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S.M. 1997, c. 49
THE STATUTE LAW AMENDMENT (TAXATION) ACT, 1997
(Assented to June 28, 1997)
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
THE CORPORATION CAPITAL TAX ACT
The Corporation Capital Tax Act is amended by this Part.
The following is added after section 11.1:
Fee for issuing confirmation of tax filing or payment status
The director may charge a fee in the amount of $50. for providing a certificate or other confirmation of a corporation's tax filing or payment status under this Act.
Subsection 12(4) is amended
(a) in the section heading, by adding "and ending before January 2, 1998" after" 1994"; and
b) in the subsection, by adding "but ending before January 2, 1998" after "1994".
The following is added after subsection 12(5):
Exemption for years ending after January 1, 1998
Where the amount taxable of a corporation as at the close of any fiscal year ending after January 1, 1998 is less than $3,000,000., no tax is payable by the corporation for that fiscal year.
Non-application of subsection (6)
Subsection (6) 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 $3,000,000. 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.
Subsection 14(4) is amended
(a) in the section heading, by adding " and ending before January 2, 1998" after "1994"; and
(b) in the subsection, by adding "but ending before January 2, 1998" after "1994".
The following is added after subsection 14(5):
Notch provision for years ending after January 1, 1998
Where the amount taxable of a corporation as at the close of any fiscal year of the corporation ending after January 1, 1998 does not exceed $3,009,000., 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 $3,000,000.
Non-application of subsection (6)
Subsection (6) 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 $3,009,000. 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.
Subsection 17(4) is amended
(a) by repealing the section heading and substituting "Instalments, fiscal years commencing between July 1, 1991 and January 2, 1998"; and
(b) in the subsection, by striking out " after July 1, 1991" and substituting "between July 1, 1991 and January 2, 1998".
The following is added after subsection 17(4.1):
Instalments, fiscal years commencing after January 1, 1998
Subject to subsection 17.1(1.1), each corporation that has a permanent establishment within Manitoba shall, for fiscal years commencing after January 1, 1998,
(a) if the corporation's tax payable for its immediately preceding fiscal year exceeded $2,400., without notice or demand, pay to the minister on account of the tax payable for the current fiscal year instalment payments, on or before the 15th day of the 3rd, 6th, 9th and 12th months following the month in which the corporation's immediately preceding fiscal year ended, each in an amount equal to the lesser of
(i) 25% of the total tax payable by the corporation for the corporation's immediately preceding fiscal year, and
(ii) 25% of the corporation's estimated tax payable for the current fiscal year;
(b) if the corporation's tax payable for its immediately preceding fiscal year was $2,400. or less, without notice or demand, pay to the minister, on or before the last day of the third month immediately following the end of the fiscal year, an instalment of tax payable for that fiscal year equal to the amount of the tax payable by the corporation for the corporation's immediately preceding fiscal year.
Subsection 17(5) is amended by adding "or (4.2), as the case may be" after "subsection (4)".
Subsection 17.1(1) is amended
(a) by adding "and commencing before January 2, 1998" after "April 20, 1994"; and
(b) in the English version, by striking out "notice of demand" and substituting "notice or demand".
The following is added after subsection 17.1(1):
Instalments for first time, years commencing after January 1, 1998
Each corporation that has a permanent establishment within Manitoba shall, for each fiscal year commencing after January 1, 1998, in respect of which the corporation's estimated tax payable exceeds $2,400., if the corporation was not required to make instalment payments for the immediately preceding fiscal year, without notice or 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.
Subsection 17.1(2) is amended
(a) by adding "or (1.1)" after "subsection (1)" where it occurs for the first time; and
(b) by adding "or (1.1), as the case may be" after "subsection (1)" where it occurs for the second time.
Subsection 19(3) is amended by striking out "sub-clause 17(4)(a)(ii)" and substituting "subclause 17(4)(a)(ii) or 17(4.2)(a)(ii)".
Subsection 22(2.1) is amended by adding "or 17(4.2)(a)" after "clause 17(4)(a)".
