)    A person who has chosen to pay tax under subsection (5.3.1) in respect of a property may opt out of paying tax under that subsection by remitting to the minister, as a final payment on or before the 20th day of any month, the amount determined by the following formula:

final payment = (T + I1) − (Tm + I2)

In this formula,

T   is the tax that, because of clause (5.3.1)(a), was not payable under subsection (1) in respect of the property;

I1is the amount of interest that would have accrued to the end of the immediately preceding month on the amount determined for T if it were a tax debt under The Tax Administration and Miscellaneous Taxes Act;

Tmis the total of the monthly tax payments made under clause (5.3.1)(c) in respect of the property;

I2is the equivalent of interest on the monthly tax payments made under clause (5.3.1)(c) to the end of the immediately preceding month, calculated using the same rate or rates of interest that are used in calculating the amount for I1.

64(6)       Clause 2(5.7)(b) of the English version is amended in subclause (ii) of the description of V in the formula by striking out "the" before "those".

64(7)       The following is added after subsection 2(5.7):

Opting out of monthly tax payments

2(5.8)      A person who has chosen to pay tax under clause (5.7)(b) in respect of an aircraft may opt out of paying tax under that clause by remitting to the minister, as a final payment on or before the 20th day of any month, the amount determined by the following formula:

final payment = (T + I1) − (Tm + I2)

In this formula,

T   is the tax that would otherwise have been payable under subsection (1) in respect of the property;

I1is the amount of interest that would have accrued to the end of the immediately preceding month on the amount determined for T if it were a tax debt under The Tax Administration and Miscellaneous Taxes Act;

Tmis the total of the monthly tax payments made under clause (5.7)(b) in respect of the property;

I2is the equivalent of interest on the monthly tax payments made under clause (5.7)(b) to the end of the immediately preceding month, calculated using the same rate or rates of interest that are used in calculating the amount for I1.

65          Subsection 2.2(4) is amended

(a) by repealing clauses (b), (c) and (d); and

(b) in clause (g), by striking out "that is less than an amount prescribed in the regulations" and substituting "less than $1,000.".

66          Clause 2.3(4)(b) is replaced with the following:

(b) repair parts for the vehicle or for a trailer mentioned in clause (a), while the vehicle or trailer is used for interjurisdictional commercial purposes.

67(1)       Subsection 2.4(1) is replaced with the following:

Definitions

2.4(1)      The following definitions apply in this section.

"non-returnable packaging" means packaging other than returnable packaging. (« emballage à usage unique »)

"packaging" means containers, pallets and other packing and wrapping materials used for providing tangible personal property or a service. (« emballage »)

"returnable packaging" means packaging that is customarily returned for re-use as packaging. (« emballage récupérable »)

67(2)       Subsection 2.4(2) is amended

(a) in clause (a), by striking out "to a purchaser"; and

(b) in clause (b), by striking out "the purchaser to whom the property or service is provided, even if the purchaser" and substituting "the person to whom the property or service is provided, even if that person".

67(3)        Clause 2.4(3)(a) is replaced with the following:

(a) it is to be used as packaging for tangible personal property or a service to be provided by the vendor and will be transferred to the person to whom the property or service is provided; and

68(1)       Subsection 3(1) is amended

(a) by replacing clause (e.1) with the following:

(e.1) subject to the regulations, drugs and medicines for livestock;

(b) by replacing clause (l) with the following:

(l) livestock;

(c) in clause (o.1), by striking out "exclusively" and substituting "principally";

(d) in clause (u), by striking out "the face value thereof" and substituting "their face value or the applicable lettermail rate at the time of purchase";

(e) in clause (v), by striking out "tangible personal property used for" and substituting "tangible personal property, other than returnable packaging to which section 2.4 applies, used for";

(f) by adding the following after subclause (w.1)(v):

(vi) a protective material, such as masking tape or kraft paper, if the material is to be applied to the product for its protection during painting;

(g) by adding the following after clause (w.1):

(w.2) a chemical or other material purchased for incorporation into crude oil or gas to stimulate or increase crude oil production or to remove contaminants from the oil or gas;

(w.3) agricultural lime purchased for use in restoring farm land;

(h) in clause (z) of the English version, by striking out "valued at" and substituting "having";

(i) in clause (bb), by adding "used" before "household items";

(j) in clause (nn), by striking out "subsection 3(6)" and substituting "the regulations";

(k) in subclause (yy)(i), by striking out "2007" and substituting "2009"; and

(l) by repealing clause (aaa).

