Skip to main content
The Statute Law Amendment Taxation Act, 1992

This is an unofficial version.
If you need an official copy, contact Statutory Publications.

This search displays only the paragraphs with hits.
Match: Search:

You can use wild cards:

'*' allows for 0 or more characters (eg. ceas* will match 'cease', 'ceased', 'ceasing' and 'ceases')

'?' allows for 0 or 1 character (eg. cease? will match 'cease', 'ceases' and 'ceased', but not 'ceasing')

This search is not case sensitive.


S.M. 1992, c. 52

The Statute Law Amendment Taxation Act, 1992

(Assented to June 24, 1992)

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           Section 1 is amended by adding the following definition in alphabetical order:

"commission" means the Tax Appeals Commission established under section 2 of The Tax Appeals Commission Act; (« Commission »)

3(1)        Subsection 10(1) is amended by adding the following after clause (b):

(c) in respect of a fiscal year ending after December 31, 1991, the amount of Canadian exploration and development expenses incurred by the corporation in searching for minerals in Canada and that are deductible under the Income Tax Act (Canada), to the extent that such expenses have not been deducted by the corporation under the Income Tax Act (Canada) for the taxation year or for any prior taxation year, but this provision does not apply to a corporation in respect of a fiscal year in which the corporation owned more than 50% of an operating mine in Manitoba.

3(2)        Subsection 10(3) is repealed and the following is substituted:

Definitions

10(3)       In this section,

"minerals" does not include petroleum, natural gas or related hydrocarbons, bituminous sands, oil sands or oil shale; (« minéraux »)

"other intangible things" means amounts expended on eligible capital expenditures as determined by paragraph 14(5)(b) of the Income Tax Act (Canada) or would have been considered eligible capital expenditures had that paragraph been in force when the expenditures were made. (« autres biens incorporels »)

4           Section 11 is repealed and the following is substituted:

Definitions

11(1)       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 the tax benefit,

(ii) to reduce, avoid, or defer a tax or other amount payable as tax or in respect of tax under any other Act or increase a refund of tax or other amount in respect of tax under any other Act, or

(iii) both (i) and (ii),

(d) to be a transaction that would not result directly or indirectly in a misuse of the provisions of this Act or an abuse having regard to the provisions of this Act, other than this section, read as a whole; (« opération d'évitement »)

"tax benefit" means a reduction, avoidance or deferral of tax or other amount payable under this Act or an increase in a refund of tax or other amount under this Act; (« avantage fiscal »)

"tax consequences" to a corporation means the amount taxable or the tax or surtax or other amount payable by, or refundable to the corporation under this Act, or any other amount that is relevant for the purposes of computing that amount; («attribut fiscal»)

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

General anti-avoidance provision

11(2)       Where a transaction is an avoidance transaction, the tax consequences to a corporation shall be determined as 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.

Determination of tax consequences

11(3)       Without restricting the generality of subsection (2),

(a) any deduction in computing the amount taxable or any deduction in computing tax or surtax payable may be allowed or disallowed in whole or in part;

(b) any such deduction or part thereof may be allocated to any corporation;

(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 may be ignored;

in determining the tax consequences to a corporation as is reasonable in the circumstances in order to deny a tax benefit that would, but for this section, result, directly or indirectly, from an avoidance transaction.

Tax consequences through assessment

11(4)       The tax consequences to any corporation, following the application of this section, shall only be determined through a notice of assessment pursuant to section 34.

Request for adjustments

11(5)       Where, with respect to a transaction, a notice of assessment involving the application of subsection (2) with respect to that transaction has been sent to a corporation, any corporation, other than the corporation to whom the notice has been sent, shall be entitled, within 180 days after the day of mailing of the notice, to request in writing that the director make an assessment applying subsection (2) with respect to that transaction.

Duties of director

11(6)       On receipt of a request by a corporation under subsection (5), the director shall, with all due dispatch, consider the request and make an assessment except that an assessment may be made under this subsection only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection (5).

Application

11(7)       This section applies with respect to a tax benefit that arises in any fiscal year ending after March 10, 1992.

5           The following is added after section 29:

Waiver of penalty and interest

29.1(1)     Where a corporation has failed to pay or remit the amount of any tax under this Act within the time required, and the director is satisfied that the failure was the result of exceptional circumstances, the director may waive all or part of the interest payable under section 22 and the penalty payable under section 29 in respect of that amount of tax.

Report to minister

29.1(2)     The director shall, within 60 days of waiving any interest or penalty referred to in subsection (1), make a report in writing to the minister setting out the name of the corporation in respect of whom the waiver was given, the amount waived and the reasons for the waiver.

6           Subsection 34(S) is amended by adding "34.1," before "35 or 36".

7           The following is added after section 34:

Notice of objection to commission

34.1(1)     Where a corporation disputes the amount of an assessment made under section 34, the corporation may directly, or by its agent, within 90 days after receiving the notice of the assessment, appeal the assessment by serving on the commission and the director a notice of objection in writing setting forth clearly the reasons for the objection and any facts relative thereto.

Consideration of appeal by commission

34.1(2)     Upon receipt of a notice of objection, the -commission shall make an investigation and inquiry in accordance with The Tax Appeals Commission Act and shall affirm, rescind or amend the assessment and forthwith serve notice of its decision on the corporation, the director and the minister.

8           The following is added after section 34.1:

Transition

34.2        Section 34.1 applies to an assessment from which, on the coming into force of that section, an appeal exists but has not been taken, to the same extent as if that section had been in force when the assessment was made.

9           Subsection 35(1) is repealed and the following is substituted:

Appeal from commission to minister

35(1)       A corporation, its agent or the director may, within 60 days after receipt of the notice of the decision of the commission, appeal the decision to the minister by serving a notice of appeal on the minister and on the other person entitled to appeal.

10(1)       The following is added after subsection 46(1):

Service on director, commission, minister

46(1.1)     A notice or other document that is required to be served under this Act on the director, the commission or the minister is sufficiently served

(a) on the director if it is delivered or sent by registered mail to the office of the director;

(b) on the commission if it is delivered or sent by registered mail to the office of the commission; and

(c) on the minister if it is delivered or sent by registered mail to the office of the minister or the deputy minister.

10(2)       Subsection 46(2) is amended

(a) by adding ", the director, the commission or the minister" after "sent to a corporation,"; and

(b) by adding ", the director, the commission or the minister" after "the corporation" wherever it occurs.

PART 2

THE GASOLINE TAX ACT

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

11          The Gasoline Tax Act is amended by this Part.

12          Clause 2(23)(b) is amended by striking out "5.8e" and substituting "5.0¢".

13          The following is added after section 35.1:

Directors liable

35.2(1)     Where a corporation that is a collector or a deputy collector has failed to collect tax or has collected tax and failed to remit the tax or has failed to pay any interest or penalty relating thereto, the directors of the corporation at the time the corporation was required to collect or remit the tax or to pay the interest or penalty relating thereto, are jointly and severally liable, together with the corporation, to pay such amounts.

Exceptions

35.2(2)     A director of a corporation is not liable under subsection (1) unless

(a) a warrant of execution for the amount of the corporation's liability as described in subsection (1) has been issued against the corporation under subsection 17(1) and has been directed to the sheriff for execution and the warrant has been returned by the sheriff unsatisfied in whole or in part;

(b) the corporation has commenced liquidation or dissolution proceedings, or has been dissolved, and a claim for the amount of the corporation's liability referred to in subsection (1) has been made;

(c) the corporation has lost control or possession of its property by order of a court or otherwise for the purpose of liquidation in receivership proceedings, sale by a secured creditor, winding up proceedings, or for the purpose of distribution to creditors pursuant to a general assignment made for the benefit of creditors and a claim for the amount of the corporation's liability referred to in subsection (1) has been made; or

(d) the corporation has made an assignment, or a receiving order has been made against it under the Bankruptcy Act (Canada), and a claim for the amount of the corporation's liability referred to in subsection (1) has been made.

Prudent director

35.2(3)     A director of a corporation is not liable for a failure described in subsection (1) if the director of the corporation exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances.

Estimates and assessments

35.2(4)     The director authorized to make estimates or assessments under this Act may make an estimate or assess any person for any amount payable by the person under this section and, where that director sends a notice of estimate or assessment, sections 22, 23, 24, 25 and 26 apply in respect of the notice of estimate or assessment with such modifications as the circumstances require.

Time limit

35.2(5)     An estimate or assessment under subsection (4) of an amount payable by a person who is a director of a corporation shall not be made more than two years after the person last ceased to be a director of the corporation.

Liability of director after execution

35.2(6)     Where execution referred to in clause (2)(a) has been issued, the amount recoverable from a director of the corporation is the amount remaining unsatisfied after execution.

Rights of director upon payment

35.2(7)      Where a director of a corporation pays an amount in respect of a corporation's liability described in subsection (1), the director of the corporation is entitled to any preference that Her Majesty in right of Manitoba would have been entitled to had the amount not been so paid and, where a warrant of execution has been issued and directed to the sheriff, the director of the corporation is entitled to an assignment of the warrant of execution to the extent of that director's payment, and the minister is empowered to make the assignment.

Allocation by minister

35.2(8)     For the purposes of this section, the minister may apply any payment or payments made by or on behalf of the corporation under this Act to any of the liabilities described in subsection (1) including penalties and interest relating thereto.

Contribution

35.2(9)     A director of a corporation who satisfies a claim under this section is entitled to contribution from the other directors of the corporation who were liable for the claim.

Application of subsection (7)

35.2(10)    Where a director of a corporation who satisfies a claim under this section recovers contribution from any other director, subsection (7) applies with such modifications as the circumstances require to a director against whom contribution is recovered.

Application of various sections

35.2(11)    Subsections 16(1), (2), (4) and (10) to (19) and sections 17 and 18 apply with such modifications as the circumstances require to a director of a corporation who fails to satisfy an estimate or assessment under this section.

PART 3

THE HEALTH AND POST SECONDARY EDUCATION TAX LEVY ACT

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

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

15          Section 1 is amended by adding the following definition in alphabetical order:

"commission" means the Tax Appeals Commission established under section 2 of The Tax Appeals Commission Act; («Commission»)

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

Corporate partnerships

2(4)        Notwithstanding any other provision of this Act, where an employer is a partnership that includes one or more corporations as partners

(a) each of those corporations, in respect of the portion of the total remuneration paid by the partnership that is required to be allocated to each corporate partner under subsection (5), is deemed, for the purposes of this Act, to be the employer and to have paid that amount of remuneration to his or her employees; and

(b) the partnership, in respect of the balance of the remuneration paid by the partnership that is not required to be allocated under subsection (5), is for the purposes of this Act, the employer who has paid that amount of remuneration to his or her employees.

Allocation of remuneration

2(5)        The portion of the total remuneration that is required to be allocated to each corporate partner under subsection (4) is the amount obtained when the total remuneration paid by the partnership for each month is multiplied by the percentage by which the corporate partner is entitled to share in the profits or obliged to bear the losses of the partnership.

Remuneration paid through a trust

2(6)        Notwithstanding any other provision of this Act, for the purpose of the tax payable under subsection 3(3.1), remuneration paid by an employer to or on behalf of each of his or her employees includes any amount paid by the employer to a trust for the benefit of an employee if the amount, upon payment or allocation to the employee, is by reason of subsection 5(1) or section 6 or 7 of the Income Tax Act (Canada) declared to be or is required to be included in the income of a person under that Act.