THE GASOLINE TAX ACT
Clause 2(23)(b) of The Gasoline Tax Act is amended by striking out " 4.2¢" and substituting
" 3.2¢".
THE HEALTH AND POST SECONDARY EDUCATION TAX LEVY ACT
The Health and Post Secondary Education Tax Levy Act is amended by this Part.
Subsection 3(3.8) is amended by adding "and before 1998" after "1993".
Subsection 3(3.9) is amended by adding "and before 1998" after "1993".
Subsection 3(3.10) is amended
(a) in the part preceding clause (a), by striking out "1996" and substituting "1997";
(b) by striking out "(3.8)" wherever it occurs and substituting "(3.12)";
(c) by striking out "$750,000." wherever it occurs and substituting "$1,000,000."; and
(d) by striking out "(3.9)" wherever it occurs and substituting "(3.13)".
The following is added after subsection 3(3.11):
Where the total remuneration paid by an employer to employees is $1,000,000. or less in a year after 1997, no tax is payable by the employer under subsection (3.1) for the year.
Where the total remuneration paid by an employer to employees in a year after 1997 is more than $1,000,000. and not more than $2,000,000., the tax payable by the employer under subsection (3.1) for the year, before adding any interest or penalties otherwise applicable, is 4.5% of the amount of remuneration paid in the year that is more than $1,000,000. but not more than $2,000,000.
Subsection 5(2.4) is amended by adding "and before 1998" after "1993".
The following is added after subsection 5(2.4):
Annual declaration of salaries after 1997
Where an employer has a permanent establishment in the province and pays in a year after 1997 remuneration of $1,000,000. or less to all of its employees, the minister may require the employer to file, on or before March 31 of the immediately following year, a declaration of the amount of the remuneration paid for the year.
The following is added after section 26.2:
Fee for issuing confirmation of tax filing or payment status
The director may charge a fee in the amount of $50. for providing a certificate or other confirmation of an employer's tax filing or payment status under this Act.
THE INCOME TAX ACT
The Income Tax Act is amended by this Part.
The definition "treasurer" in subsection 1(1) is amended by striking out "and" after clause (a) and by repealing clause (b) and substituting the following:
(b) in relation to the remission, under section 36.1 of an amount as or on account of tax, interest or penalty paid under this Act, the minister; and
(c) in relation to the administration and enforcement of this Act other than sections 61 to 65, the minister.
Subsection 1(1) is amended by adding the following definition in alphabetical order:
"prescribed" means prescribed under this Act except where used in reference to something prescribed under the federal Act, in which case it has the same meaning as "prescribed" in the federal Act;
Subsection 1(1.1) is amended
(a) by adding ""filing-due date"," after ""employer","; and
(b) by striking out ""prescribed"".
Subsection 5(3) is amended by striking out "subsection (2)" and substituting "subsections (2) and (8.1)".
The following is added after subsection 5(7):
Learning tax credit after 1996
For the purposes of clause (5)(c),
(a) for taxation years after 1996, an individual's tuition fees may include "ancillary fees" as defined for the purposes of section 118.5 of the federal Act; and
(b) "$100." in paragraph (5)(c)(i)(B), shall be read as "$150." for the 1997 taxation year and "$200." for taxation years after 1997.
The definition "qualified property" in subsection 7.2(2) is amended in the part preceding clause (a) by striking out "
July 1, 1997" and substituting "July 1, 2000".Subsection 7.3(7) is repealed and the following is substituted:
A corporation may renounce the research and development tax credit in whole or in part on or before the day that is 12 months after the corporation's filing-due date and, where the corporation so renounces entitlement to that credit, the corporation is deemed for all purposes never to have received, have been entitled to receive or have had reasonable expectation of receiving, that credit or that part of the credit.