68(2)       Subsection 3(2) is replaced with the following:

"Used" defined

3(2)        For the purpose of clauses (1)(z) and (bb), "used" means previously used or owned by a consumer.

68(3)       Subsection 3(3) is repealed.

68(4)       Subsections 3(17) and (17.1) are repealed.

68(5)       The following is added after subsection 3(25):

Exemption: consumption on aircraft

3(25.1)     Despite sections 2 and 2.4, no tax is payable under this Act in respect of tangible personal property purchased by a commercial air carrier solely for consumption by its passengers or crew during a flight.

68(6)       Subsection 3(27.1) is amended in the part before clause (a) by striking out "2007" and substituting "2009".

68(7)       Subsections 3(29), (29.1) and (30) are repealed.

68(8)       Subsection 3(30.1) of the French version is amended by striking out "d'arpentage" and substituting "de levé".

68(9)       Subsection 3(31) is amended

(a) in clause (b) of the French version, by striking out "l'équipement de prospection" and substituting "l'équipement de levé"; and

(b) in the part after clause (b), by striking out "as prescribed in the regulations,".

68(10)      The following is added after subsection 3(35):

Exemptions for domestic and farm uses of electricity and piped gas

3(36)       Despite section 2, no tax is payable on a purchase of electricity or piped gas when it is purchased for use only in

(a) heating a dwelling unit in which the purchaser resides;

(b) heating or cooling a farm building; or

(c) producing heat for drying crops with a grain dryer in the course of farming.

69(1)       Subsection 4(1) is amended

(a) in clause (d), by striking out everything after "of tangible personal property";

(b) in the part of clause (e) before subclause (i), by striking out "or installing" and substituting ", disassembling, installing or uninstalling";

(c) in subclause (e)(ii), by striking out "the processing, assembly or installation" and substituting "that service"; and

(d) by repealing clause (e.1).

69(2)       The following is added after subsection 4(6):

Testing of food and beverages

4(7)        No tax is payable on the purchase of a service that consists of testing food or beverages for human consumption.

Services in relation to certain tax-exempt property

4(8)        No tax is payable on the purchase of a service mentioned in clause (1)(d) or (h) that is provided in relation to

(a) property to which clause 3(1)(f), (g), (h), (i), (o.1), (p), (dd) or (nn) applies; or

(b) an aircraft or aircraft part to which subsection 3(24) applies.

Service in respect of multijurisdictional vehicle

4(9)        No tax is payable on the purchase of a service mentioned in clause (1)(d), (e) or (h) that is provided in relation to

(a) a multijurisdictional vehicle that is being used for interjurisdictional commercial purposes; or

(b) a trailer that is being used with a multijurisdictional vehicle for interjurisdictional commercial purposes.

70          The following is added after subsection 5(6):

RST number not required

5(7)        Despite subsection (1), a person is not required to have an RST number in order to carry on business under the circumstances described in subsection 9(2.3), (2.4) or (2.6) if, because of that subsection, the person is not required to collect and remit taxes in those circumstances.

71          The following is added after subsection 9(2.1):

Broker or agent remitting on vendor's behalf

9(2.2)      A vendor's obligation under subsection (2) to collect and remit tax is satisfied if a broker or agent of the vendor collects and remits it on the vendor's behalf.

Exception for small home-based business

9(2.3)      Despite subsection (2), instead of collecting and remitting tax on his or her retail sales, a person may pay tax as a purchaser on the tangible personal property and taxable services that he or she acquires for resale, if

(a) the total fair value of the person's taxable retail sales of tangible personal property and taxable services in the preceding calendar year did not exceed $10,000.;

(b) the total fair value of the person's taxable retail sales of tangible personal property and taxable services in the current calendar year is not expected to exceed $10,000.; and

(c) the person's retail sales are not ordinarily made from commercial premises and are not commercially advertised.