Waiver of subsection (3) by minister

2(7)        Notwithstanding subsection (3), the minister may, on application and in accordance with such criteria as may be prescribed, waive in whole or in part the application of subsection (3) in respect of any corporation for such period of time as the minister considers appropriate.

17          Subsection 5(3) is amended by adding "and a summary of the remuneration described in subsection 2(6) that was paid in that year" after "the Income Tax Act (Canada)".

18          The following is added after section 16:

Waiver of penalty and interest

16.1(1)     Where an employer has failed to pay or remit the amount of any tax under this Act within the time required and the director is satisfied that the failure was the result of exceptional circumstances, the director may waive all or part of the interest payable under subsection 9(2) and the penalty payable under subsection 16(2) in respect of that amount of tax.

Report to minister

16.1(2)     The director shall, within 60 days of waiving any interest or penalty referred to in subsection (1), make a report in writing to the minister setting out the name of the employer in respect of whom the waiver was given, the amount waived and the reasons for the waiver.

19          Subsection 21(5) is amended by adding "21.1," before "22 or 23".

20          The following is added after section 21:

Notice of objection to commission

21.1(1)     Where an employer disputes the amount of an assessment made under section 21, the employer may directly, or by his or her agent, within 90 days after receiving the notice of the assessment, appeal the assessment by serving on the commission and the director a notice of objection in writing setting forth clearly the reasons for the objection and any facts relative thereto.

Consideration of appeal by commission

21.1(2)     Upon receipt of a notice of objection, the commission shall make an investigation and inquiry in accordance with The Tax Appeals Commission Act and shall affirm, rescind or amend the assessment and forthwith serve notice of its decision on the employer, the director and the minister.

21          The following is added after section 21.1:

Transition

21.2        Section 21.1 applies to an assessment from which, on the coming into force of that section, an appeal exists but has not been taken, to the same extent as if that section had been in force when the assessment was made.

22          Subsection 22(1) is repealed and the following is substituted:

Appeal from commission to minister

22(1)       The employer, or his or her agent, or the director may, within 60 days after receipt of the notice of the decision of the commission, appeal the decision to the minister by serving a notice of appeal on the minister and on any other persons entitled to appeal.

23          The following is added after section 26:

Definitions

26.1(1)     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 the tax benefit,

(ii) to reduce, avoid, or defer a tax or other amount payable as tax or in respect of tax under any other Act or increase a refund of tax or other amount in respect of tax under any other Act, or

(iii) both (i) and (ii),

(d) to be a transaction that would not result directly or indirectly in a misuse of the provisions of this Act or an abuse having regard to the provisions of this Act, other than this section, read as a whole; («opération d'évitement»)

"tax benefit" means a reduction, avoidance or deferral of tax or other amount payable under this Act or an increase in a refund of tax or other amount under this Act; ('« avantage fiscal »)

"tax consequences" to an employer means the amount of remuneration paid or the tax or other amount payable by, or refundable to, the employer under this Act, or any other amount that is relevant for the purposes of computing that amount; («attribut fiscal»)

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

General anti-avoidance provision

26.1(2)     Where a transaction is an avoidance transaction, the tax consequences to an employer shall be determined as 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.

Determination of tax consequences

26.1(3)     Without restricting the generality of subsection (2),

(a) any deduction in computing remuneration, or any deduction in computing tax payable may be allowed or disallowed in whole or in part;

(b) any such deduction or part thereof may be allocated to any employer;

(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 may be ignored;

in determining the tax consequences to an employer as is reasonable in the circumstances in order to deny a tax benefit that would, but for this section, result, directly or indirectly, from an avoidance transaction.

Tax consequences through assessment

26.1(4)     The tax consequences to an employer, following the application of this section, shall only be determined through a notice of assessment pursuant to section 21.

Request for adjustments

26.1(5)     Where, with respect to a transaction, a notice of assessment involving the application of subsection (2) with respect to that transaction has been sent to an employer, any employer, other than the employer to whom the notice has been sent, shall be entitled, within 180 days after the day of mailing of the notice, to request in writing that the director make an assessment applying subsection (2) with respect to that transaction.

Duties of director

26.1(6)     On receipt of a request by an employer under subsection (5), the director shall, with all due dispatch, consider the request and make an assessment, except that an assessment may be made under this subsection only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection (5).

Application

26.1(7)     This section applies with respect to a tax benefit that arises after December 31,1991.

24(1)       The following is added after subsection 33(1):

Service on director, commission, minister

33(1.1)     A notice or other document that is required to be served under this Act on the director, the commission or the minister is sufficiently served

(a) on the director if it is delivered or sent by registered mail to the office of the director;

(b) on the commission if it is delivered or sent by registered mail to the office of the commission; and

(c) on the minister if it is delivered or sent by registered mail to the office of the minister or the deputy minister.

24(2) . Subsection 33(2) is amended

(a) by adding "the director, the commission or the minister" after "sent to an employer,"; and

(b) by adding ", the director, the commission or the minister" after "the employer" wherever it occurs.

PART 4

THE INCOME TAX ACT

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

25          The Income Tax Act is amended by this Part.

26(1)       The following is added after subsection 4(20.1):

Additional refund, 1987 taxation year

4(20.2)     Notwithstanding subsections 4(20) and (20.1 ), where a mutual fund trust has paid a tax under subsection 4(9) the mutual fund trust is entitled to receive an additional refund equal to the lesser of 1% of the taxable capital gains reported for the year by the trust, and the tax paid by the trust under subsection 4(9).

26(2)       The following is added after subsection 4(20.2):

Additional refund, 1988 and subsequent years

4(20.3)     Notwithstanding subsections 4(20) and (20.1), where a mutual fund trust has paid a tax under subsection 4(11) or (12) the mutual fund trust is entitled to receive an additional refund equal to the lesser of 4% of the taxable capital gains reported for the year by the trust, and the aggregate of the tax paid by the trust under subsections 4(11) and (12).

27(1)       The definition "non-qualifying business" in subsection 7.1(1) is amended

(a) by repealing clause (a) and substituting the following:

(a) a practice in respect of the supply of accounting, dental, legal, medical, veterinary, chiropractic, optometric, physiotherapy, chiropodic, podiatric, osteopathic, audiological, speech-therapy, occupational therapy, psychological or psychoanalytical services or other similar services that may be prescribed in the regulations;

(b) in subclause (c)(i), by adding ", insurance, travel, real estate, brokerage" before "or other similar services "; and

(c) in subclause (c)(ii), by striking out "or";

(d) by adding "or" at the end of subclause (c)(iii); and

(e) by adding the following after subclause (c)(iii):

(iv) farming,

27(2)       The following is added after subsection 7.1(3):

Deduction re corporation described in section 7.1(7.3)

7.1(3.1)    The minister may allow a deduction from the tax otherwise payable under this Act by a corporation described in subsection 7.1(7.3), of an amount equal to

(a) for the first taxation year of the corporation, 8%;

(b) for the second taxation year of the corporation, 6%;

(c) for the third taxation year of the corporation, 4%; and

(d) for the fourth taxation year of the corporation, 2%;

of an amount equal to, for each taxation year, that proportion of the least of the amounts determined under paragraphs 125(1)(a), (b) and (c) of the federal Act for the taxation year that

(e) the amount of that portion of its taxable income earned in the taxation year in Manitoba, determined in accordance with paragraph 124(4)(a) of the federal Act;

bears to

(f) the total amount of the portions of its taxable income earned in the taxation year in all provinces, determined in accordance with paragraph 124(4)(a) of the federal Act.

27(3)       The following is added after subsection 7.1(7.2):

Exception to section 7.1(7)

7.1(7.3)    Notwithstanding clause 7.1(7)(a), a corporation is eligible for a deduction under subsection 7.1(3.1) if

(a) the corporation acquires the assets of an unincorporated business;

(b) the shareholders of the corporation and the owners of the unincorporated business are the same individuals;

(c) the acquisition of the assets by the corporation from the unincorporated business occurs before the earlier of

(i) the end of the second taxation year of the unincorporated business, or

(ii) 24 months following the first day of operation of the unincorporated business; and

(d) the corporation complies with the other provisions of this Act and the regulations.

28          The following is added after section 7.1:

Manitoba manufacturing and processing tax credit

7.2(1)      There may be deducted from the tax otherwise payable under this Act by a corporation for a taxation year an amount not exceeding the lesser of

(a) its investment tax credit at the end of the year; and

(b) the tax otherwise payable by it under this Act for the year.

Definitions

7.2(2)      In this section,

"investment tax credit" of a corporation at the end of a taxation year means the amount, if any, by which the aggregate of

(a) an amount equal to 10% of the aggregate of all amounts each of which is the capital cost to the corporation of a qualified property acquired by it in the year, determined without reference to subsection 13(7.1) of the federal Act,

(b) an amount equal to 10% of the aggregate of all amounts each of which is the capital cost to the corporation of a qualified property acquired by it in any of the seven taxation years immediately preceding, or the three taxation years immediately following that year, determined without reference to subsection 13(7.1) of the federal Act,

(c) an amount equal to the aggregate of all amounts each of which is an amount required by subsection (3) or (4) to be added in computing its investment tax credit at the end of the year, and

(d) the aggregate of all amounts each of which is an amount required by subsection (3) or (4) to be added in computing its investment tax credit at the end of any of the seven taxation years immediately preceding or the three taxation years immediately following that year,

exceeds

(e) the aggregate of all amounts each of which is that portion of the amount deducted under subsection (1) from the tax otherwise payable under this Act by the corporation for a preceding taxation year that is in respect of property acquired in the year or in the seven taxation years immediately preceding or the two taxation years immediately following the year; («crédit d'impôt à l'investissement»)

"manufacturing or processing" has the meaning assigned by paragraph 125.1(3)(b) of the federal Act and includes "qualified activities" as defined by federal regulations made for the purposes of paragraph 125.1(3)(a) of the federal Act; («fabrication ou transformation»)

"qualified property" of a corporation means property acquired by the corporation, after March 11, 1992 and before July 1, 1993, that is qualified property within the meaning assigned by the definition thereof in subsection 127(9) of the federal Act, that has not been used, or acquired for use or lease, for any purpose whatever before it was acquired by the corporation and that is

(a) to be used by the corporation in Manitoba primarily for the purpose of manufacturing or processing of goods for sale or lease, or

(b) to be leased by the corporation to a lessee (other than a person exempt from tax under section 149 of the federal Act) who can reasonably be expected to use the property in Manitoba primarily for the purpose of manufacturing or processing of goods for sale or lease, but this subparagraph does not apply in respect of property that is machinery and equipment unless the property is leased by the corporation in the ordinary course of carrying on a business in Manitoba and the principal business of the corporation is manufacturing property that it sells or leases; («biens admissibles»)

Credit - trust beneficiary

7.2(3)      Where, in a particular taxation year of a corporation that is a beneficiary under a trust, an amount would, if the trust were a taxpayer, be determined in respect of the trust under clause (a) or (c) of the definition of "investment tax credit" in subsection (2) for its taxation year ending in that particular taxation year, the portion of that amount that may, having regard to all the circumstances including the terms and conditions of the trust, reasonably be considered to be the corporation's share thereof is the amount required to be added in computing the investment tax credit of the corporation at the end of that particular taxation year.