The following is added after section 7.4:
FILM AND VIDEO PRODUCTION TAX CREDIT
Definitions, sections 7.5 to 7.12
In this section and sections 7.6 to 7.12,
"affiliate", where used to indicate the relationship between corporations, means any corporation where
(a) one of the corporations controls, directly or indirectly in any manner whatever, the other,
(b) each corporation is controlled, directly or indirectly in any manner whatever, by the same person or group of persons,
(c) each corporation is controlled, directly or indirectly in any manner whatever, by a person and the person who so controls one of the corporations is related to the person who so controls the other, and either of these persons owns, in respect of each corporation, not less than 25% of the issued shares of any class, other than a specified class as defined in subsection 256(1.1) of the federal Act, of the capital stock thereof,
(d) one of the corporations is controlled, directly or indirectly in any manner whatever, by a person and that person is related to each member of a group of persons that so controls the other corporation, and that person owns, in respect of the other corporation, not less than 25% of the issued shares of any class, other than a specified class as defined in subsection 256(1.1) of the federal Act, of the capital stock thereof, or
(e) each of the corporations is controlled, directly or indirectly in any manner whatever, by a related group and each of the members of one of the related groups is related to all of the members of the other related group, and one or more persons who are members of both related groups, either alone or together, own in respect of each corporation, not less than 25% of the issued shares of any class, other than a specified class as defined in subsection 256(1.1) of the federal Act, of the capital stock thereof; (« liée » ou « lien »)
"corporation" means a person incorporated under the laws of Canada or of a province of Canada that is a taxable Canadian corporation primarily carrying on a business that is a film or video production business, but does not include a corporation that holds a broadcasting licence issued by the Canadian Radio-Television and Telecommunications Commission or a corporation that does not deal at arm's length with a corporation that holds such a licence; (« corporation »)
"eligible employee" means an employee who was resident in Manitoba on December 31 of the taxation year; (« employé admissible »)
"eligible film" means a film or video that is registered as an eligible film under section 7.9; (« film admissible »)
"eligible individual" means an individual (other than a trust or estate) who was resident in Manitoba on December 31 of the taxation year; (« particulier admissible »)
"eligible salaries" of a corporation for a taxation year in respect of an eligible film means the total of the following amounts to the extent that they are reasonable in the circumstances and included in the cost or, in the case of depreciable property, the capital cost to the corporation of the property:
(a) the salary or wages of eligible individuals directly attributable to the production that are incurred after 1996 and in the year, or the preceding taxation year, by the corporation for the stages of production of the property, from the final script stage to the end of the post-production stage, and paid by the corporation in the year or within 60 days after the end of the year, other than amounts incurred in that preceding year that were paid within 60 days after the end of that preceding year,
(b) that portion of the remuneration, other than salary or wages and other than remuneration that relates to services rendered in the preceding taxation year and that was paid within 60 days after the end of that preceding year, that is directly attributable to the production of the property, that relates to services rendered after 1996 and in the year or the preceding taxation year to the corporation for the stages of production, from the end of the final script stage to the end of the post-production stage, and that is paid by the corporation in the year or within 60 days after the end of the year to
(i) an eligible individual who is not an employee of the corporation, to the extent that the amount paid
(A) is attributable to services personally rendered by the individual for the production of the property, or
(B) is attributable to and does not exceed the salary or wages of the individual's eligible employees for personally rendering services for the production of the property,
(ii) another corporation, to the extent that the amount paid is attributable to and does not exceed the salary or wages of the other corporation's eligible employees for personally rendering services for the production of the property,
(iii) another corporation, all of the issued and outstanding shares of the capital stock of which, except directors' qualifying shares, belong to an eligible individual and the activities of which consist principally of the provision of the individual's services, to the extent that the amount paid is attributable to services rendered personally by the individual for the production of the property, or
(iv) a partnership that is carrying on a business in Canada, to the extent that the amount paid
(A) is attributable to services personally rendered by an eligible individual who is a member of the partnership for the production of the property, or
(B) is attributable to and does not exceed the salary or wages of the partnership's eligible employees for personally rendering services for the production of the property, and