Exception for sales by non-profit organization

9(2.4)      Despite subsection (2), a non-profit organization is not required to collect and remit tax on sales of taxable services or tangible personal property if

(a) the sales

(i) are non-commercial and are not commercially advertised, and

(ii) do not compete with sales by other vendors in respect of which they are required to collect and remit tax;

(b) tax has been paid on the fair value of the property or service

(i) by the organization on its purchase of the property or service, or

(ii) by the person from whom the organization acquired the property or service for sale, if it was donated to the organization; and

(c) the organization does not sell tobacco or liquor products.

Non-commercial nature

9(2.5)      For the purpose of sub-clause (2.4)(a)(i), a sale is non-commercial if

(a) the selling activity is performed by a volunteer; and

(b) the property or service being sold has been acquired by the organization for fundraising for its non-profit purposes.

Exception for sales of prepared food and beverages in certain circumstances

9(2.6)      Despite subsection (2), tax is not required to be collected and remitted in respect of the following sales of prepared food and beverages, as defined in the regulations, if the seller, upon purchasing any taxable items included in, or used to prepare, the prepared food and beverages, paid tax on those items as a purchaser:

(a) a sale by an elementary or secondary school to its students through a cafeteria or canteen operated at the school;

(b) a sale by a boarding school, university or college, including a university college, to its students as part of a meal plan where the student purchases at least 10 meals each week, at a single price, for a continuous period of at least one month;

(c) a sale by a domestic boarding house to its residents, or by a recreational camp to its attendees, at an all-inclusive single price for food and lodging, for a continuous period of at least one month;

(d) a sale by a day care centre to its attendees as part of an all-inclusive price for day care services;

(e) a sale by a senior citizens' home to its residents as part of a meal plan where the resident purchases at least 10 meals each week, at a single price, for a continuous period of at least one month.

72          Section 9.1 is repealed.

73(1)       Subsections 26(1) and (3) are repealed.

73(2)       The following is added before subsection 26(3):

Refund of tax on piped gas used to produce electricity

26(2.5)     Subject to subsection (2.2), a purchaser of piped gas is entitled to a refund of the tax paid on that gas if the gas is used by the purchaser to produce electricity for sale.

74          Subsection 29(1) is amended

(a) in clause (e), by striking out "and collectors";

(b) by repealing clause (n); and

(c) by adding the following after clause (r);

(r.1) governing the use of RST numbers, including prescribing circumstances in which a person acquiring property or services for resale or exempt from tax must provide his or her RST number to the vendor;

PART 10

THE TAX ADMINISTRATION AND

MISCELLANEOUS TAXES ACT

C.C.S.M. c. T2 amended

75          The Tax Administration and Miscellaneous Taxes Act is amended by this Part.

76          Subsection 1(1) is amended

(a) in clause (h) of the definition "tax Act", by striking out "and Part I.1 of this Act"; and

(b) by replacing the definition "tax officer" with the following:

"tax officer" means

(a) the director; and

(b) a person designated as a tax officer under section 4 or belonging to a class of persons designated as tax officers under that section;

and, except for the purposes of section 4, clauses 22(1)(b) to (d) and subsection 22(3), includes a peace officer. (« agent du fisc »)

77          Section 9 is renumbered as subsection 9(1) and the following is added as subsection 9(2):

Exception

9(2)        Subsection (1) does not apply to the filing of a periodic return of information or the remittance of tax that is to accompany that return.

78          Subclause 10(2)(c)(iv) is amended by striking out "by a tax officer or peace officer".

79(1)       Subsection 17(1) is amended by adding "and" at the end of clause (a), striking out "and" at the end of clause (b) and repealing clause (c).

79(2)       The following is added after subsection 17(2):

Holder of tax authorization to keep records

17(2.1)     The holder of a tax authorization must maintain records in accordance with

(a) this section and any applicable regulation;

(b) any order or agreement made under a tax Act; and

(c) the terms and conditions of the tax authorization.

79(3)       Subsections 17(3) and (4) are replaced with the following:

Records must be adequate

17(3)       The records that a person is required to maintain must be adequate to enable the following to be determined or verified:

(a) the amount of any tax, interest and penalties to be paid or remitted by the person;

(b) the person's entitlement to any credit, commission, allowance or refund;

(c) the entitlement to a tax exemption claimed by the person or applied by the person in a transaction with another person;

(d) the person's compliance with the tax Acts and any applicable tax authorization, order or agreement.

