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The Statute Law Amendment (Taxation) Act, 1994

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

S.M. 1994, c. 23

The Statute Law Amendment (Taxation) Act, 1994

(Assented to July 5, 1994)

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(1)        Subsection 8(1) is amended

(a) in clause (d), by adding ", but not including its current accounts payable" after "fiscal year";

(b) in clause (e), by adding ", but not including its current accounts payable" after "subject as at the close of the fiscal year";

(c) by striking out "and" at the end of clause (d), by adding "and" at the end of clause (e) and by adding the following after clause (e):

(f) for fiscal years ending after April 20, 1994, all other indebtedness of the corporation as at the close of the fiscal year, whether secured or unsecured, but not including its current accounts payable.

2(2)        Subsections 8(2) and (3) are repealed and the following is substituted:

Current accounts payable

8(2)        For the purposes of clauses (1)(d), (e) and (f) and paragraph 9(1)(b)(ii)(B), current accounts payable of a corporation as at the close of the fiscal year include:

(a) its employee source deductions;

(b) its current income taxes payable;

(c) its wages and salaries payable;

(d) its cheques issued and outstanding in excess of funds on deposit;

(e) its dividends payable;

(f) its trade accounts payable reported as a current liability, but not including indebtedness to shareholders of the corporation, if

(i) the account is not outstanding for more than 90 days as at the close of the fiscal year, or

(ii) the account is not a portion or a current portion of a long term debt to another corporation; and

(g) its lien notes payable to another corporation, but not including indebtedness to shareholders of the corporation, as at the close of any fiscal year ending after June 30, 1981, if

(i) the corporation is engaged in the business of a retail automobile or truck dealership or a retail farm machinery and equipment dealership, and

(ii) the lien note represents financing by way of wholesale paper secured by specific charge on new or used motor vehicle inventory or on new or used farm machinery and equipment inventory.

3(1)        Subclause 9(1)(b)(ii) is repealed and the following is substituted:

(ii) for fiscal years ending

(A) before April 21, 1994, the amount of the indebtedness of the corporation relating to its permanent establishments in Canada as at the close of the fiscal year but excluding therefrom, as at the close of the fiscal year, any deferred income tax or other deferred tax or royalty as recorded in the books of the corporation, all amounts that are advanced or loaned to its permanent establishments in Canada by the corporation itself or by its shareholders directly or indirectly or by any other corporation, and all other indebtedness that is represented by bonds, bond mortgages, debentures, mortgages, lien notes, and any other securities to which the property of the corporation in Canada, or any of it, is subject, or

(B) after April 20, 1994, its current accounts payable relating to its permanent establishments in Canada as at the close of the fiscal year;

3(2)        Subsection 9(2) is amended by striking out "sub-clause (1)(b)(ii)" and substituting "paragraph (1)(b)(ii)(A)".

4(1)        Subsection 12(1) is amended

(a) by repealing the section heading and substituting "Exemption for years commencing before July 2, 1994"; and

(b) by adding "but commencing before July 2, 1994" after "June 30, 1982".

4(2)        The following is added after subsection 12(3):

Exemption for years commencing after July 1, 1994

12(4)       Where the amount taxable of a corporation as at the close of any fiscal year commencing after July 1, 1994 is less than $2,000,000., no tax is payable by the corporation for that fiscal year.

Non-application of subsection (4)

12(5)       Subsection (4) does not apply to two or more corporations that are associated, as defined in section 256 of the Income Tax Act (Canada), if the aggregate of the amounts taxable of all those associated corporations as at the close of their fiscal years ending in the same numeric year is $2,000,000. or more and, for the purpose of determining the aggregate of the amounts taxable of those associated corporations, any corporation that has no amount taxable at the close of the fiscal year is excluded from the calculation of the aggregate of the amounts taxable.

5(1)         Subsection 14(1) is amended

(a) by repealing the section heading and substituting "Notch provision for years commencing before July 2, 1994"; and

(b) by adding "but commencing before July 2, 1994" after "June 30, 1986".

5(2)        The following is added after subsection 14(3):

Notch provision for years commencing after July 1, 1994

14(4)       Where the amount taxable of a corporation as at the close of any fiscal year of the corporation commencing after July 1, 1994 does not exceed $2,003,000., the tax payable by the corporation before adding any interest or penalties that may be applicable, and before allowing a deduction under section 15, shall not be greater than the difference between the amount taxable of the corporation as at the close of the fiscal year and $2,000,000.

Non-application of subsection (4)

14(5)       Subsection (4) does not apply to two or more corporations that are associated, as defined in section 256 of the Income Tax Act (Canada), if the aggregate of the amounts taxable of all those associated corporations as at the close of their fiscal years ending in the same numeric year exceeds $2,003,000. and, for the purpose of determining the aggregate of the amounts taxable of those associated corporations, any corporation that has no amount taxable at the close of the fiscal year is excluded from the calculation of the aggregate of the amounts taxable.

6(1)        Subsection 17(4) is amended by striking out "Each" and substituting "Subject to subsection 17.1(1), each".

6(2)        Subsection 17(5) is amended by striking out "For" and substituting "Subject to subsection 17.1(2), for".