(c) where
(i) the corporation is a subsidiary wholly-owned corporation of another corporation, in this clause referred to as the "parent", and
(ii) the corporation and the parent have agreed that this clause apply in respect of the production,
the reimbursement made by the corporation in the year, or within 60 days after the end of the year, of an expenditure that was incurred by the parent in a particular taxation year of the parent in respect of that production and that would be included in the eligible salaries of the corporation in respect of the property for the particular taxation year under clause (a) or (b) if
(iii) the corporation had such a particular taxation year, and
(iv) the expenditures were incurred by the corporation for the same purpose as they were by the parent and were paid at the same time and to the same person or partnership as it was by the parent; (« traitements admissibles »)
"government assistance" means the amount of assistance which the corporation receives or is entitled to receive from a government, municipality or other public authority whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or any other form of assistance, other than the film and video production tax credit under the Act or under the federal Act in respect of total production costs; (« aide gouvernementale »)
"minister" means the Minister of Finance or a person designated by the Minister of Finance to perform certain duties assigned to the Minister of Finance pursuant to the Act or regulations; (« ministre »)
"tax credit" means the tax credit established in section 7.6; (« crédit d'impôt »)
"total production costs" means all outlays or expenses made or incurred by the corporation, including all outlays, leases or replacements of capital, for the purposes of producing a film, less the value of government assistance. (« coût total de production »)
Where corporation deemed controlled
For the purposes of this section, a corporation is deemed to be controlled by a person or group of persons if
(a) shares of the corporation carrying more than 50% of the outstanding voting rights for the election of the directors are owned, directly or indirectly, by that person or group of persons; and
(b) the voting rights carried by the shares as referred to in clause (a) are sufficient, if exercised, to elect at least 50% of the directors of the corporation.
Further requirements re eligible salaries
For the purpose of the definition "eligible salaries" in subsection (1),
(a) remuneration does not include remuneration determined by reference to profits or revenues;
(b) salary or wages do not include an amount determined by reference to profits or revenues;
(c) where the value of remuneration, salary or wages may include an amount determined by reference to profits or revenues, the minister may deem a value for that portion of the eligible salaries; and
(d) services referred to in clause (b) of the definition "eligible salaries" in subsection (1) that relate to the post-production stage of the production include only the services that are rendered at that stage by a person who performs the duties of animation cameraman, assistant colourist, assistant editor, assistant mixer, assistant sound-effects technician, boom operator, colourist, computer graphics designer, developing technician, director of post-production, dubbing technician, encoding technician, inspection technician – clean-up, mixer, music supervisor, optical effects technician, picture editor, printing technician, projectionist, recording technician, senior editor, sound editor, sound-effects technician, special effects editor, subtitle technician, timer, videographer or videotaping technician, or other similar duties.
Calculation of production costs for related corporations
Where a corporation meets the criteria in section 7.7 except for clause (c), and the corporation is controlled by two or more corporations that are not affiliates and at least one of those corporations meets the criteria in section 7.7, the minister may deem total production costs to be equal to total production costs less the investment of any corporation that does not meet the criteria in section 7.7.
If two or more of the controlling corporations referred to in subsection (4) meet the criteria in section 7.7, the deemed value of total production costs calculated in subsection (4) and the total amount of the eligible salaries shall be prorated among those corporations according to their share of the investment in the eligible film.
Manitoba film and video production tax credit
A corporation that produces an eligible film in Manitoba and meets the criteria set out in section 7.7 may deduct from tax otherwise payable under this Act for a taxation year an amount equal to the lesser of
(a) 35% of eligible salaries paid after December 31, 1996 and before March 1, 2000 to residents of Manitoba; and
(b) 22.5% of the total production costs of the eligible film incurred after December 31, 1996 and before March 1, 2000.
Eligibility requirements for corporations
To be eligible to apply for a tax credit, a corporation must meet the following criteria:
(a) the corporation must have a permanent establishment in Manitoba;
(b) at least 25% of salaries and wages must be paid in Manitoba to eligible employees;
(c) the corporation must have assets of less than $50,000,000. including assets of its affiliated corporations;
(d) the corporation must be producing an eligible film as determined under section 7.9.