Credit - partnership

7.2(4)      Where, in a particular taxation year of a corporation that is a member of a partnership, an amount would, if the partnership were a taxpayer, be determined in respect of the partnership under clause (a) or (c) of the definition of "investment tax credit" in subsection (2) for its taxation year ending in that particular taxation year, the portion of that amount that may reasonably be considered to be the corporation's share thereof is the amount required to be added in computing the investment tax credit of the corporation at the end of that particular taxation year.

Credit - amalgamation

7.2(5)      Where after March 11, 1992, there has been an amalgamation within the meaning of subsection 87(1) of the federal Act and one or more of the predecessor corporations had an investment tax credit for any taxation year any portion of which was not deducted by it in computing its tax otherwise payable under this Act for any taxation year, for the purposes only of determining the investment tax credit of the new corporation for any taxation year preceding any taxation year of the new corporation, the new corporation shall be deemed to be the same corporation as, and a continuation of, each such predecessor corporation.

Credit - winding up

7.2(6)      Where after March 11, 1992 there has been a winding-up to which subsection 88(1) of the federal Act applies and the subsidiary had an investment tax credit for any taxation year any portion of which was not deducted by it in computing its tax otherwise payable under this Act for any taxation year, for the purposes only of determining the investment tax credit of the parent for any taxation year preceding any taxation year of the parent, the parent shall be deemed to be the same corporation as, and a continuation of, the subsidiary.

Definitions

7.3(1)      In this section,

"eligible expenditure" means an expenditure, made after March 11, 1992 by a corporation with a permanent establishment in Manitoba in respect of scientific research and experimental development to be carried out in Manitoba, that is a qualified expenditure under subsection 127(9) of the federal Act, without reference to paragraph (b) thereof; («dépense admissible»)

"research and development tax credit" of a corporation at the end of a taxation year means the amount, if any, by which the aggregate of

(a) an amount equal to 15% of the aggregate of all amounts each of which is an eligible expenditure made by it in the year, computed without reference to subsection 13(7.1) of the federal Act,

(b) an amount equal to 15% of the aggregate of all amounts each of which is an eligible expenditure made by it in any of the seven taxation years immediately preceding or the three taxation years immediately following that year, computed without reference to subsection 13(7.1) of the federal Act,

(c) an amount equal to the aggregate of all amounts each of which is an amount required by subsection (3) or (4) to be included in computing its research and development tax credit at the end of the year, and

(d) the aggregate of all amounts each of which is an amount required by subsection (3) or (4) to be included in computing its research and development tax credit at the end of any of the seven taxation years immediately preceding or the three taxation years immediately following that year,

exceeds the aggregate of all amounts each of which is that portion of the amount deducted under subsection (2) from the tax otherwise payable under this Act by the corporation for a preceding taxation year that is in respect of an expenditure made in the year or in the seven taxation years immediately preceding or the two taxation years immediately following the year. («crédit d'impôt pour la recherche et le développement»)

Deduction

7.3(2)      A corporation may deduct from the tax otherwise payable under this Act for a taxation year an amount not exceeding the lesser of

(a) its research and development tax credit at the end of the year; and

(b) its tax otherwise payable by it under this Act for the year.

Beneficiary of trust

7.3(3)      Where, in a particular taxation year of a corporation that is a beneficiary under a trust, an amount would, if the trust were a corporation, be included, by virtue of clause (a) or (c) of the definition of "research and development tax credit" as set out in subsection (1), in computing the research and development tax credit of the trust for its taxation year ending in that particular taxation year, the portion of that amount that may, having regard to all the circumstances including the terms and conditions of the trust, reasonably be considered to be the corporation's share thereof shall be included in computing the research and development tax credit of the corporation at the end of that particular taxation year.

Member of partnership

7.3(4)      Where, in a particular taxation year of a corporation which is a member of a partnership, an amount would, if the partnership were a corporation, be included, by virtue of clause (a) or (c) of the definition of "research and development tax credit" as set out in subsection (1), in computing the research and development tax credit of the partnership for its taxation year ending in that particular taxation year, the portion of that amount that may reasonably be considered to be the corporation's share thereof shall he included in computing the research and development tax credit of the corporation at the end of that particular taxation year.

Amalgamation

7.3(5)      Where, after March 11, 1992, two or more corporations amalgamate within the meaning of subsection 87(1) of the federal Act and one or more of the corporations had a research and development tax credit for any taxation year any portion of which was not deducted by it in computing its tax otherwise payable under this Act for any taxation year, for the purposes of determining the research and development tax credit of the new corporation for any taxation year preceding any taxation year of the new corporation, the new corporation shall be deemed to be the same corporation as and a continuation of each such predecessor corporation.

Winding-up

7.3(6)      Where, after March 11, 1992, a subsidiary is wound up within the meaning of subsection 88(1) of the federal Act and the subsidiary had a research and development tax credit for any taxation year any portion of which was not deducted by it in computing its tax otherwise payable under this Act for any taxation year, for the purposes of determining the research and development tax credit of the parent for any taxation year preceding any taxation year of the parent, the parent shall be deemed to be the same corporation as and a continuation of the subsidiary.

Renunciation of tax credit

7.3(7)      A corporation may renounce the research and development tax credit on or before the date by which the corporation is required to file its return of income for the year pursuant to section 150 of the federal Act and, where the corporation so renounces entitlement to that credit, the corporation shall be deemed for all purposes never to have received, have been entitled to receive, or have had a reasonable expectation of receiving, that credit.

PART 5

THE INSURANCE CORPORATIONS TAX ACT

C.C.S.M. c. 150 amended

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

30          The definition "insurer" in section 1 is amended by adding "and the United Health Services Corporation" after ""Lloyds"".

31          Subsection 8(1) is amended by striking out ", together with interest on the sum of the amount unpaid and the penalty at 6% per annum from the date when the tax, or portion thereof, became due until payment is made".

PART 6

THE LIQUOR CONTROL ACT

C.C.S.M. c. L160 amended

32          The Liquor Control Act is amended by this Part.

33          The following is added after subsection 8(3):

Agreements between the commission and Canada

8(4)        The commission may enter into an agreement with the Government of Canada as represented by the Minister of National Revenue in relation to liquor referred to in the agreement (referred to in this subsection as "liquor") that is brought into Manitoba from any place outside Canada,

(a) appointing officers, as defined in subsection 2(1) of the Customs Act (Canada), employed at customs offices located in Manitoba, as agents of the commission for the purposes of

(i) accepting, on behalf of the commission, liquor brought into Manitoba,

(ii) collecting, on behalf of the commission, the provincial fee from an individual bringing that liquor into Manitoba from a place outside Canada (referred to in this subsection as a "casual importer"),

(iii) selling and releasing, on behalf of the commission, to the casual importer, on payment of the provincial fee, the liquor in relation to which the provincial fee is paid, and

(iv) detaining the liquor on behalf of the commission and releasing it to the commission where the provincial fee is not paid by the casual importer;

(b) authorizing, in such circumstances and on such conditions as may be specified in the agreement, the payment, on behalf of the commission, to the casual importer, of a refund of all or any part of the provincial fee collected in accordance with subclause (a)(ii) and the agreement;

(c) requiring, in such manner and at such time as may be specified in the agreement, the remittance to the commission of the provincial fee collected in accordance with subclause (a)(ii) and the agreement;

(d) respecting forms to be used in relation to liquor brought into Manitoba; and

(e) respecting any other matter in relation to liquor brought into Manitoba.

Deemed agreement

8(5)        An agreement entered into between the commission and the Government of Canada before the coming into force of this section with respect to the matters described in subsection (4) is hereby validated and shall be deemed to have been made under this section.

34          The following is added after section 10:

Regulations respecting importation

10.1        Subject to the approval of the Lieutenant Governor in Council, the commission may make regulations

(a) for the purposes of an agreement under subsection 8(4), prescribing the provincial fee or prescribing a formula for establishing the provincial fee payable by individuals bringing liquor or any class of liquor referred to in an agreement made under subsection 8(4) into Manitoba from any place outside Canada;

(b) respecting any other matter the commission considers necessary or advisable to carry out the intent and purpose of an agreement entered into under subsection 8(4).

35          Clause 58(c) is amended by adding "or established in accordance with a formula prescribed" after "prescribed".

PART 7

THE MINING TAX ACT

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

36          The Mining Tax Act is amended by this Part.

37(1)       Subsection 1(1) is amended

(a) in the definition "director", by striking out "or the Director of the Mining and Use Taxes Branch of the Department of Finance"; and

(b) in the definition "preproduction expenses", by striking out "production from" and substituting "production, in reasonable commercial quantities, from".

37(2)       Subsection 1(1) is amended by striking out the definition "fiscal year" and substituting the following:

"fiscal year" means the period, which in no case may exceed 12 months, for which the accounts and financial statements of an operator are regularly prepared, and includes a short fiscal year; («exercice»)

37(3)       Subsection 1(1) is amended by adding the following definitions in alphabetical order:

"advanced exploration project" means

(a) excavation of an exploration shaft, adit or decline,

(b) construction of an all-weather access road to an advanced exploration site, or

(c) diversion, alteration or damming of a natural watercourse for purposes of bulk sampling, mine development or mining,

and such other project or class of project that is prescribed by regulation under The Mines and Minerals Act as an advanced exploration project; («ouvrage d'exploration avancée»)

"closure plan" means a plan that sets out a program for protection of the environment during the life of a project, and for rehabilitation of the project site upon closing of the project, and that includes the provision of security to the Crown for performance of rehabilitation work; («plan de fermeture»)

"progressive rehabilitation" means, in relation to a project site, rehabilitation of the project site that is carried out in the course of the operations of the project on the site; («remise en état progressive»)

"project" means

(a) a mine and includes the machinery, plant, buildings, premises, stockpiles, storage facilities, waste dumps or tailings, whether below or above ground, that are used for, or in connection with, mining, and

(b) an advanced exploration project; («ouvrage»)

"project site" means the land on which a project is located; («chantier»)

"rehabilitation" means, in relation to a project site, actions taken for the purpose of

(a) protecting the environment against adverse effects resulting from operations at the project site,

(b) minimizing the detrimental impact on adjoining lands of operations at the project site,

(c) minimizing hazards to public safety resulting from operations at the project site, and

(d) leaving the project site in a state that is compatible with adjoining land uses and that conforms, where applicable, to a planning scheme or development plan adopted under The Planning Act and to the specifications, limits, terms and conditions of a licence issued under The Environment Act in respect of the project; («remise en état»)

37(4)       Subsection 1(1) is amended by adding the following definitions in alphabetical order:

"new mine" means

(a) a mine

(i) that commences production after January 1, 1993,

(ii) that is separate and distinct geologically from any other mine or ore body as determined by the director, and

(iii) that has no common workings or mining operations with any other mine,

but does not include, as determined by the director,

(iv) a formerly operated mine, or

(v) a mineral deposit where advanced exploration, or development as defined in The Mines and Minerals Act, takes place on the project site prior to March 11, 1992; or

(b) where a mine does not qualify under clause (a), a mine that is declared by the Lieutenant Governor in Council to be a new mine under subsection 4.2(3); («nouvelle mine»)

"new mine tax holiday" means a program that exempts new mines from tax under this Act as set out in section 4.1; («exonération fiscale temporaire pour nouvelle mine»)

"new mine tax holiday period" means the period during which a new mine is eligible for the new mine tax holiday as determined under subsections 4.1(2) and (3); («période de l'exonération fiscale temporaire pour nouvelle mine»)

"tax holiday pool" means the amount relating to a new mine calculated in accordance with Formula 5 set out in the Schedule; («compte de l'exonération fiscale temporaire»)

37(5)       Subsection 1(1) is amended by adding the following definition in alphabetical order:

"short fiscal year" means the period of less than 12 months for which the accounts and financial statements of an operator are prepared when there is a change of fiscal year end approved under section 1.1; («exercice abrégé»)

37(6)       The following is added after section 1:

Change of fiscal year end

1.1         Any change to the date of an operator's fiscal year end for the purposes of this Act must be approved by the minister, who must be satisfied that the change is supported by sound business reasons.