Director may order records to be kept

17(4)       If the director considers that records that are required to be maintained are inadequate for the proper administration and enforcement of a tax Act, the director may, by written order, require the person who is required to maintain them to do one or more of the following:

(a) to begin maintaining the types of records specified in the order, and to maintain them in the manner specified;

(b) to create or complete records for a specified period.

The order may specify a deadline for the person to comply with the order.

80(1)       The part of subsection 18(1) before clause (a) is amended by striking out "taxpayer" wherever it occurs and substituting "person".

80(2)       Subsection 18(2) is amended

(a) in the part before clause (a), by striking out "a taxpayer may destroy records" and substituting "records may be destroyed"; and

(b) in clause (b), by striking out "of the taxpayer".

80(3)       Subsection 18(4) is amended

(a) by striking out "the taxpayer to keep records" and substituting "a person to keep records"; and

(b) by striking out "the taxpayer must not" and substituting "the person must not".

80(4)       The part of subsection 18(5) before clause (a) is replaced with the following:

Preserving electronic records

18(5)       If a person who is required to maintain records under a tax Act keeps them in electronic form, the person must ensure that, for as long as they are required to be preserved, they

81          The part of section 20 before clause (a) is amended by striking out "taxpayer" and substituting "person".

82(1)       Subsection 21(2) is replaced with the following:

Who may be required to produce records, etc.

21(2)       The order may be addressed and given to

(a) a taxpayer or other person required to maintain records under a tax Act;

(b) a person who deals with or has dealt with a person referred to in clause (a); or

(c) a director, officer, agent or employee of a person referred to in clause (a) or (b).

82(2)       Subclause 21(3)(a)(ii) is amended by striking out "taxpayer" and substituting "person".

83(1)       The part of subsection 39(2) after clause (b) is amended by striking out ", by assessment under section 46,".

83(2)       The following is added after subsection 39(2):

Fee for dishonoured cheque

39(3)       The director may charge a fee of $20. for a cheque or other negotiable instrument that is dishonoured.

84          Subclause 40(1)(a)(ii) is replaced with the following:

(ii) a penalty or fee imposed under section 39; and

85          The following is added after subsection 45(7):

Tax debt discovered after certificate is issued

45(8)       If after issuing a certificate to a seller under subsection (4) the director discovers, based on new information, a tax debt that was owing by the seller when the certificate was issued, the debt may be enforced against the seller but not against the purchaser who obtained a copy of the certificate.

86(1)       Subsection 46(2) is replaced with the following:

Clarification

46(2)       For greater certainty, an amount may be added to a taxpayer's tax debt without the amount being assessed under this section unless the provision under which it is charged or imposed only allows it to be charged or imposed by an assessment under this section.

86(2)       Subsection 46(3) is amended

(a) in the part before clause (a), by striking out "or a taxable product under Part I.1 of this Act"; and

(b) in subclause (a)(ii), by striking out "The Retail Sales Tax Act" and substituting "that Act".

87          The following is added after section 53 and before Division 4:

BAD DEBTS

Definitions

53.1(1)     The following definitions apply in this section.

"applicable tax Act" means the tax Act under which an amount was remitted by a collector on account of tax in relation to a sale or lease by the collector. (« loi fiscale applicable »)

"bad debt" means an amount that

(a) is owing to a collector as proceeds of a sale or lease by the collector to a person with whom the collector would be considered, in relation to that sale or lease, to be dealing at arm's length for the purposes of the Income Tax Act (Canada); and

(b) the collector has written off, in accordance with generally accepted accounting principles, as a bad debt in his or her books of account. (« créance irrécouvrable »)

"collector" includes a deputy collector. (« collecteur »)

"proceeds", in relation to a sale or lease by a collector, means the total of

(a) the consideration paid or payable by the buyer or lessee to the collector;

(b) the amount paid or remitted by the collector on account of tax under the applicable tax Act in respect of the sale or lease; and

(c) all levies, duties and taxes — other than taxes under the tax Acts — imposed by any level of government and paid or payable by the buyer to the collector in respect of the sale or lease.