7           The following is added after section 17:

Instalments for first time

17.1(1)     Each corporation that has a permanent establishment within Manitoba shall, for each fiscal year ending after April 20, 1994 in respect of which the corporation's estimated tax payable exceeds $1,200., if the corporation was not required to make instalment payments for the immediately preceding fiscal year, without notice of demand, pay to the minister on account of the tax payable for the fiscal year instalment payments, on or before the 15th day of the 3rd, 6th, 9th and 12th months of the fiscal year, each in an amount equal to 25% of the corporation's estimated tax payable for the fiscal year.

Tax returns

17.1(2)     Each corporation that has a permanent establishment within Manitoba shall, for each fiscal year to which subsection (1) applies, on or before the last day of the 6th month immediately following the end of the fiscal year, file with the minister a return and pay to the minister the tax payable for the fiscal year less the amount of instalments paid under subsection (1).

PART 2

THE GASOLINE TAX ACT

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

8           The Gasoline Tax Act is amended by this Part.

9           The following is added after section 18:

Reciprocal agreement respecting tax

18.1(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 any jurisdiction inside or outside Canada for the purpose of facilitating the interjurisdictional administration and enforcement of the tax imposed under this Act or a similar Act of the other jurisdiction, making the application and collection of the tax more equitable or avoiding the double imposition of the tax in respect of any purchase.

Application of agreement to purchaser

18.1(2)     A purchaser who meets the terms and conditions of

(a) the application of an agreement under subsection (1); and

(b) every regulation made under clause 39(ff) in respect of the application of the agreement;

shall, notwithstanding any provision of this Act, be subject to the provisions of the agreement with respect to the matters described in subsection (1).

Payments under reciprocal agreements

18.2(1)     Where the minister has entered into an agreement under section 18.1, the minister may, notwithstanding any provision of this Act or any other Act or law, pay to another jurisdiction inside or outside Canada that part of the tax, and any interest and penalties, collected under this Act that is required to be paid under the agreement.

Payments out of Consolidated Fund

18.2(2)     Any payment made under subsection (1) shall be paid out of the Consolidated Fund and shall be charged to a special account in the books of the government as a reduction of the proceeds of the tax.

10          Section 39 is amended by adding the following after clause (ee):

(ff) respecting any matter that the Lieutenant Governor in Council considers necessary or advisable to carry out an agreement entered into under section 18.1, including

(i) the issuance, renewal, suspension, revocation and reinstatement of licences and decals,

(ii) terms and conditions subject to which licences and decals shall be issued,

(iii) the date on which licences and decals shall expire,

(iv) the fee to be paid for licences and decals,

(v) the manner in which and the time when refunds of tax shall be made, and

(vi) the form and content of applications, reports, returns and statements to be made or filed.

PART 3

THE INCOME TAX ACT

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

11          The Income Tax Act is amended by this Part.

12(1)       Subsection 4(12) is amended by striking out "For" and substituting "Subject to subsections (12.1), (12.2) and (13.4), for".

12(2)       Subsection 4(12.1) is amended by striking out "other than a dependent for whom the individual" and substituting "other than a dependent for whom any individual".

12(3)       Subsection 4(13) is amended in the part preceding clause (a) by striking out "subsection (13.1)" and substituting "subsections (13.1) to (13.5)".

12(4)       Subsection 4(13.2) is amended by striking out "other than a dependant for whom the individual" and substituting "other than a dependent for whom any individual".

12(5)       The following is added after subsection 4(13.3):

Limitation

4(13.4)     For the purposes of determining the amount that may be claimed by an individual in respect of a dependent in calculating, for any taxation year, the surtax that is payable by the individual under subsection (12) and the amount that may be deducted from tax otherwise payable by the individual under subsection (13), the following rules apply:

(a) for taxation years ending after December 16, 1993, where the individual or the individual's spouse may claim an amount in respect of a dependent for a taxation year, the spouse who is liable to pay the greater amount of tax for the taxation year calculated as 2% of net income under subsection (11) shall claim the amount in respect of the dependent; and

(b) for taxation years ending after 1993, where two or more individuals who are not spouses of each other may otherwise claim an amount in respect of the same dependent for a taxation year, only one of them may claim the amount and, if they cannot agree as to which should claim the amount, the individual who is liable to pay the greater amount of tax for the taxation year calculated as 2% of net income under subsection (11) shall claim the amount.

Limitation for non-residents

4(13.5)     For taxation years ending after 1993, where an individual who, having earned income in Manitoba but not being resident in Manitoba on the last day of the taxation year, is liable to pay tax pursuant to clause 3(1)(b), the amount that may be deducted under subsection (13) from tax otherwise payable by the individual is limited to the lesser of

(a) the product of the amount otherwise calculated under clause (13)(a) and the fraction that the individual's income earned in Manitoba is of his or her income for that year; and

(b) the tax otherwise payable by the individual under this Act.

13(1)       Subsection 5(5) is amended

(a) by striking out "There" and substituting "Subject to subsections (5.1) and (5.2), there";

(b) in clause (b), by repealing subclause (xi) and substituting the following:

(xi) for taxation years ending after 1993, by an individual with respect to whom any other taxpayer has, in determining the taxpayer's tax payable under the federal Act or the tax payable under this Act, claimed, in the return filed in accordance with the federal Act or this Act, an amount or credit of the type described in any of clauses 4(12)(b) to (g), subclauses 4(13)(a)(i) to (vi) or subclauses (ii) to (ix) of this clause, for any portion of the taxation year, or

(c) in clause (b), by adding "or" at the end of subclause (xii) and by adding the following after subclause (xii):

(xiii) for taxation years ending after December 16, 1993, by an individual who is under the age of 18 years on the last day of the taxation year, unless the individual is a principal taxpayer, the parent of a child, or married.