38(1)       Section 4 is amended by renumbering it as subsection 4(1) and by striking out everything after "Schedule".

38(2)       The following is added after subsection 4(1):

Profit deemed nil

4(2)        Subject to subsection (3), where in the application of Formula 2 set out in the Schedule, the amount represented by E is greater than the amount represented by R, the profit of the operator for the fiscal year shall be deemed to be nil.

Exception to subsection 4(2): new mine loss

4(3)        Subsection (2) does not apply in determining the profit of an operator of a new mine in a new mine tax holiday period referred to in section 4.1.

Operator's profit excludes new mine

4(4)        The profit of an operator referred to in subsection (1) shall not include the operator's profit or loss from a new mine that is in a new mine tax holiday period.

39          The following is added after section 4:

Calculation of profit for new mine

4.1(1)      Subject to subsection (3), the profit of an operator in a fiscal year for a new mine that is eligible for the new mine tax holiday,

(a) shall be calculated separately as if the new mine was the only mine in which the operator had an interest; and

(b) shall be calculated in accordance with Formula 2 set out in the Schedule on the basis of only those revenues and expenses pertaining to the new mine and the annual depreciation allowance to be deducted shall be the amount which is equal to the lesser of

(i) the amount calculated under clause 7(1)(g) at the rate of 20% of the undepreciable balance of the new mine's assets, and

(ii) the amount calculated in accordance with Formula 2 for that new mine before deducting any depreciation allowance under clause 7(1)(g).

Duration of new mine tax holiday period

4.1(2)       An operator of a new mine is eligible for an exemption from tax on the profit from the new mine in a new mine tax holiday period until the fiscal year in which the tax holiday pool, calculated in accordance with Formula 5 set out in the Schedule, is nil or negative.

Profit from new mine at end of tax holiday period

4.1(3)      Where in a fiscal year the amount of the tax holiday pool, calculated in accordance with Formula 5 set out in the Schedule becomes nil or negative, the profit of the operator from a new mine that is in the new mine tax holiday period in that fiscal year is the amount which is calculated in accordance with Formula 6 set out in the Schedule.

Pre-approval as new mine

4.2(1)      Prior to filing a return under subsection 22(1), an operator may make a request in writing to the director to have a mine approved by the director as a new mine eligible for the new mine tax holiday.

Application for declaration as new mine

4.2(2)      Where a mine is not a new mine under clause (a) of the definition "new mine" in subsection 1(1), the operator may make an application to the minister responsible for The Mines and Minerals Act to have the mine declared a new mine eligible for the new mine tax holiday.

Declaration of new mine by L.G. in C.

4.2(3)      Where the minister responsible for The Mines and Minerals Act receives an application under subsection (2), the minister may submit the application to the Lieutenant Governor in Council to have the mine declared a new mine eligible for the new mine tax holiday.

Election: mine excluded from new mine tax holiday

4.3(1)      At the time a return is filed under subsection 22(1), an operator of a new mine may file an election with the director for the new mine to be excluded from the new mine tax holiday.

Effect of election

4.3(2)      If an election is filed under subsection (1),

(a) any profit from the new mine shall not be eligible for the new mine tax holiday calculated in accordance with section 4.1, for that current fiscal year or for subsequent fiscal years;

(b) the operator's processing assets with respect to the new mine shall not be subject to subsection 10(3.1) in that current fiscal year or in subsequent fiscal years;

(c) the undepreciated balance of the new mine's depreciable assets referred to in subsection 11(2.1) shall be added to the operator's undepreciated balance of depreciable assets referred to in clause 7(1)(g) in that current fiscal year; and

(d) the new mine is permanently excluded from the new mine tax holiday.

40(1)       Clause 7(1)(g) of the French version is amended by striking out "la dépréciation" and substituting "l'amortissement"

40(2)       Subsection 7(3) of the French version is amended by striking out "activiés" and substituting "activités".

40(3)       The following is added after subsection 7(3) :

Additional qualified exploration deduction

7(3.1)      Where qualified exploration expenses incurred in a fiscal year commencing after December 31, 1991 exceed a simple average of the qualified exploration expenses for the three immediately preceding fiscal years, in calculating the profit of an operator in any fiscal year commencing after December 31, 1991, there may be deducted in addition to an amount calculated under subsection 7(3), an amount equal to 50% of the amount by which the qualified exploration expenses incurred in that fiscal year exceed the simple average of the qualified exploration expenses for the three immediately preceding fiscal years.

Carry forward of amount under subsection 7(3.1)

7(3.2)      Subject to subsection (4), in calculating the profit of an operator in a fiscal year there may be deducted the amount of any deduction calculated under subsection (3.1) that has not been deducted under subsection (3.1) for the purpose of calculating the profit of the operator in any previous fiscal year.

40(4)       Subsection 7(4) is amended by striking out "subsection (3)" and substituting "subsection (3) or (3.1)".

40(5)       The following is added after subsection 7(4):

Deduction of rehabilitation expenses

7(5)        In calculating the profit of an operator in a fiscal year, there may be deducted

(a) expenses approved by the director that were incurred by the operator for the rehabilitation or progressive rehabilitation of a project site as set out in a closure plan approved by the Director of Mines appointed under The Mines and Minerals Act; and

(b) monies paid by the operator and credited to the Mine Rehabilitation Fund established under subsection 195(1) of The Mines and Minerals Act.

Refund from Mine Rehabilitation Fund

7(6)        In calculating the profit of an operator in a fiscal year, all monies and interest thereon returned to the operator in that fiscal year from the Mine Rehabilitation Fund under subsection 195(3) of The Mines and Minerals Act shall be included.

41          Section 9 is amended by renumbering it as subsection 9(1), and by adding the following as subsection 9(2):

Short fiscal year depreciation allowance

9(2)        Where the fiscal year is a short fiscal year, the depreciation allowance shall be the amount as calculated under clause 7(1)(g), multiplied by the number of days in the short fiscal year, and divided by 365.

42(1)       Subsection 10(3) is amended

(a) by striking out "subsection (5)" and substituting "subsections (3.1), (5)": and

(b) by adding "and (7)" after "(5)"

42(2)       The following is added after subsection 10(3):

New mine processing assets

10(3.1)     An operator

(a) shall account separately for processing assets that relate to a new mine in the new mine tax holiday period;

(b) shall not include the processing assets referred to in clause (a) in the calculation of any processing allowance under Formula 3 or 4 set out in the Schedule; and

(c) shall, where in the fiscal year the new mine tax holiday period expires, include the processing assets referred to in clause (a) in the calculation of any processing allowance under Formula 3 or 4 set out in the Schedule, for the next following fiscal year and for subsequent fiscal years.

42(3)       Subsection 10(4) is amended by striking out "subsection (5)" and substituting "subsections (5) and (7)".

42(4)       Subsection 10(5) is amended

(a) in the section heading, by striking out "and minimum"; and

(b) by adding ", other than a short fiscal year," after "Where for any fiscal year".

42(5)       Subsection 10(6) is amended by striking out "subsection (5)" and substituting "subsections (5) and (7)".

42(6)       The following is added after subsection 10(6):

Short fiscal year processing allowance

10(7)       For a fiscal year that is a short fiscal year, the director may approve a processing allowance calculated in accordance with subsections (3), (4) and (6), multiplied by the number of days in the short fiscal year, and divided by 365 but the total of those allowances approved for that short fiscal year under those subsections shall not be more than 65% of the profit of the operator in that short fiscal year as calculated before the allowances under those subsections but after the deduction of all expenses, payments and allowances deductible under section 7.

43(1)       Clause 11(1)(c) of the French version is amended by striking out "captial-actions" and substituting "capital-actions".

43(2)       Subsection 11(2) of the French version is amended by striking out "biens amortissables" and substituting "éléments d'actif amortissables".

43(3)       The following is added after subsection 11(2):

New mine depreciable assets

11(2.1)      Where an operator of a new mine in the new mine tax holiday period incurs expenditures for depreciable assets for that new mine after March 11, 1992, a depreciation allowance for the fiscal year as calculated under clause 4.1(1)(b) or, as calculated under subsection 9(2) where the fiscal year is a short fiscal year, shall be allowed for all such depreciable assets provided that they

(a) relate only to that new mine;

(b) are accounted for separately by the operator; and

(c) are approved by the director.

Undepreciated balance of new mine assets

11(2.2)     Where in a fiscal year the new mine tax, holiday period expires, the undepreciated balance of the new mine's depreciable assets referred to in subsection (2.1) shall be added to the operator's undepreciated balance of depreciable assets referred to in clause 7(1)(g), for the next following fiscal year.

44(1)       Subsection 13.1(2) is amended

(a) in the section heading, by striking out "for 1989, 1990 and 1991"; and

(b) by striking out "during the period commencing January 1, 1989 and ending December 31, 1991" and substituting "commencing after December 31,1988".

44(2)       Subsection 13.1(3) is amended in that part preceding clause (a), by striking out ", 1990 or 1991 taxation year" and substituting " or a subsequent taxation year".

45(1)       Subsection 14(1) is amended

(a) in that part preceding clause (a), by striking out "fiscal year shall pay" and substituting "fiscal year, other than for a short fiscal year, shall pay";

(b) in clause (a) of the French version, by striking out "25 jour" and substituting "25e jour"; and

(c) by adding ", or" at the end of subclause (a)(ii), and by adding the following after subclause (a)(ii):

(iii) where the next previous fiscal year referred to in subclause (a)(ii) was a short fiscal year, the amount of tax paid or payable by him for that next previous short fiscal year divided by the number of complete months in that short fiscal year;

(d) by striking out "March 25" in clause (b) and substituting "the 25th day of the third month".

45(2)       The following is added after subsection 14(1).

Time for payment of tax if short fiscal year

14(1.1)     Every operator liable for payment of a tax for a short fiscal year shall pay to the minister on account of the tax for that short fiscal year

(a) on or before the 25th day of each complete month in the short fiscal year, an amount equal to

(i) the amount of tax payable by him for that short fiscal year as estimated by him, divided by the number of complete months in that short fiscal year, or

(ii) the amount of tax paid or payable by him for the next previous fiscal year divided by 12; and

(b) on or before the 25th day of the third month of the next following fiscal year, the remainder, if any, of the tax payable by him for that short fiscal year as calculated under this Act.