It does not include interest or costs incurred to collect the proceeds. (« produit »)

Deduction for tax remitted in respect of bad debt

53.1(2)     Subject to subsections (4) and (7), after an amount owing to a collector becomes a bad debt, the collector may deduct from the tax that he or she is otherwise required to remit under the applicable tax Act the amount determined by the following formula:

D = (T × B / P) − A

In this formula,

D   is the amount deductible by the collector;

T   is the amount remitted on account of tax under the applicable tax Act by the collector in respect of the sale or lease to which the bad debt relates;

B   is the amount of the bad debt;

P   is the total proceeds of the sale or lease to which the bad debt relates;

A   is the total of all amounts previously deducted or refunded under this section or under the applicable tax Act in respect of the bad debt.

Refund of tax remitted in respect of bad debt

53.1(3)     The minister may, on application by a collector entitled to deduct an amount under subsection (2), refund all or any part of the amount to the collector.

Time limit for deduction or application for refund

53.1(4)     A deduction under subsection (2) or an application for a refund under subsection (3) in respect of a bad debt cannot be made more than two years after the day the amount became a bad debt.

Recovery of bad debt

53.1(5)     If at any time all or part of a bad debt owing to a collector is recovered, the collector must report and remit to the minister on account of tax under the applicable tax Act, on or before the 20th day of the month after the month in which the recovery is made, the amount determined by the following formula:

R = A × B / C

In this formula,

R   is the amount to be remitted;

A   is the total of all amounts previously deducted or refunded under this section or the applicable tax Act in respect of the bad debt;

B   is the amount of the bad debt that was recovered at that time;

C   is the amount of the bad debt that was owing before the recovery.

Order of payment

53.1(6)     For the purpose of subsection (5), any amount recovered by a collector in relation to a bad debt — even if it is recovered as interest or as a late payment fee, a charge for debt collection or any other fee or charge — must be applied first as a payment on account of the bad debt.

Transitional

53.1(7)     If an amount owing to a collector became a bad debt before April 4, 2007, no amount is deductible under subsection (2) in respect of that debt unless it would have been deductible under the applicable tax Act before that date.

88          Subsection 76(3) of the English version is amended by adding "is" before "due".

89          Subsection 77(2) is amended by striking out "or" at the end of subclause (a)(iii) and adding the following after clause (a):

(a.1) contrary to a fuel tax Act, fails, as the owner of a vehicle being operated under a carrier licence,

(i) to ensure that a copy of the licence is carried by the operator in the cab of the vehicle, or

(ii) to ensure that carrier decals are affixed to the cab of the vehicle in accordance with the regulations under the applicable fuel tax Act; or

90          Subsection 80(1) is amended by striking out "or" at the end of subclause (b)(iii), adding "or" at the end of clause (c) and adding the following after clause (c):

(d) contrary to the regulations under The Tobacco Tax Act, acquires tear tape from a person who does not hold a permit to manufacture the tear tape.

91          Clause 85(1)(d) is replaced with the following:

(d) prescribing records to be maintained by taxpayers and holders of tax authorizations, and prescribing how they are to be maintained;

92          Sections 96 to 105, 107, 109 and 110 are repealed.

93          Section 106 is repealed.

94          Section 108 is repealed.

95          Subsection 118(1) is amended by striking out "section 39" and substituting "section 117".

PART 11

THE TOBACCO TAX ACT

C.C.S.M. c. T80 amended

96          The Tobacco Tax Act is amended by this Part.

97(1)       Subsection 3.1(2) is amended by striking out "more than one unit of cigarettes and one unit of fine cut tobacco" and substituting "cigarettes or fine cut tobacco".

97(2)       Subsection 3.1(3) is amended

(a) by adding the following after clause (a):

(a.1) the packaging of the cigarettes or fine cut tobacco meets the requirements of the Excise Tax Act (Canada) and the quantity in the person's possession does not exceed one unit of cigarettes and one unit of fine cut tobacco;

(b) in clauses (c) and (d), by striking out "in possession of the cigarettes or fine cut tobacco" and substituting "in possession of cigarettes, fine cut tobacco or any combination of cigarettes and fine cut tobacco"; and

(c) in the English version, by striking out "or" at the end of subclause (c)(ii).