13(2)       Subsection 5(5.1) is amended by striking out "other than a dependant for whom the individual" and substituting "other than a dependent for whom any individual".

13(3)       The following is added after subsection 5(5.2):

Limitations

5(5.3)      For taxation years ending after 1993, the following rules apply:

(a) no amount may be deducted by an individual under clause (5)(b) in respect of a dependent described in subclause (5)(b)(xii);

(b) no amount may be deducted by an individual under clause (5)(b) in respect of a dependent to whom subsection (4.1) applies;

(c) where two or more individuals may deduct an amount under section 118 or subsection 118.3(2) of the federal Act in respect of the same dependent for a taxation year, subject to subsection (6), only the individual who claims a deduction in respect of the dependent under subsection 4(13) for the taxation year may claim a deduction in respect of the dependent under clause (5)(b).

14          Subsection 7(3) is repealed and the following substituted:

Small business deduction

7(3)        Subject to subsection (3.1), there may be deducted from the tax otherwise payable under this Act for a taxation year by a corporation that claims a small business deduction under section 125 of the federal Act for the taxation year an amount equal to

(a) for the 1988 to 1993 calendar years, 7%;

(b) for the 1994 calendar year, 7.5%; and

(c) for the 1995 and subsequent calendar years, 8%;

of the taxable income earned in Manitoba by the corporation in the taxation year in respect of which the small business deduction is allowed under the federal Act.

Application

7(3.1)       Where a corporation has a taxation year that commences in a particular calendar year and ends in the following calendar year, and the percentages specified in subsection (3) differ for those calendar years, the deduction allowed to the corporation under subsection (3) for the taxation year shall be calculated in accordance with the following formula:

D = (R1 x A/C x I) + (R2 x B/C x I)

In this formula:

D

is the deduction allowed to the corporation under subsection (3) for the taxation year;

R1

is the percentage specified in subsection (3) for the calendar year in which the corporation's taxation year commences;

R2

is the percentage specified in subsection (3) for the calendar year in which the corporation's taxation year ends;

A

is the number of days of the corporation's taxation year within the calendar year in which the corporation's taxation year commences;

B

is the number of days of the corporation's taxation year within the calendar year in which the corporation's taxation year ends;

C

is the total number of days in the corporation's taxation year; and

I

is the taxable income earned in Manitoba by the corporation in its taxation year in respect of which the small business deduction is allowed under section 125 of the federal Act.

15          Subsection 7.2(2) is amended

(a) in the English version of clauses (b) and (d) of the definition "investment tax credit", by striking out "following that year" and substituting "following the year"; and

(b) in the definition "qualified property"

(i) by striking out "1994" and substituting "1995", and

(ii) by striking out "in subsection 127(9)" and substituting "under subsections 127(9), (11) and (11.1)".

16(1)       Subsection 7.3(1) is amended

(a) in the definition "eligible expenditure", by striking out "subsection 127(9) of the federal Act, without reference to paragraph (b) thereof" and substituting "subsections 127(9) and (11.1) of the federal Act, without reference to paragraph (b) of the definition of that term in subsection 127(9) of that Act;" and

(b) in the English version of clauses (b) and (d) of the definition "research and development tax credit", by striking out "following that year" and substituting "following the year".

16(2)       The following is added after subsection 7.3(7):

Exception

7.3(8)      Notwithstanding the definition "eligible expenditure" in subsection (1), for the purposes of determining the research and development tax credit of a corporation, the amount of a contract payment paid or payable by a person to the corporation for an eligible expenditure made by the corporation shall be deemed to be nil if the person is not entitled to treat the contract payment as an eligible expenditure under this section, or if the person is a corporation that has renounced the research and development tax credit in respect of the contract payment under subsection (7).

PART 4

THE MINING TAX ACT

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

17          The Mining Tax Act is amended by this Part.

18          Subsection 1(1) is amended

(a) by repealing the definition "mineral" and substituting the following:

"mineral" means a mineral as defined in The Mines and Minerals Act but does not include a mineral for which a royalty is payable under that Act; (« minéral »)

(b) in the definition "new investment credit", by adding "or 1.1" after "Formula 1".

19          Subsections 3(2) and (4) are amended by adding "(3.1)," after "10(3),".

20(1)       Subsection 10(3) is repealed and the following is substituted:

Processing allowance for in-province processing

10(3)       Subject to subsections (3.1), (5) and (7), where the processing of any mineral or mineral product mined in Manitoba from a mineral processing establishment is done in Manitoba by the operator in a fiscal year, the director may approve for the fiscal year in respect of those mineral products

(a) an allowance for processing by way of return on capital employed by the operator that does not exceed the total of the amounts calculated in accordance with Formula 3 set out in the Schedule for each stage of the processing; and

(b) an additional allowance for processing by way of return on capital employed by the operator that does not exceed the total of the amounts calculated in accordance with Formula 7 set out in the Schedule for each stage of the processing.

20(2)       Clauses 10(3.1)(b) and (c) are amended by striking out "Formula 3 or 4" and substituting "Formula 3, 4 or 7".

20(3)       Subsection 10(4) is amended by striking out "subsection (3)" wherever it occurs and substituting "clause (3)(a)".