45(3)       Subsection 14(2) is amended

(a) in the English version by striking out "by March 25" in the section heading; and

(b) by striking out "March 25 of the year following the taxation year" and substituting "the 25th day of the third month of the fiscal year following the taxation year".

46(1)       Clause 16(2)(a) is amended by adding "or, where that fiscal year is a short fiscal year, the tax payable by him for that short fiscal year divided by the number of complete months in that short fiscal year" after "year".

46(2)       Clause 16(2)(b) is amended by adding "or, where the next previous fiscal year was a short fiscal year, the tax paid or payable by him for that next previous short fiscal year divided by the number of complete months in that short fiscal year" after "year".

47          Subsection 22(1) is amended

(a) by striking out "June 30 in each year" and substituting "the last day of the sixth month following a fiscal year end"; and

(b) by striking out "the previous" and substituting "that".

48          The following Formulas are added in numerical order to the Schedule:

FORMULA 5 (section 4.1)

Tax Holiday Pool = H + A - D - P

In this formula

H

is the balance of the tax holiday pool of the operator relating to a new mine at the end of the previous fiscal year;

A

is the expenditures incurred after March 11, 1992 and prior to the new mine achieving production in reasonable commercial quantities, for the acquisition of depreciable assets of the new mine in the current fiscal year, in accordance with the Act;

D

is the proceeds of disposal for depreciable assets of the new mine in the current fiscal year, in accordance with the Act; and

P

is the new mine profit, before depreciation allowance, earned by the operator in the current fiscal year in accordance with subsection 4.1(1).

FORMULA 6 (subsection 4.1(3))

Tax Holiday Profit in the fiscal year the new mine tax holiday period ends = (H + A - D)/P x Q

In this formula

H

is the balance of the tax holiday pool of the operator relating to a new mine at the end of the previous fiscal year;

A

is the expenditures incurred after March 11, 1992 and prior to the new mine achieving production in reasonable commercial quantities, for the acquisition of depreciable assets of the new mine in the current fiscal year, in accordance with the Act;

D

is the proceeds of disposal for depreciable assets of the new mine in the current fiscal year, in accordance with the Act;

P

is the new mine profit, before depreciation allowance, earned by the operator in the current fiscal year in accordance with subsection 4.1(1); and

Q

is the new mine profit, after depreciation allowance, earned by the operator in the current fiscal year in accordance with subsection 4.1(1).

PART 8

THE MOTIVE FUEL TAX ACT

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

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

50(1)       Subsection 2(3) is amended by striking out "or in a railway locomotive,".

50(2)       Subsection 2(21) is amended by striking out "received" and substituting "consumed".

50(3)       Subsection 2(23) is repealed.

50(4)       Clause 2(28)(h) is amended by striking out "13.6¢" and substituting "12.6¢".

51          The following is added after section 34.1:

Directors liable

34.2(1)     Where a corporation that is a collector or a deputy collector has failed to collect tax or has collected tax and failed to remit the tax or has failed to pay any interest or penalty relating thereto, the directors of the corporation at the time the corporation was required to collect or remit the tax or to pay the interest or penalty relating thereto, are jointly and severally liable, together with the corporation, to pay such amounts.

Exceptions

34.2(2)     A director of a corporation is not liable under subsection (1) unless

(a) a warrant of execution for the amount of the corporation's liability as described in subsection (1) has been issued against the corporation under subsection 18(1) and has been directed to the sheriff for execution and the warrant has been returned by the sheriff unsatisfied in whole or in part;

(b) the corporation has commenced liquidation or dissolution proceedings, or has been dissolved, and a claim for the amount of the corporation's liability referred to in subsection (1) has been made;

(c) the corporation has lost control or possession of its property by order of a court or otherwise for the purpose of liquidation in receivership proceedings, sale by a secured creditor, winding up proceedings, or for the purpose of distribution to creditors pursuant to a general assignment made for the benefit of creditors and a claim for the amount of the corporation's liability referred to in subsection (1) has been made; or

(d) the corporation has made an assignment, or a receiving order has been made against it under the Bankruptcy Act (Canada), and a claim for the amount of the corporation's liability referred to in subsection (1) has been made.

Prudent director

34.2(3)     A director of a corporation is not liable for a failure described in subsection (1) if the director of the corporation exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances.

Estimates and assessments

34.2(4)     The director authorized to make estimates or assessments under this Act may make an estimate or assess any person for any amount payable by the person under this section and, where that director sends a notice of estimate or assessment, sections 23, 24, 25 and 26 apply in respect of the notice of estimate or assessment with such modifications as the circumstances require.

Time limit

34.2(5)     An estimate or assessment under subsection (4) of an amount payable by a person who is a director of a corporation shall not be made more than two years after the person last ceased to be a director of the corporation.

Liability of director after execution

34.2(6)     Where execution referred to in clause (2)(a) has been issued, the amount recoverable from a director of the corporation is the amount remaining unsatisfied after execution.

Rights of director upon payment

34.2(7)     Where a director of a corporation pays an amount in respect of a corporation's liability described in subsection (1), the director of the corporation is entitled to any preference that Her Majesty in right of Manitoba would have been entitled to had the amount not been so paid and, where a warrant of execution has been issued and directed to the sheriff, the director of the corporation is entitled to an assignment of the warrant of execution to the extent of that director's payment, and the minister is empowered to make the assignment.

Allocation by minister

34.2(8)     For the purposes of this section, the minister may apply any payment or payments made by or on behalf of the corporation under this Act to any of the liabilities described in subsection (1) including penalties and interest relating thereto.

Contribution

34.2(9)     A director of a corporation who satisfies a claim under this section is entitled to contribution from the other directors of the corporation who were liable for the claim.

Application of subsection (7)

34.2(10)    Where a director of a corporation who satisfies a claim under this section recovers contribution from any other director, subsection (7) applies with such modifications as the circumstances require to a director against whom contribution is recovered.

Application of various sections

34.2(11)    Subsections 17(1), (2), and (4) and (9) to (18) and sections 18 and 19 apply with such modifications as the circumstances require to a director of a corporation who fails to satisfy an estimate or assessment under this section.

PART 9

THE RETAIL SALES TAX ACT

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

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

53(1)       Subsection 1(1) is amended

(a) by repealing the definitions "designated land", "Indian" and "reserve"; and

(b) by adding the following definition in alphabetical order:

"commission" means the Tax Appeals Commission established under section 2 of The Tax Appeals Commission Act; («Commission»)

53(2)       The following is added after subsection 1(1):

Interpretation

1(1.1)      For greater certainty, this Act shall be interpretated so as not to derogate from the exemption from taxation of property under subsection 87(1) or (2) of the Indian Act (Canada).

53(3)       The following is added after subsection 1(3):

"Fair value" to include tax under section 2.1

1(4)        For the purposes of this Act and the regulations, "fair value" includes the tax payable under section 2.1.

54          The following is added after section 2:

Definitions

2.1(1)      In this section,

"motor vehicle" means tangible personal property that is a vehicle propelled by an internal combustion engine and intended to be operated on a highway, and includes a trailer that is designed to be drawn by such a vehicle; («véhicule automobile»)

"pneumatic tire" means a tire that is air-filled or designed to be air-filled and is designed for use on_ a motor vehicle, but does not include a retreaded tire; («pneu»)

"purchaser" means any person referred to in clause (a) or (b) of the definition "purchaser" in subsection 1(1) and includes a person who leases to another person a motor vehicle to which a pneumatic tire is attached or in connection with which a pneumatic tire is supplied. («acheteur»)

Interpretation of "sale", "consumption" and "new"

2.1(2)      For the purposes of this section,

(a) any sale of a motor vehicle to which a pneumatic tire is attached or in connection with which a pneumatic tire is supplied, is a sale of the pneumatic tire;

(b) consumption by a person of a pneumatic tire includes the leasing by that person to another person of a motor vehicle to which a pneumatic tire is attached or in connection with which a pneumatic tire is supplied; and

(c) a pneumatic tire shall be considered to be new from the time of its manufacture until immediately after its acquisition at its first retail sale anywhere.

Tax on new pneumatic tires

2.1(3)      Every purchaser of a new pneumatic tire at a retail sale in the province, other than a purchaser referred to in subsection (4), shall pay to Her Majesty in right of Manitoba a tax of $2.80 in respect of the consumption of the tire.

Exemptions

2.1(4)      The purchaser of a new pneumatic tire is exempted from the tax imposed by this section if the tire is exempted, or is acquired by the purchaser as part of a motor vehicle that is exempted,

(a) by regulation from the tax imposed by this section; or

(b) under clause 3(1)(i), (x), (ii) and (mm) or by regulation from the tax imposed by section 2.

55(1)       Subsections 3(1) and (2) of the French version are amended by striking out "occassion" wherever it occurs and substituting "occasion".

55(2)       Clause 3(1)(c) is repealed and the following is substituted:

(c) children's clothes, as defined by regulation, and children's footwear, as defined by regulation, but not including disposable diapers that are designed for babies or young children;

55(3)       Clause 3(1)(gg) is repealed.

55(4)       Subsections 3(I5) and (16) are repealed.

56(1)       Subsection 4(5) is repealed.

56(2)       The following is added after subsection 4(5):

1-800 telephone service

4(6)        Notwithstanding section 2 or subsection (1), no tax is payable for a 1-800 telephone service.

57          The following is added after subsection 13(5):

Additional penalties for failure to remit tax

13(5.1)     Where a person fails to remit to the minister tax collected or deemed to be collected under this Act within the time required or fails to pay any tax which the person is required to pay under this Act and the director is satisfied that the failure was attributable to the person's neglect or carelessness, the director may, in addition to any other penalty under this Act, assess a penalty against the person in an amount not exceeding 50% of the amount of tax not remitted or paid.

58          Subsection 16(5) is amended by adding "17.1," before "18 or 19".

59          The following is added after section 17:

Notice of objection to commission

17.1(1)     Where a person disputes the amount of an estimate made under section 16 or an assessment made under section 17, the person may directly, or by his or her agent, within 90 days after receiving the notice of estimate or assessment, appeal the estimate or assessment by serving on the commission and the director a notice of objection in writing setting forth clearly the reasons for the objection and any facts relative thereto.

Consideration of appeal by commission

17.1(2)     Upon receipt of a notice of objection, the commission shall make an investigation and inquiry in accordance with The Tax Appeals Commission Act and shall affirm, rescind or amend the estimate or assessment and forthwith serve notice of its decision on the appellant, the director and the minister.

Transition

17.1(3)     This section applies to an estimate or assessment from which, on the coming into force of this section, an appeal exists but has not been taken, to the same extent as if this section had been in force when the estimate or assessment was made.

60           Subsection 18(1) is repealed and the following is substituted:

Appeal from commission to minister

18(1)       The appellant, his or her agent or the director may, within 60 days after receipt of the notice of the decision of the commission, appeal the decision to the minister by serving a notice of appeal on the minister and on the other person entitled to appeal.