98(1)       Subsection 13(4) is amended by striking out "deemed to have been received by the collector during that period" and substituting "required to be remitted by the collector for that period".

98(2)        Subsections 13(5) and (7) are repealed.

99          Subsection 27(1) and the centred heading before it are repealed.

PART 12

OTHER AMENDMENTS

AUDITOR GENERAL ACT

C.C.S.M. c. A180 amended

100         The definition "government organization" in section 1 of The Auditor General Act is amended by striking out "or fund" and substituting ", fund or other organization".

THE FINANCIAL ADMINISTRATION ACT

C.C.S.M. c. F55 amended

101(1)      The Financial Administration Act is amended by this section.

101(2)      Subsection 1(1) of the French version is renumbered as section 1.

101(3)      Section 1 is amended by adding the following definitions:

"government reporting entity" means the government of Manitoba together with all the reporting organizations; (« entité comptable du gouvernement »)

"reporting organization" means

(a) a government agency, and

(b) any other organization prescribed by regulation as a reporting organization or belonging to a class of organizations prescribed as reporting organizations; (« organisme comptable »)

101(4)      Subsection 20(1) is replaced with the following:

Refund of money

20(1)       When an amount received by the government is to be refunded under an Act or because

(a) it was erroneously paid to or collected by the government; or

(b) it was received for a purpose that has not been and cannot be fulfilled;

the refund may be paid out of the Consolidated Fund in accordance with directives of the Minister of Finance, together with interest if an Act requires interest to be paid on the refundable amount.

101(5)      Clause 60(a) is amended by adding "or other long-term liabilities" after "debt".

101(6)      The following is added after section 60 as part of Part 5:

Pension assets fund continued

60.1(1)     The pension assets fund, established as a sinking fund for the orderly retirement of the government's pension liabilities, is continued.

Amounts to be credited to pension assets fund

60.1(2)     The following amounts are to be transferred or credited to the pension assets fund in each fiscal year:

(a) the amount, if any, transferred out of the Debt Retirement Fund under The Balanced Budget, Debt Repayment and Taxpayer Accountability Act for the purpose of reducing the government's pension liability;

(b) all amounts appropriated for the year in respect of the current service of persons earning a pension for which the government is liable;

(c) any additional amount allocated in the year to the fund, by directive from the Minister of Finance, from the Consolidated Fund for the purpose of reducing the government's pension liability;

(d) the income earned in the year from the fund's investments.

Payments out of pension assets fund

60.1(3)     Money in the pension assets fund may be paid or transferred out of the fund without any legislative authority other than this section, but only for the following purposes:

(a) to pay, or fund the payment of, pension benefits for which the government is responsible;

(b) to pay the costs of administering the pension assets fund.

101(7)      Subsection 65(1) is replaced with the following:

Preparation of public accounts

65(1)       The Comptroller must prepare for each fiscal year, in accordance with the directions of the Minister of Finance, public accounts that include

(a) summary financial statements that provide an accounting of the financial affairs and resources of the government reporting entity, accompanied by a report of the Auditor General concerning his or her examination of those statements; and

(b) information required under this Act or by the Minister of Finance to be reported in the public accounts.

101(8)      The following is added after subsection 65(2):

Reporting organizations

65(3)       For the purposes of enabling the Minister of Finance to prepare summary budgets for the government reporting entity and enabling the Comptroller to prepare the summary financial statements referred to in clause (1)(a),

(a) the Minister of Finance may make regulations prescribing organizations or classes of organizations as reporting organizations and establishing financial reporting requirements for reporting organizations;

(b) the Minister of Finance may issue financial reporting guidelines for reporting organizations; and

(c) the Minister of Finance or a person authorized by him or her for this purpose may enter any premises where financial records of a reporting organization are kept and inspect those records for the purpose of

(i) verifying any information that has been reported by the organization to the Minister of Finance, or

(ii) obtaining information that the government requires in order to comply with this Part.

Assistance to minister or authorized person

65(4)       A person in charge of the place of inspection or having custody or control of the relevant records of a reporting organization must

(a) produce or make available to the Minister of Finance or authorized person the financial records to be inspected; and

(b) provide any assistance or additional information that the minister or authorized person reasonably requires to carry out the inspection.