21          Clause 13(2)(b) is repealed and the following is substituted:

(b) where

(i) the new investment credit is calculated in accordance with Formula 1, 50% of the tax calculated under subsection (1), or

(ii) the new investment credit is calculated in accordance with Formula 1.1, or in accordance with Formula 1 and 1.1, 30% of the tax calculated under subsection (1).

22(1)       Subsection 13.1(2) is amended by striking out "1.5% of the profits of the operator for each fiscal year commencing after December 31, 1988" and substituting the following:

(a) 1.5% of the profits of the operator for each fiscal year commencing after December 31, 1988 and ending on or before April 20, 1994; and

(b) .5% of the profits of the operator for each fiscal year ending after April 20, 1994.

22(2)       Subsection 13.1(3) is amended by striking out "and" at the end of clause (a) and substituting "or".

23          Subsection 29(1) is amended by striking out "enforcement of this Act" and substituting "enforcement of this or any other Act of the Legislature imposing a tax or levy".

24          The Schedule is amended

(a) in Formula 1,

(i) by adding "(Subsection 13(2))" under "Formula 1", and

(ii) in item A, by adding "under this Formula" after "calculated";

(b) by adding Formula 1.1 set out in the Schedule to this Part after Formula 1;

(c) in Formula 3, by striking out "(Subsec. 10(3))" and substituting "(Clause 10(3)(a))";

(d) by repealing Formulas 5 and 6 in the Schedule and substituting Formulas 5 and 6 set out in the Schedule to this Part; and

(e) by adding Formula 7 set out in the Schedule to this Part after Formula 6.

SCHEDULE

FORMULA 1.1
(Subsection 13(2))

New investment credit = (.07 x I) - A

In this formula

I

is the total amount invested by the operator in depreciable assets after April 20, 1994 and before January 1, 2004

(i)in the construction and equipping of new mines,

(ii)in the construction and equipping of processing structures or facilities in Manitoba where that stage of processing was not previously performed on that site, and

(iii)in the major expansion or modernization of mining or processing structures or facilities in Manitoba that is undertaken for the purpose of increasing the potential production of the structures or facilities or diversifying the production of the structures or facilities and that is declared by the Lieutenant Governor in Council to be an approved expansion or modernization expenditure for the purposes of this Formula,

but does not include any amount expended for ordinary on-going maintenance or replacement of any structure or facility or for feasibility studies or other intangible assets where the project is not proceeded with as recommended in those studies; and

A

is the amount of new investment credit calculated under this Formula for the purposes of a previous fiscal year and deducted from the tax payable by the operator for any previous fiscal year.

FORMULA 5
(Section 4.1)

Tax holiday pool = H + A - D - P - N

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, including processing assets, of the new mine in the current fiscal year, in accordance with the Act;

D

is the proceeds of disposal for depreciable assets, including processing 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

N

is the new investment credit, relating to assets referred to in A, calculated in accordance with Formula 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 - N)/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, including processing assets, of the new mine in the current fiscal year, in accordance with the Act;

D

is the proceeds of disposal for depreciable assets, including processing 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);

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); and

N

is the new investment credit, relating to assets referred to in A, calculated in accordance with Formula 1.1.

FORMULA 7
(Clause 10(3)(b))

Additional allowance in fiscal year for processing minerals or mineral products in Manitoba = (M/N) x Q x .1

In this formula

M

is the quantity of the mineral bearing substances mined in Manitoba that were processed in each stage of processing by processing assets of the operator as referred to in Q in the fiscal year;

N

is the total quantity of mineral bearing substances from all sources that were processed in each stage of processing by processing assets of the operator as referred to in Q in the fiscal year; and

Q

is the original cost of the processing assets invested by the operator after April 20, 1994

(i)in the construction and equipping of new mines,

(ii)in the construction and equipping of processing structures or facilities in Manitoba where that stage of processing was not previously performed on that site, and

(iii)in the major expansion or modernization of processing structures or facilities in Manitoba that is undertaken for the purpose of increasing the potential production of the structures or facilities or diversifying the production of the structures or facilities and that is declared by the Lieutenant Governor in Council to be an approved expansion or modernization expenditure for the purposes of this Formula,

that are actually used in each of the stages of processing in the fiscal year in processing the output of the mine less all amounts, with respect to the purchase of processing assets, deducted by the operator under subsection 13(2)from the tax payable in any previous fiscal year.

PART 5

THE MOTIVE FUEL TAX ACT

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

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

26          Clause 2(28)(h) is repealed and the following is substituted:

(h) motive fuel under subsection (21)

(i) that is purchased after April 30, 1994 and before January 1, 1995, at the rate of 7.45¢ per litre, and

(ii) that is purchased after December 31, 1994, at the rate of 6.3¢ per litre.

27          The following is added after section 19:

Reciprocal agreement respecting tax

19.1(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 any jurisdiction inside or outside Canada for the purpose of facilitating the interjurisdictional administration and enforcement of the tax imposed under this Act or a similar Act of the other jurisdiction, making the application and collection of the tax more equitable or avoiding the double imposition of the tax in respect of any purchase.

Application of agreement to purchaser

19.1(2)     A purchaser who meets the terms and conditions of

(a) the application of an agreement under subsection (1); and

(b) every regulation made under clause 38(aa) in respect of the application of the agreement;

shall, notwithstanding any provision of this Act, be subject to the provisions of the agreement with respect to the matters described in subsection (1).