61          Subsection 19(1) is amended by adding ", other than the director," after "Where a person".

62          The following is added after section 20:

Definitions

20.1(1)     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 the tax benefit,

(ii) to reduce, avoid, or defer a tax or other amount payable as tax or in respect of tax under any other Act or increase a refund of tax or other amount in respect of tax under any other Act, or

(iii) both (i) and (ii),

(d) to be a transaction that would not result directly or indirectly in a misuse of the provisions of this Act or an abuse having regard to the provisions of this Act, other than this section, read as a whole; («opération d'évitement»)

"tax benefit" means a reduction, avoidance or deferral of tax or other amount payable under this Act or an increase in a refund of tax or other amount under this Act; («avantage fiscal»)

"tax consequences" to a person means the fair value, the tax or other amount payable by, or refundable to the person under this Act, or any other amount that is relevant for the purposes of computing that amount; («attribut fiscal»)

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

General anti-avoidance provision

20.1(2)     Where a transaction is an avoidance transaction, the tax consequences to a person shall be determined as 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.

Determination of tax consequences

20.1(3)     Without restricting the generality of subsection (2),

(a) any deduction in computing fair value or tax payable may be allowed or disallowed in whole or in part;

(b) any such deduction or part thereof 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 may be ignored;

in determining the tax consequences to a person as is reasonable in the circumstances in order to deny a tax benefit that would, but for this section, result, directly or indirectly, from an avoidance transaction.

Tax consequences through assessment

20.1(4)     The tax consequences to any person, following the application of this section, shall only be determined through a notice of estimate pursuant to section 16 or an assessment pursuant to section 17.

Request for adjustments

20.1(5)     Where, with respect to a transaction, a notice of estimate or assessment involving the application of subsection (2) with respect to that transaction has been sent to a person, any person, other than the person to whom the notice has been sent, shall be entitled, within 180 days after the day of mailing of the notice, to request in writing that the director make an assessment applying subsection (2) with respect to that transaction.

Duties of director

20.1(6)     On receipt of a request by a person under subsection (5), the director shall, with all due dispatch, consider the request and make an assessment, except that an assessment may be made under this subsection only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection (5).

Application

20.1(7)     This section applies with respect to a tax benefit that arises after March 10, 1992.

63          The following is added after section 22:

Agreement with Canada

22.1(1)     Subject to the approval of the Lieutenant Governor in Council, the minister may, on behalf of Her Majesty in right of Manitoba, enter into an agreement with the Government of Canada with respect to the administration and enforcement of this Act.

Deemed agreement

22.1(2)     An agreement entered into between the minister and the Government of Canada before the coming into force of this section with respect to the matters described in subsection (1) shall be deemed to have been made under this section.

64(1)       Subsections 24(1) and (2) are repealed and the following is substituted:

Offences

24(1)       Every person who

(a) contravenes any provision of this Act or of the regulations;

(b) makes a false statement in any form, application, record or return prescribed or required by this Act or by the regulations; or

(c) wilfully evades or attempts to evade the remittance or payment to the minister of the tax collected or deemed to be collected under this Act within the time required by this Act;

is guilty of an offence.

Penalty for contravention of clause (l)(a) or (b)

4(2)        Every person who is guilty of an offence under clause (1)(a) or (b) is liable, on summary conviction,

(a) in the case of a first offence to a fine of not less than $100. and not more than $2,000., or to imprisonment for a term of not more than three months, or to both; and

(b) in the case of a second or subsequent offence to a fine of not less than $250. and not more than $5,000., or to imprisonment for a term of not more than six months, or to both.

Penalty for contravention of clause (l)(c)

24(2.1)     Every person who is guilty of an offence under clause (1)(c) is liable, on summary conviction, to a fine equal to 100% of the amount of the tax that that person failed or refused to remit or pay, or to imprisonment for a term of not more than two years, or to both.

Separate offences

24(2.2)     Every contravention of subsection (1) in connection with a separate sale or transaction is a separate offence.

Additional order

24(2.3)     In addition to the penalty described in subsection (2) or (2.1), a justice shall order the person to pay, on or before any date that the justice may order, any tax that the person

(a) owes under this Act;

(b) collected under this Act but failed or refused to remit to the minister; or

(c) should have collected but failed or refused to collect under this Act;

including any arrears, interest and penalties thereon.

64(2)       Subsection 24(3) is amended by striking out "subsection (2)" and substituting "subsection (2.3)".

65          The following is added after section 24:

Directors liable

24.1(1)     Where a corporation has failed to collect tax or has collected tax and failed to remit the tax or has failed to pay any interest or penalty relating thereto, the directors of the corporation at the time the corporation was required to collect or remit the tax or to pay the interest or penalty relating thereto, are jointly and severally liable, together with the corporation to pay such amounts.

Exceptions

24.1(2)     A director of a corporation is not liable under subsection (1) unless,

(a) a warrant of execution for the amount of the corporation's liability as described in subsection (1) has been issued against the corporation under subsection 13(16) and has been directed to the sheriff for execution and the warrant has been returned by the sheriff unsatisfied in whole or in part;

(b) the corporation has commenced liquidation or dissolution proceedings, or has been dissolved, and a claim for the amount of the corporation's liability referred to in subsection (1) has been made;

(c) the corporation has lost control or possession of its property in a manner described in section 10_ and a claim for the amount of the corporation's liability referred to in subsection (1) has been made; or

(d) the corporation has made an assignment or a receiving order has been made against it under the Bankruptcy Act (Canada), and a claim for the amount of the corporation's liability referred to in subsection (1) has been made.

Prudent director

24.1(3)     A director of a corporation is not liable for a failure described in subsection (1) if the director of the corporation exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances.

Estimates and assessments

24.1(4)     The director authorized to make estimates or assessments under this Act may make an estimate or assess any person for any amount payable by the person under this section and, where the director sends a notice of estimate or an assessment, sections 16, 17, 17.1, 18, 19 and 20 apply in respect of a notice of estimate or an assessment with such modifications as the circumstances require.

Time limit

24.1(5)     An estimate or assessment under subsection (4) of an amount payable by a person who is a director of a corporation shall not be made more than two years after the person last ceased to be a director of the corporation.

Liability of director after execution

24.1(6)     Where execution referred to in clause (2)(a) has been issued, the amount recoverable from a director of the corporation is the amount remaining unsatisfied after execution.

Rights of director upon payment

24.1(7)     Where a director of a corporation pays an amount in respect of a corporation's liability described in subsection (1), the director of the corporation is entitled to any preference that Her Majesty in right of Manitoba would have been entitled to had the amount not been so paid and, where a warrant of execution has been issued and directed to the sheriff, the director of the corporation is entitled to an assignment of the warrant of execution to the extent of that director's payment, and the minister is empowered to make the assignment.

Allocation by minister

24.1(8)     For the purposes of this section, the minister may apply any payment or payments made by or on behalf of the corporation under this Act to any of the liabilities described in subsection (1) including penalties and interest relating thereto.

Contribution

24.1(9)     A director of a corporation who satisfies a claim under this section is entitled to contribution from the other directors of the corporation who were liable for the claim.

Application of subsection (7)

24.1(10)    Where a director of a corporation who satisfies a claim under this section recovers contribution from any other director, subsection (7) applies with such modifications as the circumstances require to a director against whom contribution is recovered.

Application of various sections

24.1(11)    Subsections 13(4), (5), (5.1), and (12) to (19) and section 14 apply with such modifications as the circumstances require to a director of a corporation who fails to satisfy an estimate or assessment under this section.

66(1)       Subsection 26(1) is amended by striking out "All monies" and substituting "Subject to subsection (1.1), all monies".

66(2)       The following is added after subsection 26(1):

Proceeds of tax on tires and disposable diapers

26(1.1)     The minister shall

(a) annually determine the amount of tax that is received during the fiscal year as proceeds from

(i) the tax on disposable diapers designed for babies or young children imposed under subsection 2(1); and

(ii) the tax on tires imposed under section 2.1 and that portion of the tax imposed under subsection 2(1) that is imposed in respect of the tax under section 2.1; and

(b) credit that amount in the books of the government to the same account as the environmental protection tax imposed by Part IV of The Revenue Act.

66(3)       Subsection 26(2) is amended by striking out "if application for refund has been made within two years of the date the overpayment was received".

66(4)       The following is added after subsection 26(2.1):

Limitation

26(2.2)     No refund of an amount that is paid or remitted as tax is payable under this Act or the regulations unless an application for a refund of that amount is made to the minister

(a) in the case of a person not resident in Canada, within such time as is prescribed by regulation; and

(b) in the case of a person resident in Canada, within two years after the date the amount was received as tax.

67          Subsection 28(2) is amended by striking out "The Retail Sales Tax Branch" and substituting "the Taxation Division".

68          The following is added after section 28:

Application

28.1(1)     This section does not apply with respect to the service, delivery or sending of any notice or document for which specific provision is made elsewhere in this Act.

Notices, etc.

28.1(2)     Where, under this Act, any notice or document is required to be served on, delivered to or sent to a person, other than the director, the commission or the minister, it is sufficiently served, delivered or sent

(a) if it is delivered to any office of that person in Manitoba; or

(b) if it is sent by registered mail addressed to the person at the address in Manitoba shown on the most recent return of the person filed under this Act or as last known to the director.

Service on director, commission, minister

28.1(3)     A notice or other document that is required to be served under this Act on the director, the commission or the minister is sufficiently served

(a) on the director if it is delivered or sent by registered mail to the office of the director;

(b) on the commission if it is delivered or sent by registered mail to the office of the commission; and

(c) on the minister if it is delivered or sent by registered mail to the office of the minister or the deputy minister.

Time of service, etc.

28.1(4)     Where, under this Act, any notice or document to a person required to be served on, delivered to or sent is sent by registered mail, the recipient shall be deemed to have received the notice or document on the second day after the day on which it was mailed not including any day on which the post office is closed.

69          Section 29 is amended

(a) by renumbering it as subsection 29(1);

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

(u) prescribing a time for the purpose of clause 26(2.2)(a);

(v) respecting refunds of tax paid under this Act and prescribing the terms and conditions under which refunds may be made;

(w) respecting any matter that the Lieutenant Governor in Council considers necessary or advisable to carry out an agreement made under section 22.1 with respect to the administration and enforcement of this Act;

(c) by adding the following after clause (w):

(x) providing for the exemption of a class or classes of persons or tangible personal property or services from this Act or the regulations or any provision of this Act or the regulations.

(d) by adding the following after subsection (1):

Regulations under clause (1)(w)

29(2)       Where an agreement is made in respect of the administration and enforcement of this Act by officers as defined in section 2 of the Customs Act (Canada) (hereinafter referred to as "officers") employed at customs offices in the province, regulations made under clause (1)(w) may, without limiting the generality of that clause,

(a) define "purchaser", "fair value", "service" and "tangible personal property" for the purposes of such administration and enforcement,

(b) authorize officers to administer and enforce this Act,

(c) require purchasers to make reports, produce evidence and pay tax to officers,

(d) provide for the detention, payment of expenses related to detention, release, forfeiture and disposal of tangible personal property by officers in connection with the administration and enforcement of this Act; and

(e) provide for the immunity of officers from liability in the exercise of powers or the performance of duties respecting the administration and enforcement of this Act.

(e) by adding the following after subsection (2):

Regulations under clause (i)(u), (v) or (w)

29(3)       A regulation made under clause (1)(u), (v) or (w) is, if it so provides, effective with reference to a period before it was registered, if that period commences not earlier than July 1, 1992.

PART 10

THE REVENUE ACT

C.C.S.M. c. R150 amended

70          The Revenue Act is amended by this Part.

71          The following is added after section 5:

Refund of amounts paid as tax

5.1(1)      The minister shall refund to a purchaser any amount paid as tax by the purchaser that is not payable as tax or that is in excess of the amount payable as tax under this Act.