Copies of records

65(5)       The Minister of Finance or authorized person may

(a) use equipment at the place of inspection to make copies of relevant records; or

(b) remove records from the place of inspection to make copies.

Records removed under clause (b) must be returned to the place of inspection as soon as practicable.

THE SPECIAL OPERATING AGENCIES FINANCING AUTHORITY ACT

C.C.S.M. c. S185 amended

102         Subsection 23(1) of The Special Operating Agencies Financing Authority Act is amended by striking out "and each agency".

AMENDMENTS TO 2005 BUDGET IMPLEMENTATION ACT

S.M. 2005, c. 40 amended

103(1)      The Budget Implementation and Tax Statutes Amendment Act, 2005 is amended by this section.

103(2)      Clause 10(2)(d) of The Tax Administration and Miscellaneous Taxes Act, as enacted by section 85, is amended

(a) by striking out "section 27.1" and substituting "section 71"; and

(b) by striking out "section 27.4" and substituting "subsection 74(6)".

103(3)      Subsection 136(20) is amended by striking out "The Public Health Amendment Act, S.M. 2002, c. 38" and substituting "Part 7 of The Public Health Act, S.M. 2006, c. 14".

CONSEQUENTIAL AMENDMENT

Consequential amendment to C.C.S.M. c. B5

104         Clause 10(1)(d) of The Balanced Budget, Debt Repayment and Taxpayer Accountability Act is repealed.

PART 13

COMING INTO FORCE

Coming into force

105(1)      Except as otherwise provided in this section, this Act comes into force on the day it receives royal assent.

Part 1: The Corporation Capital Tax Act

105(2)      Section 4 is deemed to have come into force on January 2, 2007.

Part 2: The Gasoline Tax Act

105(3)      Section 11 comes into force on April 1, 2008.

105(4)      Section 12 is deemed to have come into force on April 4, 2007.

Part 4: The Income Tax Act

105(5)      The following provisions come into force on January 1, 2008:

(a) subsection 24(1);

(b) clause 24(2)(a);

(c) subsection 26(6);

(d) section 35.

105(6)      The following provisions are deemed to have come into force on January 1, 2007:

(a) clause 24(2)(b);

(b) subsections 26(1), (4), (5), (7) and (8);

(c) sections 28 and 33.

Part 5: The Insurance Corporations Tax Act

105(7)      Section 48 is deemed to have come into force on April 4, 2007.

Part 7: The Motive Fuel Tax Act

105(8)      The following provisions are deemed to have come into force on April 4, 2007:

(a) clauses 52(c) and (d);

(b) subsection 53(4);

(c) section 55.

105(9)      Section 54 comes into force on April 1, 2008.

Part 9: The Retail Sales Tax Act

105(10)     The following provisions come into force on April 1, 2008:

(a) clause 63(1)(a) insofar as it enacts the definitions "dwelling unit", "farm building" and "piped gas";

(b) clause 63(1)(b);

(c) clause 63(1)(f) insofar as it enacts clause (g) of the definition "vendor";

(d) subsections 64(2) and (3);

(e) subsections 68(3) and (10);

(f) subsection 73(2).

105(11)     Subclause 63(1)(e)(ii) and subsection 63(3) are deemed to have come into force on October 1, 2002.

105(12)     Clause 68(1)(g) is deemed to have come into force on April 1, 2006.

105(13)     Clause 68(1)(k) and subsection 68(6) are deemed to have come into force on July 1, 2007.

105(14)     The following provisions are deemed to have come into force on April 4, 2007:

(a) clause 68(1)(l);

(b) section 71, insofar as it enacts subsection 9(2.3) of The Retail Sales Tax Act;

(c) section 72.

Part 10: The Tax Administration and Miscellaneous Taxes Act

105(15)     Clause 76(a), subsection 86(2) and section 92 come into force on April 1, 2008.

105(16)     Section 77 comes into force on February 1, 2008.

105(17)     Sections 85, 87 and 93 are deemed to have come into force on April 4, 2007.

Part 11: The Tobacco Tax Act

105(18)      Section 98 is deemed to have come into force on April 4, 2007.