Payments under reciprocal agreements

19.2(1)     Where the minister has entered into an agreement under section 19.1, the minister may, notwithstanding any provision of this Act or any other Act or law, pay to an other jurisdiction inside or outside Canada that part of the tax, and any interest and penalties, collected under this Act that is required to be paid under the agreement.

Payments out of Consolidated Fund

19.2(2)      Any payment made under subsection (1) shall be paid out of the Consolidated Fund and shall be charged to a special account in the books of the government as a reduction of the proceeds of the tax.

28          Section 38 is amended by adding the following after clause (z):

(aa) respecting any matter that the Lieutenant Governor in Council considers necessary or advisable to carry out an agreement entered into under section 19.1, including

(i) the issuance, renewal, suspension, revocation and reinstatement of licences and decals,

(ii) terms and conditions subject to which licences and decals shall be issued,

(iii) the date on which licences and decals shall expire,

(iv) the fee to be paid for licences and decals,

(v) the manner in which and the time when refunds of tax shall be made, and

(vi) the form and content of applications, reports, returns and statements to be made or filed.

PART 6

THE RETAIL SALES TAX ACT

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

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

30(1)       Subsection 1(1.1) of the English version is amended by striking out "interpretated" and substituting "interpreted".

30(2)       Subsection 1(2) of the English version is amended by adding "clause" before "4(1)(e)".

31          Subsection 2(14) of the English version is amended by striking out "the May 1, 1972" and substituting "May 1, 1972".

32          The following is added after section 3:

Definitions

3.1(1)       In this section,

"first-time home buyer" means an individual who has purchased or built a new home in Manitoba, or two or more individuals who have jointly purchased or built a new home in Manitoba, if none of those individuals nor any spouse of those individuals has owned a home and ordinarily inhabited it as a principal residence at any time, before the new home is purchased or built, in the period that includes

(a) the part of the calendar year preceding the day when it is purchased or built, and

(b) the five calendar years immediately preceding that year; (« nouvel acheteur »)

"home" means a detached or semi-detached dwelling unit, a condominium unit, a townhouse unit or a permanently installed mobile home that is purchased by or built by or for the first-time home buyer and ordinarily inhabited by the first-time home buyer as his or her principal residence and, for the purpose of calculating the amount of a rebate under this section, does not include a basement or garage; (« maison »)

"new", in relation to a home, means a home that has not been inhabited by any person before the first-time home buyer; (« nouvelle maison »)

"spouse" means either of a man and woman

(a) who are married to each other,

(b) who, not being married to each other, have cohabited continuously for a period of not less than five years, or

(c) who, not being married to each other, have cohabited for a period of one year or more and there is a child of the union. (« conjoint »)

Interpretation

3.1(2)       For the purposes of this section,

(a) a first-time home buyer is considered to purchase the new home on

(i) the day when a contract to build, or an offer to purchase, is signed by both parties, or

(ii) if a sales invoice is the only document issued, the day when the sales invoice is issued; and

(b) a first-time home buyer is considered to commence to inhabit the new home only after it is substantially completed.

Rebate of tax paid by first-time home buyer

3.1(3)       Subject to subsections (5) and (6), where an application for rebate and any requested documentation is provided in accordance with subsection (4), the minister may rebate to a first-time home buyer all or part of the tax paid on building materials directly consumed in constructing the new home provided that the new home was

(a) purchased after April 20, 1994 and before April 1, 1995 and the first-time home buyer commenced to inhabit it within that period;

(b) purchased after April 20, 1994 and before April 1, 1995 and the first-time home buyer commenced to inhabit it after March 31, 1995 and before August 1, 1995; or

(c) built and the first-time home buyer commenced to inhabit it after April 20, 1994 and before August 1, 1995.

Application for rebate

3.1(4)       A first-time home buyer shall provide to the minister, after commencing to inhabit the new home

(a) and before January 1, 1996, an application for rebate in a form authorized by the minister; and

(b) any other documentation that may be requested by the minister in support of the application.

Amount of rebate

3.1(5)       The amount of the rebate may equal all or part of the tax paid on building materials directly consumed in constructing the new home and shall not exceed $2500. in respect of any one new home, and may be calculated and claimed by a first-time home buyer either

(a) by totalling the amounts of tax paid on materials for the new home, as evidenced by receipts issued to the first-time home buyer or as declared by the builder in a form authorized by the minister; or

(b) by multiplying the square footage of the new home by $1.65.

Limitation

3.1(6)       Where a first-time home buyer commences to inhabit the new home

(a) after March 31, 1995 and before August 1, 1995, the amount of the rebate under subsection (5) shall be reduced by an amount calculated in accordance with the following formula:

A x B x C

where

A

is the amount of the rebate under subsection (5),

B

is .82%, and

C

is the number of days after March 31, 1995 up to, but not including, the day when the new home is first inhabited; and

(b) after July 31, 1995, no rebate shall be allowed.

33          Subsection 26(3) is amended by striking out "and" at the end of clause (a), by adding "and" at the end of clause (b) and by adding the following after clause (b):

(c) all rebates authorized under section 3.1.