Limitation

5.1(2)      Notwithstanding subsection (1) or any other provision of this Act, no refund of an amount that is paid as tax is payable unless

(a) an application for refund of the amount is made within two years after the date on which the amount was received by the minister; and

(b) the amount of the refund exceeds $25. or such other amount as may be prescribed by regulation.

72          The following is added after section 22:

Directors liable

22.1(1)     Where a corporation has failed to collect tax or has collected tax and failed to remit the tax or has failed to pay any interest or penalty relating thereto, the directors of the corporation at the time the corporation was required to collect or remit the tax or to pay the interest or penalty relating thereto, are jointly and severally liable, together with the corporation, to pay such amounts.

Exceptions

22.1(2)     A director of a corporation is not liable under subsection (1) unless

(a) a warrant of execution for the amount of the corporation's liability as described in subsection (1) has been issued against the corporation under subsection 12(12) and has been directed to the sheriff for execution and the warrant has been returned by the sheriff unsatisfied in whole or in part;

(b) the corporation has commenced liquidation or dissolution proceedings, or has been dissolved, and a claim for the amount of the corporation's liability referred to in subsection (1) has been made;

(c) the corporation has lost control or possession of its property by order of a court or otherwise for the purpose of liquidation in receivership proceedings, sale by a secured creditor, winding up proceedings, or for the purpose of distribution to creditors pursuant to a general assignment made for the benefit of creditors and a claim for the amount of the corporation's liability referred to in subsection (1) has been made; or

(d) the corporation has made an assignment or a receiving order has been made against it under the Bankruptcy Act (Canada), and a claim for the amount of the corporation's liability referred to in subsection (1) has been made.

Prudent director

22.1(3)     A director of a corporation is not liable for a failure described in subsection (1) if the director of the corporation exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances.

Estimates and assessments

22.1(4)     The director authorized to make estimates or assessments under this Act may make an estimate or assess any person for ally amount payable by the person under this section and, where that director sends a notice of estimate or notice of assessment, section 16, 17, 18, 19 and 20 apply in respect of the notice of estimate or assessment with such modifications as the circumstances require.

Time limit

22.1(5)     An estimate or assessment under subsection (4) of any amount payable by a person who is a director of a corporation shall not be made more than two years after the person last ceased to be a director of the corporation.

Liability of director after execution

22.1(6)     Where execution referred to in clause (2)(a) has been issued, the amount recoverable from a director of the corporation is the amount remaining unsatisfied after execution.

Rights of director upon payment

22.1(7)     Where a director of a corporation pays an amount in respect of a corporation's liability described in subsection (1), the director of the corporation is entitled to any preference that Her Majesty in right of Manitoba would have been entitled to had the amount not been so paid and, where a warrant of execution has been issued and directed to the sheriff, the director of the corporation is entitled to an assignment of the warrant of execution to the extent of that director's payment, and the minister is empowered to make the assignment.

Allocation by minister

22.1(8)     For the purposes of this section, the minister may apply any payment or payments made by or on behalf of the corporation under this Act to any of the liabilities described in subsection (1) including penalties and interest relating thereto.

Contribution

22.1(9)     A director of a corporation who satisfies a claim under this section is entitled to contribution from the other directors of the corporation who were liable for the claim.

Application of subsection (7)

22.1(10)    Where a director of a corporation who satisfies a claim under this section recovers contribution from any other director, subsection (7) applies with such modifications as the circumstances require to a director against whom contribution is recovered.

Application of various provisions

22.1(11)    Subsections 12(3), 12(9) to (13) and and section 13 apply with such modifications as the circumstances require to a director of a corporation who fails to satisfy an estimate or assessment under this section.

73          Clause 24(1)(j) is amended by adding "the minimum amount of," after "form of applications for,".

PART 11

THE TOBACCO TAX ACT

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

74          The Tobacco Tax Act is amended by this Part.

75          Section 1 is amended

(a) in the definition "collector", by adding "or an agent for enforcement" after "deputy collector";

(b) in the definition "director", by striking out "or the Director of the Mining and Use Taxes Branch of the Department of Finance";

(c) in the definition "purchaser" by adding ", except in sections 20.1 and 20.2," before "means";

(d) by adding the following definitions in alphabetical order:

"agent for collection of the Canada Post Corporation" means any person authorized in writing by Canada Post Corporation to collect as its agent duties as defined in the Customs Act (Canada) under terms and conditions consistent with a collection agreement in respect of mail; («agent de perception de la Société canadienne des postes»)

"agent for enforcement" means

(a) an officer as defined in section 2 of the Customs Act (Canada) employed at a customs office in the Province,

(b) the Canada Post Corporation, where the Minister of National Revenue has entered into a collection agreement with that Corporation in respect of mail, and

(c) any agent for collection of the Canada Post Corporation; («agent d'exécution»)

"collection agreement in respect of mail" means an agreement in writing between the Minister of National Revenue and Canada Post Corporation pursuant to which the Minister authorizes the Corporation, and the Corporation agrees, to collect as agent of the Minister duties as defined in the Customs Act (Canada) in respect of mail. («accord de perception relatif au courrier»)

(e) by adding the following definitions in alphabetical order:

"Manitoba marked cigarettes" means packages, cartons and cases of cigarettes that are marked as required under the regulations; («cigarettes marquées du Manitoba»)

"Manitoba unmarked cigarettes" means packages, cartons and cases of cigarettes, other than Manitoba marked cigarettes, that are authorized to be sold by a retail dealer pursuant to a licence issued under clause 4(1.1)(b); («cigarettes non marquées du Manitoba»)

76(1)       Subsection 2(1) is repealed and the following is substituted:

Imposition of tax

2(1)        Every purchaser shall pay to Her Majesty in right of Manitoba, for the public use of the government, a tax at a rate of

(a) 8¢ on every cigarette;

(b) 45% of the price at retail of every cigar;

(c) 75¢ on every 1/2 ounce, or part of 1/2 ounce, of any tobacco, other than cigarettes or cigars where the package in which it is contained or sold at retail indicates thereon the weight of tobacco therein in units of measurement set out and defined in Schedule 2 of the Weights and Measures Act (Canada); and

(d) 5.3¢ on every gram, or fraction thereof, of any tobacco other than cigarettes or cigars where the package in which it is contained or sold at retail indicates thereon the weight of tobacco expressed in the International System of Units (SI).

76(2)       Subsection 2(3) is repealed and the following is substituted:

Tax payable in other circumstances

2(3) A purchaser other than

(a) a purchaser who acquires tobacco from a dealer and has paid the tax to the dealer; or

(b) a purchaser as defined in subsection 20.1(1) who has paid the tax in accordance with section 20.2;

shall without delay make a report to the minister in such form and containing such information as is prescribed in the regulations and shall pay the minister the tax in respect of that tobacco.

76(3)       Clause 2(6)(b) is amended by striking out "the purchaser acquires the cigar otherwise than from a dealer" and substituting "a purchaser, other than a purchaser referred to in clause 2(3)(a) or (b), acquires the cigar,".

77          The following is added after subsection 4(1):

Licence limited to sale of certain products

4(1.1)      A person may, for the purpose of subsection (1), be issued one or both of the following retailer dealer's licences:

(a) a licence to sell Manitoba marked cigarettes and tobacco products that are not cigarettes;

(b) a licence to sell Manitoba unmarked cigarettes and tobacco products that are not cigarettes.

78          Subsections 9(3.2), 9(3.3), 9(3.4) and 9(3.5) are amended

(a) in the section headings, by striking out "Marked product" and substituting "Non-Manitoba tobacco"; and

(b) in the subsections, by striking out "marked product" wherever it occurs and substituting "non-Manitoba tobacco".

79(1)       The following is added after subsection 9(4.1):

Sale of Manitoba unmarked cigarettes

9(4.2)      No person shall sell Manitoba unmarked cigarettes or possess Manitoba unmarked cigarettes for the purpose of sale unless the person

(a) is a retail dealer who is licensed under clause 4(1.1)(b) to sell Manitoba unmarked cigarettes; or

(b) is a wholesale dealer who possesses Manitoba unmarked cigarettes for the purpose of sale to a retail dealer described in clause (a).

Possession of Manitoba unmarked cigarettes

9(4.3)      No person, other than a person permitted by this Act or the regulations, shall possess more than 200 Manitoba unmarked cigarettes.

79(2)       Subsections 9(5), 9(7), 9(8) and 9(9) are amended by striking out "or (3.4)" and substituting ", (3.4), (4.2) or (4.3)".

80          The following is added after section 20:

COLLECTION OF TAX AT CUSTOMS

Definition

20.1(1)     In this section and section 20.2, "purchaser" means an individual who

(a) resides or is ordinarily resident or carries on business in the province; and

(b) brings tobacco or causes tobacco to be brought into, or receives delivery of tobacco in, the province from outside Canada for his or her own use, or the use by others at his or her expense, or on behalf of, or as the agent for, a principal who desires to acquire the tobacco for use by him or her or other persons at his or her expense.

Agreement with Canada re collection of tax

20.1(2)     Subject to the approval of the Lieutenant Governor in Council, the minister may, on behalf of Her Majesty in right of Manitoba, enter into an agreement with the Government of Canada with respect to the administration and enforcement in the province of this Act in respect of tobacco that is brought or caused to be brought into the province by a purchaser, or delivered in the province to a purchaser, from outside Canada.

Deemed agreement

20.1(3)     An agreement entered into between the minister and the Government of Canada before the coming into force of this section with respect to the matters described in subsection (2) shall be deemed to have been made under this section.

Definition of "price at retail"

20.2(1)     For the purposes of determining the amount of tax payable on a cigar under this section, the "price at retail" of a cigar is deemed to be the same as the value of that cigar determined for the purposes of calculating the tax payable on the cigar under Division III of Part IX of the Excise Tax Act (Canada) as amended from time to time.

Agent for enforcement authorized to collect tax

20.2(2)     An agent for enforcement is authorized to collect the tax from a purchaser.

Purchaser to pay tax

20.2(3)      Subject to subsection (4), a purchaser shall at the time he or she brings tobacco or causes tobacco to be brought into, or receives delivery of the tobacco in, the province

(a) make such report to the agent for enforcement as that agent for enforcement shall require with respect to the tobacco;

(b) produce or forward to the agent for enforcement a receipt or other evidence, if any, in respect of the acquisition of tobacco that is a cigar; and

(c) pay the tax payable in respect of the tobacco to the agent for enforcement.

Exception

20.2(4)     No tax is payable on tobacco under subsection (3) if no tax is payable in respect of that tobacco under Division III of Part IX of the Excise Tax Act (Canada) as that division is amended from time to time.

Failure to report or pay tax

20.2(5)     Where a purchaser fails or refuses

(a) to make the report required by clause (3)(a); or

(b) to pay the tax required by clause (3)(c);

the agent for enforcement may detain the tobacco until the tax payable in respect of the tobacco at the time of its detention and any expenses related to the detention are paid or until the expiration of 60 days after the date of the commencement of the detention, whichever first occurs.