Part 12: Other amendments

105(19)     Section 104 comes into force on April 1, 2008.

Explanatory Note

This Bill implements measures in the 2007 Manitoba Budget, and makes various other amendments to tax and financial legislation.

Budget Measures

The amendments to implement tax measures announced in the Budget include the following:

Corporation Capital Tax (Part 1)

  • reducing the tax rates as follows for fiscal years beginning after January 1, 2008 (except for Crown corporations and financial institutions):

    •   from 0.3% to 0.2%, for corporations with a taxable amount not over $10 million

    •   from $30,000 plus 2.5% on the taxable amount over $10 million to $20,000 plus 2.4% on the taxable amount over $10 million, for corporations with a taxable amount over $10 million but not over $11 million

    •   from 0.5% to 0.4%, for corporations with a taxable amount over $11 million (s. 3)

  • eliminating the quarterly instalments for corporations paying taxes of $5,000 or less per year (s. 5)

Health and Post-Secondary Education Tax (Part 3)

  • increasing the annual payroll exemption from $1,000,000 to $1,250,000, and increasing the threshold below which employers pay a reduced rate from $2,000,000 to $2,500,000 (s. 20)

Income Tax (Part 4)

  • reducing the personal income tax rate for the middle tax bracket from 13% to 12.75% and raising the upper limit of the middle tax bracket from $65,000 to $66,000 (s. 25(2))
  • increasing the basic personal amount and the maximum spousal and eligible dependant amounts to $8,034 (s. 26(1) to (3))
  • adding provisions to parallel the federal children's fitness tax credit (s. 26(4))
  • replacing the family tax reduction with a family tax benefit (s. 26(6) and 29)
  • providing graduates with tuition fee income tax rebates (s. 24(2) and 28)
  • increasing the education property tax credit base amount from $400 to $525 (s. 34 and 35)
  • reducing the general corporate tax rate from 14% to 13% and the small business tax rate for active business income from 3% to 2% (s. 37)
  • increasing the refundable portion of the manufacturing investment tax credit from 35% to 50% (s. 38)
  • extending the film and video production tax credit for three more years to March 1, 2011 (s. 39)
  • introducing a refundable green energy tax credit in relation to equipment manufactured and acquired to produce energy from certain renewable resources (s. 42)
  • broadening the community enterprise development tax credit to include a new 30% non-refundable tax credit for investments in certain enterprises that require larger investments than can be provided through investments qualifying for the existing credit (s. 44)

Insurance Corporations Tax (Part 5)

  • allowing the Minister of Finance to waive interest and penalties (s. 47)

Property Tax (Part 8)

  • increasing the farmland school tax rebate (s. 61)

Retail Sales Tax (Part 9)

  • moving the tax on electricity and natural gas under Part I.1 of The Tax Administration and Miscellaneous Taxes Act to The Retail Sales Tax Act (various sections)
  • extending by two years the tax exemption for manure slurry tanks and liners for manure lagoons (s. 68)
  • eliminating the requirement for small home-based businesses to collect and remit retail sales tax (s. 71)

Other Amendments

Other amendments to tax statutes include the following:

  • making corrections and minor amendments
  • enhancing or streamlining various tax administration and collection measures
  • exempting from motive fuel tax the biodiesel portion of blended motive fuel purchased before April 1, 2011 (s. 53)
  • providing greater flexibility to purchasers paying retail sales tax on property brought into Manitoba for temporary use (s. 64)
  • restructuring the existing exemption for non-profit organizations as an exception from the requirement to register as a vendor and to collect and remit retail sales tax in certain circumstances (s. 71)
  • giving peace officers the powers of tax officers for certain purposes (s. 76)

In addition, amendments to The Financial Administration Act include the following:

  • defining "government reporting entity" and "reporting organization", terms that are used in relation to summary budgets and financial statements (s. 101(3))
  • requiring the government to provide audited summary financial statements for the government reporting entity instead of audited financial statements for the Consolidate Fund (s. 101(7))
  • requiring reporting organizations to provide financial information in order to facilitate summary budgets and financial statements (s. 101(8))
  • continuing the pension assets fund and regulating its use (s. 101(6))