34(1)       Subsection 29(1) is amended by adding the following after clause (i):

(i.1) declaring, for the purposes of clause 3(1)(w), any tangible personal property to be a catalyst or direct agent;

34(2)       The following is added after subsection 29(7):

Regulations under clause (1)(i.1)

29(8)       A regulation made under clause (1)(i.1) is, if it so provides, effective with reference to a period before it was registered, if that period commences not earlier than June 1, 1994.

PART 7

THE REVENUE ACT

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

35          The Revenue Act is amended by this Part.

36          Subsection 3(7) of the English version is amended by striking out "pirce" and substituting "price".

37          Subsection 3(1) is amended by adding "and section 3.1" after "and (9)".

38          The following is added after section 3:

Definitions

3.1(1)      In this section,

"cost of capital", "cost of labour", "cost of manufacturing and processing capital" and "cost of manufacturing and processing labour" have the same meaning as provided in section 5202 of the Income Tax Regulations, as amended from time to time, made under the Income Tax Act (Canada), except that for the purposes of clause (a) of the definition "qualifying manufacturer"

(a) the costs shall be restricted to those incurred in respect of manufacturing carried on in Manitoba, and

(b) the fractions 100/85 and 100/75 referred to in the definitions "cost of manufacturing and processing capital" and "cost of manufacturing and processing labour" in section 5202 of the Income Tax Regulations shall, in each case, be read as 100/100; (« coût en immobilisations », « coût en main-d'oeuvre », « coût en immobilisations de fabrication et de transformation » et « coût en main-d'oeuvre de fabrication et de transformation »)

"manufacturing" includes the activity of extracting minerals from a mineral resource for processing but does not include

(a) activities related to construction, farming, fishing, logging, exploration, research and development, repair services or other non-manufacturing activities, or

(b) activities carried on by a publicly-funded institution; (« fabrication »)

"publicly-funded institution" means an organization, corporation or institution that receives more than 50% of its funding directly or indirectly from the government of Canada, the government of Manitoba or a municipality; (« établissement subventionné par l'État »)

"qualifying manufacturer" means a person who carries on the business of manufacturing and who, in respect of a period

(a) incurs an aggregate cost of manufacturing and processing capital and cost of manufacturing and processing labour in Manitoba in the period that is more than 50% of the person's aggregate cost of capital and cost of labour incurred in Manitoba in the period, and

(b) earns revenue in Manitoba from retail sales made directly to individuals for their consumption or use in the period that is less than 50% of the person's total revenue earned in Manitoba in the period. (« fabricant admissible »)

Interpretation re "qualifying manufacturer"

3.1(2)      In the definition "qualifying manufacturer", "period"

(a) with respect to cost of manufacturing and processing capital, and cost of capital, means as at the end of the immediately preceding fiscal year for the purposes of subsection (5) and as at the end of the immediately preceding billing period for the purposes of subsection (8); and

(b) with respect to cost of manufacturing and processing labour, cost of labour, and revenue, means throughout the immediately preceding fiscal year for the purposes of subsection (5) and as at the end of the immediately preceding billing period for the purposes of subsection (8).

Special rate for electricity used in mining and manufacturing

3.1(3)      Notwithstanding subsection 3(1), where an application for special rate under subsection (5) is approved by the minister, the tax on electricity purchased by a qualifying manufacturer from a dealer and used by the qualifying manufacturer in the operation of manufacturing machinery or equipment shall be calculated:

(a) in respect of electricity purchased after May 31, 1994 and before April 1, 1995, at the rate of 7% on 20% of the purchase price plus 3.5% on 80% of the purchase price; and

(b) in respect of electricity purchased after March 31, 1995, only at the rate of 7% on 20% of the purchase price.

Interpretation

3.1(4)      For the purposes of subsection (3), electricity is considered to be purchased by a qualifying manufacturer on the day when the dealer issues a bill for a billing period to the qualifying manufacturer in respect of the electricity, and the calculation of tax applies in respect of the electricity purchased and used by the qualifying manufacturer throughout the billing period.

Application for special rate

3.1(5)      A person who claims to be a qualifying manufacturer shall provide to the minister an application for special rate in a form authorized by the minister, including the name of the dealer, and any other information or documentation that the minister may request.

Application received on or before June 10, 1994

3.1(6)      An application under subsection (5) that is received by the minister on or before June 10, 1994 shall be deemed to be received by the minister on June 1, 1994.

Dealers to charge special rate

3.1(7)      Where an application for special rate is approved, the minister shall notify the dealer, and the dealer shall, for each billing period following the day when the application is received by the minister, charge tax calculated in accordance with subsection (3) on each bill issued to the qualifying manufacturer.

Loss of eligibility for special rate

3.1(8)      A person who ceases to be a qualifying manufacturer shall no longer be eligible to pay tax calculated in accordance with subsection (3) and shall immediately so notify the minister in writing.

PART 8

THE STATUTE LAW AMENDMENT (TAXATION) ACT, 1993

S.M. 1993, c. 46 amended

39          The Statute Law Amendment (Taxation) Act, 1993 is amended by this Part.

40          Subsection 100(1) is amended by striking out "July 31, 1994" and substituting "a day fixed by proclamation".

PART 9

THE TOBACCO TAX ACT

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

41          The Tobacco Tax Act is amended by this Part.

42          Section 1 is amended

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

"extraprovincial marked product" means tobacco or tobacco product that, for the tax purposes of a jurisdiction other than Manitoba, is endorsed or marked, whether on the tobacco or tobacco product or on the packaging or wrapping in which the tobacco or tobacco product is contained, to permit sale of the tobacco or tobacco product in the other jurisdiction; (« produit marqué extra-provincial »)

"vehicle" means a device in, on or by which a person or thing may be transported or drawn; (« véhicule »)

(b) by renumbering it as subsection 1(1) and by adding the following as subsection 1(2):

Interpretation

1(2)        For greater certainty, this Act shall be interpreted so as not to regulate any transaction that is not subject to the legislative authority of the Legislature of Manitoba.