Forfeiture and disposal

20.2(6)     If the tax payable in respect of the tobacco and the expenses relating to its detention are not paid within the time set out in subsection (5), the tobacco is forfeited to Her Majesty in right of Manitoba and may be disposed of as directed by the minister.

Refunds and collection of underpayments

20.2(7)     The Government of Canada is authorized

(a) to collect tax owing in respect of tobacco that was released from customs without payment of all or part of that tax; and

(b) to refund any amount that was collected by an agent for enforcement that is in excess of the amount of the tax in respect of tobacco;

in accordance with the terms and conditions of an agreement under subsection 20.1(2).

Immunity of agents for enforcement

20.2(8)     No action or proceeding may be brought against an agent for enforcement with respect to any act done in good faith by that agent for enforcement in the exercise or intended exercise of a power or the performance or intended performance of a duty under this section, or for the neglect or default in the exercise or performance in good faith of such power or duty.

81(1)       Subsection 26(1) is amended

(a) in clause (a),

(i) by striking out "$100." and substituting "$200.", and

(ii) by striking out "$150." and substituting "$300."; and

(b) in clause (b),

(i) by striking out "$500." and substituting "$1,000.", and

(ii) by striking out "$750." and substituting "$1,500."

81(2)       Subsection 26(2) is amended

(a) in the section heading, by adding ", (4.2), (4.3)" after"(3.4)";

(b) in that part of the subsection preceding clause (a), by striking out "or 9(3.4)" and substituting ", 9(3.4), 9(4.2) or 9(4.3)";

(c) in clause (a),

(i) by striking out "$100." and substituting "$200.", and

(ii) by striking out "$2,000." and substituting "$4,000."; and

(d) in clause (b),

(i) by striking out "$1,000." and substituting "$2,000.", and

(ii) by striking out "$10,000." and substituting "$20,000."

81(3)       Subsection 26(2.1) is amended by striking out "or 9(3.4)" and substituting ", 9(3.4), 9(4./2) or 9(4.3)".

82          The following is added after subsection 26.1(2):

Directors liable

26.2(1)     Where a corporation that is a collector or a deputy collector has failed to collect tax or has collected tax and failed to remit the tax or has failed to pay any interest or penalty relating thereto, the directors of the corporation at the time the corporation was required to collect or remit the tax or to pay the interest or penalty relating thereto, are jointly and severally liable, together with the corporation, to pay such amounts.

Exceptions

26.2(2)     A director of a corporation is not liable under subsection (1) unless

(a) a warrant of execution for the amount of the corporation's liability as described in subsection (1) has been issued against the corporation under subsection 14(14) and has been directed to the sheriff for execution and the warrant has been returned by the sheriff unsatisfied in whole or in part;

(b) the corporation has commenced liquidation or dissolution proceedings, or has been dissolved, and a claim for the amount of the corporation's liability referred to in subsection (1) has been made;

(c) the corporation has lost control or possession of its property by order of a court or otherwise for the purpose of liquidation in receivership proceedings, sale by a secured creditor, winding up proceedings, or for the purpose of distribution to creditors pursuant to a general assignment made for the benefit of creditors and a claim for the amount of the corporation's liability referred to in subsection (1) has been made; or

(d) the corporation has made an assignment or a receiving order has been made against it under the Bankruptcy Act (Canada) and a claim for the amount of the corporation's liability referred to in subsection (1) has been made.

Prudent director

26.2(3)     A director of a corporation is not liable for a failure described under subsection (1) if the director of the corporation exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances.

Estimates and assessments

26.2(4)     The director authorized to make estimates or assessments under this Act may assess any person for any amount payable by the person under this section and, where that director sends a notice of estimate or assessment, sections 21, 22, 23, 24 and 25 apply with respect to the notice of estimate or assessment with such modifications as the circumstances require.

Time limit

26.2(5)     An estimate or assessment under subsection (4) of an amount payable by a person who is a director of a corporation shall not be made more than two years after the person last ceased to be a director of the corporation.

Liability of director after execution

26.2(6)     Where execution referred to in clause (2)(a) has been issued, the amount recoverable from a director of the corporation is the amount remaining unsatisfied after execution.

Rights of director upon payment

26.2(7)     Where a director of a corporation pays an amount in respect of a corporation's liability described in subsection (1), the director of the corporation is entitled to any preference that Her Majesty in right of Manitoba would have been entitled to had the amount not been so paid and, where a warrant of execution has been issued and directed to the sheriff, the director of the corporation is entitled to an assignment of the warrant of execution to the extent of that director's payment, and the minister is empowered to make the assignment.

Allocation by minister

26.2(8)     For the purposes of this section, the minister may apply any payment or payments made by or on behalf of the corporation under this Act to any of the liabilities described in subsection (1) including penalties and interest relating thereto.

Contribution

26.2(9)     A director of a corporation who satisfies a claim under this section is entitled to contribution from the other directors of the corporation who were liable for the claim.

Application of subsection (7)

26.2(10)     Where a director of a corporation who satisfies a claim under this section recovers contribution from any other director, subsection (7) applies with such modifications as the circumstances require to a director against whom contribution is recovered.

Application of various provisions

26.2(11)    Subsection 14(4), subsections 14(11) to (15) and sections 15, 16 and 17 apply with such modifications as the circumstances require to a director of a corporation who fails to satisfy an estimate or assessment under this section.

83          Section 28 is amended

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

(j.l) providing that tobacco or any class of tobacco or persons or any class of persons in respect of tobacco or a class of tobacco is exempted from this Act or any provision of this Act;

(b) by adding the following after clause (j.]):

(j.2) permitting persons to possess Manitoba unmarked cigarettes for the purpose of subsection 9(4.3);

(c) by repealing clauses (o) and (p) and substituting the following:

(o) prescribing the marking of packages, cartons or cases of cigarettes indicating that the cigarettes in the package, carton or case are taxable under this Act;

(d) by adding the following after clause (t):

(u) respecting any other matter the Lieutenant Governor in Council considers necessary or advisable to carry out the intent and purpose of an agreement made under subsection 20.1(2) or to give effect to the intent and purpose of section 20.2.

PART 12

THE UNITED HEALTH SERVICES CORPORATION INCORPORATION ACT

R.S.M. 1990, c. 201 amended

84          The United Health Services Corporation Incorporation Act is amended by this Part.

85          Section 10 is amended by striking out "The corporation" and substituting "Except as provided in The Insurance Corporations Tax Act, the corporation".

PART 13

COMING INTO FORCE

Coming into force

86          Subject to sections 87 to 97, this Act comes into force on the day it receives royal assent.

Part 1: Corporation Capital Tax Act

87(1)       Sections 2 and 6 to 10 come into force on the day The Tax Appeals Commission Act comes into force.

Corporation Capital Tax Act: section 3

87(2)       Section 3 is retroactive and deemed to have come into force on January 1,1992.

Corporation Capital Tax Act: section 4

87(3)       Section 4 is retroactive and deemed to have come into force on March 11, 1992.

Part 2: Gasoline Tax Act

88          Section 12 comes into force on July 1, 1992 and, if this Act receives royal assent after that date, section 12 is retroactive and deemed to have come into force on July 1, 1992.

Part 3: Health and Post Secondary Education Tax Levy Act

89(1)       Sections 15, 19 to 22 and 24 corne into force on the day The Tax Appeals Commission Act comes into force.

Health and Post Secondary Education Tax Levy Act: sections 16 and 23

89(2)       Sections 16 and 23 are retroactive and deemed to have come into force on January 1, 1992.

Part 4: Income Tax Act

90(1)       Subsection 26(1) is retroactive and deemed to have come into force on January 1, 1987.

Income Tax Act: subsection 26(2)

90(2)       Subsection 26(2) is retroactive and deemed to have come into force on January 1, 1988.

Income Tax Act: section 27

90(3)       Section 27 is retroactive and deemed to have come into force on April 17, 1991.

Income Tax Act: section 28

90(4)       Section 28 is retroactive and deemed to have come into force on March 12, 1992.

Part 5: Insurance Corporations Tax Act

91          Section 30 comes into force on August 1, 1992.

Part 6: Liquor Control Act.

92          Sections 33 to 35 comes into force on July 1, 1992 and if this Act receives royal assent after that date, sections 33 to 35 are retroactive and deemed to have come into force on July 1, 1992.

Part 7: Mining Tax Act

93(1)       Subsections 37(2), 37(5), and 37(6), section 41, clause 42(1)(b), subsections 42(3) to (6), clauses 45(1)(a), (c) and (d), subsections 45(2) and (3), and sections 46 and 47 are retroactive and deemed to have come into force on January 1, 1991.

Mining Tax Act: subsections 37(3) and 40(5)

93(2)       Subsections 37(3) and 40(5) are retroactive and deemed to have come into force on April 1, 1992.

Part 8: Motive Fuel Tax Act

94(1)       Subsections 50(1), (2) and (3) are retroactive and deemed to have come into force on April 1 , 1992.

Motive Fuel Tax Act: subsection 50(4)

94(2)       Subsection 50(4) comes into force on July 1, 1992 and if this Act receives royal assent after that date, subsection 50(4) is retroactive and deemed to have come into force on July 1, 1992.

Part 9: Retail Sales Tax Act

95(1)       Clause 53(1)(a), subsection 53(2), subsection 55(4) and subsection 56(1) come into force on a day fixed by proclamation.

Retail Sales Tax Act: subsection 56(2)

95(2)       Subsection 56(2) is retroactive and deemed to have come into force on May 1, 1992.

Retail Sales Tax Act: clause 53(1)(b), sections 58 to 61 and 68

95(3)       Clause 53(1)(b), sections 58 to 61 and 68 come into force on the day The Tax Appeals Commission Act comes into force.

Retail Sales Tax Act: section 62

95(4)       Section 62 is retroactive and deemed to have come into force on March 11, 1992.

Retail Sales Tax Act: subsection 55(3), section 63, subsections 66(3) and (4) and clauses 69(a), (b), (d) and (e)

95(5)       Subsection 55(3), section 63, subsections 66(3) and (4) and clauses 69(a), (b), (d) and (e) come into force on July 1, 1992 and, if this Act receives royal assent after that date, subsection 55(3), section 63, subsections 66(3) and (4) and clauses 69(a), (b), (d) and (e) are retroactive and deemed to have come into force on July 1, 1992.

Retail Sales Tax Act: coming into force and repeal of certain provisions

95(6)       Subsection 53(3), section 54, subsection 55(2) and subsections 66(1) and (2) come into force on August 1, 1992 and subsection 1(4), section 2.1 and clause 26(1.1)(a)(ii), as enacted respectively by subsection 53(3), section 54 and subsection 66(2) of this Act, are repealed on July 31, 1993.

Part 11: Tobacco Tax Act

96(1)       Clauses 75(a), (c) and (d), sections 76 and 80 and clause 83(d) come into force on July 1, 1992, and if this Act receives royal assent after that date, clauses 75(a), (c) and (d), sections 76 and 80 and clause 83(d) are retroactive and deemed to have come into force on July 1,1992.

Tobacco Tax Act: clause 75(e), sections 77 to 79, 81 and clauses 83(a) to (c)

96(2)       Clause 75(e), sections 77, 78, 79 and 81 and clauses 83(a), (b) and (c) come into force on a day fixed by proclamation.

Part 12: United Health Services Corporation Incorporation Act

97          Section 85 comes into force on August 1, 1992.