43          Clause 6(a) is amended by adding "or An Act to Protect the Health of Non-Smokers" after "this Act".

44(1)       Subsection 9(3) is amended by striking out "900 grams" and substituting "400 grams".

44(2)       Subsection 9(3.1) is amended in the part preceding clause (a) by striking out "900 grams" and substituting "400 grams".

44(3)       Subsection 9(3.2) is repealed.

44(4)       Subsection 9(3.3) is amended

(a) in the heading, by striking out "Marked" and substituting "Extraprovincial marked"; and

(b) by adding "extraprovincial" before "marked" wherever it occurs.

44(5)       Subsection 9(3.4) is repealed and the following is substituted:

Extraprovincial marked product possession prohibited

9(3.4)      Subject to subsection (3.5), no person shall possess more than

(a) 200 cigarettes that are extraprovincial marked product; or

(b) 400 grams of tobacco or tobacco products, other than cigarettes or cigars, that are extraprovincial marked product.

44(6)       Subsection 9(3.5) is amended

(a) in the heading of the English version, by striking out "Marked" and substituting "Extraprovincial marked";

(b) by striking out "and the person is a collector under this Act"; and

(c) by adding "extraprovincial" before "marked" wherever it occurs.

44(7)       Subsection 9(5) is repealed and the following is substituted:

Stopping of vehicle

9(5)        Where a peace officer, or a person appointed as an officer under this Act by the minister, believes on reasonable and probable grounds that a vehicle contains a book, record, document, tobacco, tobacco product or other thing that affords evidence that an offence under this Act or the regulations is being or has been committed, the officer may signal or request the person driving or operating the vehicle to stop, and the person shall immediately bring the vehicle to a stop and shall not proceed until permitted to do so by the officer.

Seizure of goods or vehicle

9(5.1)      Where a peace officer, or a person appointed as an officer under this Act by the minister, believes on reasonable and probable grounds that

(a) an offence under this Act or the regulations is being or has been committed; and

(b) a book, record, document, tobacco, tobacco product or other thing that affords evidence of the offence is to be found in a vehicle in Manitoba;

and it is not practicable in the circumstances to obtain a warrant, the officer may, without warrant, enter and search the vehicle for the thing and may seize the thing or vehicle or both of them and bring it before a justice, or report on it to a justice, to be dealt with according to law.

44(8)        Subsection 9(6) is amended by adding ", other than extraprovincial marked product," after "seized under this Act".

44(9)       Subsection 9(7) is repealed and the following is substituted:

Disposition or sale of seized tobacco

9(7)        Subject to subsection (9.1), where tobacco or tobacco products have not been released in accordance with subsection (6) and a prosecution for an alleged contravention of subsection (2), (3) or (3.1) or a regulation made in respect of one of those subsections is pending, the minister may

(a) give directions for the tobacco or tobacco products to be sold and the proceeds held, with interest to be paid thereon at a rate fixed from time to time by the Lieutenant Governor in Council; or

(b) give other directions for the disposition of the tobacco or tobacco products.

44(10)      Subsection 9(8) is repealed.

44(11)      Subsection 9(9) is repealed and the following is substituted:

Disposition after prosecution

9(9)        Subject to subsection (9.1), where tobacco or tobacco products have been disposed of or sold under subsection (7) and a prosecution for an alleged contravention of subsection (2), (3) or (3.1) or a regulation made in respect of one of those subsections has been finally resolved,

(a) if the accused has been convicted, in the case of a sale, the proceeds from the sale and the accumulated interest are forfeited to the Crown; or

(b) if the accused has been acquitted

(i) in the case of a sale, the proceeds from the sale and the accumulated interest shall be paid to the person entitled, and

(ii) in the case of any other disposition, an amount of money equal to the value of the tobacco or tobacco products immediately before they were seized shall be paid to the person entitled.

44(12)      The following is added after subsection 9(9):

Forfeiture of extraprovincial marked product

9(9.1)      Extraprovincial marked product seized under this Act is forfeited to the Crown without entitlement to compensation.

45          Subsection 20(2) is repealed and the following is substituted:

Warrant to enter and seize

20(2)       A justice who is satisfied by information upon oath that there are reasonable and probable grounds to believe that

(a) an offence under this Act or the regulations is being or has been committed; and

(b) a book, record, document, tobacco, tobacco product or other thing that affords evidence of the offence is to be found in a building, receptacle, vehicle or other place in Manitoba;

may at any time issue a warrant authorizing a peace officer, or a person appointed as an officer under this Act by the minister, and such other persons as may be named in the warrant, to enter and search the building, receptacle, vehicle or other place for the thing and to seize the thing or receptacle or vehicle or any or all of them and bring it before a justice, or report on it to a justice, to be dealt with according to law.

46          Subsection 25(1) of the French version is amended by striking out "ou d'cotisation" and substituting "ou de cotisation".

47(1)       Subsection 26(1) is amended by striking out "Her Majesty in right of Manitoba" and substituting "the minister".

47(2)       Subsection 26(2) is amended by repealing the part preceding clause (a) and substituting the following:

Penalties: various offences

26(2)       Every person who contravenes subsection 9(2), (3.1), (3.3) or (3.4) or a regulation made under clause 28(o) is guilty of an offence and is liable

47(3)       Subsections 26(2.1) to (2.4) are repealed and the following is substituted:

Additional penalty

26(2.1)     Subject to subsection (2.2), where a person is convicted of an offence in respect of subsection 9(2), (3.1), (3.3) or (3.4) or a regulation made under clause 28(o), the justice shall, in addition to imposing a penalty under subsection (2), order the person to pay to the minister an amount equal to three times the tax otherwise payable under section 2 in respect of the tobacco or tobacco product.

Alternative penalty if Excise Act conviction

26(2.2)     Where a person is, with respect to the same tobacco or tobacco product, convicted of

(a) an offence in respect of

(i) subsection 9(2), (3.1), (3.3) or (3.4) of this Act, or

(ii) a regulation made under clause 28(o) of this Act; and

(b) an offence under the Excise Act (Canada);

the justice may order the person to pay to the minister, on account of the offence under this Act, an amount equal to not less than one and not more than three times the tax otherwise payable under section 2 in respect of the tobacco or tobacco product, provided that the combination of the penalties for the offences referred to in clauses (a) and (b) is not less than three times the tax otherwise payable under section 2.

Application of subsections (2.1) and (2.2)

26(2.3)     For greater certainty, the penalty payable under subsection (2.1) or (2.2) applies whether or not the tobacco or tobacco product is extraprovincial marked product.

48           Clause 28(o) is repealed and the following is substituted:

(o) establishing a system for affixing stamps, or imprinting markings, on tobacco or tobacco products or on the packages in which they are sold, before or at the time of delivery to a purchaser, for the purposes of proving that tax under this Act has been accounted for and, in relation to the system, prohibiting the stamping, marking, possession, purchase or sale of tobacco or tobacco products except in accordance with the system;

PART 10

COMING INTO FORCE

Coming into force

49          Subject to sections 50 to 57, this Act comes into force on the day it receives royal assent.

Part 1:  Corporation Capital Tax Act

50(1)       Sections 2, 3, 6 and 7 are retroactive and deemed to have come into force on April 20, 1994.

Corporation Capital Tax Act:  sections 4 and 5

50(2)       Sections 4 and 5 are retroactive and deemed to have come into force on July 1, 1994.

Part 2:  Gasoline Tax Act

51          Sections 9 and 10 come into force on June 30, 1994 and, if this Act receives royal assent after that date, sections 9 and 10 are retroactive and deemed to have come into force on June 30, 1994.

Part 3: Income Tax Act

52(1)       Subsections 12(2) to (4), clause 13(1)(b) and subsections 13(2) and (3) are retroactive and deemed to have come into force with respect to taxation years ending after 1993.

Income Tax Act: subsection 12(5)

52(2)       Subsection 12(5) is retroactive and deemed to have come into force with respect to taxation years ending after December 16, 1993 except that clause 4(13.4)(b) and subsection 4(13.5) as enacted by subsection 12(5) are deemed to come into force with respect to taxation years ending after 1993.

Income Tax Act: Clause 13(1)(c)

52(3)       Clause 13(1)(c) is retroactive and deemed to have come into force with respect to taxation years ending after December 16, 1993.

Income Tax Act: section 14

52(4)       Section 14 is retroactive and deemed to have come into force on January 1, 1994.

Income Tax Act:  subclause 15(b)(i)

52(5)       Subclause 15(b)(i) is retroactive and deemed to have come into force on April 20, 1994.

Income Tax Act:  subclause 15(b)(ii), clause 16(1)(a) and subsection 16(2)

52(6)       Subclause 15(b)(ii), clause 16(1)(a) and subsection 16(2) are retroactive and deemed to have come into force on June 17, 1994.

Part 4:  Mining Tax Act

53(1)       Clause 18(b), sections 20 and 21, subsection 22(1) and section 24 are retroactive and deemed to have come into force on April 21, 1994.

Mining Tax Act: clause 18(a)

53(2)       Clause 18(a) comes into force on a day fixed by proclamation.

Part 5:  Motive Fuel Tax Act

54(1)       Section 26 is retroactive and deemed to have come into force on May 1, 1994.

Motive Fuel Tax Act: sections 27 and 28

54(2)       Sections 27 and 28 come into force on June 30, 1994 and, if this Act receives royal assent after that date, sections 27 and 28 are retroactive and deemed to have come into force on June 30, 1994.

Part 6:  Retail Sales Tax Act

55(1)       Sections 32 and 33 are retroactive and deemed to have come into force on April 21, 1994.

Retail Sales Tax Act: section 34

55(2)       Section 34 comes into force on June 1, 1994 and, if this Act receives royal assent after that date, section 34 is retroactive and deemed to have come into force on June 1, 1994.

Part 7:  Revenue Act

56          Section 38 is retroactive and deemed to have come into force on June 1, 1994.

Part 8:  Statute Law Amendment (Taxation) Act, 1993

57          Section 40 comes into force on July 30, 1994 and if this Act receives royal assent after July 30, 1994, section 40 is retroactive and deemed to have come into force on July 30, 1994.