A corporation shall apply for a tax credit in any manner that the minister may require, and shall provide the following information:
(a) its financial statements for the preceding taxation year and the financial statements of a corporation referred to in subsection 7.5(4) or (5);
(b) a statement detailing the total production costs for the eligible film;
(c) a list of eligible employees, including the employees' names, social insurance numbers, eligible salaries, occupations and addresses;
(d) a statement in a form satisfactory to the minister and signed by an authorized officer of the corporation that the information contained in the application is true and correct;
(e) any other information that the minister may require.
The minister may register a production as an eligible film if
(a) an application in accordance with section 7.8 is received within 30 months after the end of the taxation year in which principal photography commences;
(b) the proposal is intended for a television, cinema, video tape, digital, cd-rom, multimedia or nontheatrical production and the subject of the proposal is drama, variety, animation, children's programming, music programming, an informational series or a documentary; and
(c) the proposal meets any other criteria that may be prescribed in the regulations.
The following are not eligible films:
(a) news, current events or public affairs programming, or programs that include weather or market reports;
(b) talk shows;
(c) productions in respect of games, questionnaires or contests (other than a production directed primarily at minors);
(d) sports events or activities;
(e) gala presentations or awards shows;
(f) productions that solicit funds;
(g) reality television;
(h) pornography;
(i) advertising;
(j) productions produced primarily for industrial, corporate or institutional purposes;
(k) productions, other than documentaries, all or substantially all of which consist of stock footage;
(l) productions for which public financial support would, in the opinion of the minister, be contrary to public policy.
A corporation shall apply in any manner that the minister may require for registration of an eligible film, and shall provide the following information:
(a) the estimated total production costs;
(b) the estimated value of the tax credit;
(c) a financing plan;
(d) a script;
(e) any other information the minister may require.
The amount by which the tax credit exceeds the corporation's tax payable for the taxation year calculated without reference to this section may be applied by the treasurer to pay
(a) any tax, interest or penalty owing by the corporation for that or any prior taxation year pursuant to this Act, the corporation income tax of any agreeing province or the federal Act;
(b) any contribution, interest or penalty owing by the corporation for that or any prior taxation year as a result of payments required from the corporation pursuant to the Canada Pension Plan; and
(c) any premium, interest or penalty owing by the corporation for that or any prior taxation year pursuant to the Employment Insurance Act (Canada);
and any part of the amount not so applied shall be paid to the corporation.
The Lieutenant Governor in Council may make regulations
(a) defining any term used in sections 7.5 to 7.12 but not defined in this Act;
(b) respecting any further criteria of eligible films;
(c) respecting any further information that must be provided by a corporation applying for a tax credit;
(d) respecting the information and records that must be supplied or maintained by a corporation for the purposes of sections 7.5 to 7.12;
(e) respecting any other matter that the Lieutenant Governor in Council considers necessary to carry out effectively the intent and purpose of sections 7.5 to 7.12.
Subsection 11.1(1) is amended
(a) in the part preceding the definition "annual approved share limit", by adding "and sections 11.2 to 11.5" after "section";
(b) by repealing the definition "annual approved share limit";
(c) by repealing the definition "approved share" and substituting the following:
"approved share" means a Class A share of the capital stock of a corporation the original acquisition of which occurred while the corporation was a corporation referred to in clause (a) or subclause (b)(i) of the definition "labour-sponsored venture capital corporation"; (« action approuvée »)
(d) by repealing the definition "labour-sponsored funds tax credit" and substituting the following:
"labour-sponsored funds tax credit" of an individual (other than a trust) in respect of the original acquisition after 1996 of an approved share (other than a share in respect of which an amount was deducted under this section in computing the individual's income for the 1996 taxation year) by the individual or by a qualifying trust for the individual in respect of the share means 15% of the lesser of
(a) the net cost of the share to the individual or the trust, as the case may be, and
(b) the amount designated in respect of the share in the receipt filed by the individual under subsection (3); (« crédit d'impôt relatif à un fonds de travailleurs »)
(e) by adding the following definitions in alphabetical order:
"approved share limit", in relation to a selling period of a labour-sponsored venture capital corporation, means the lesser of
(a) the total of the amounts designated by it under subsection (4) in respect of approved shares the original acquisition of which occurred in the period, and
(b) $15,000,000 or any greater amount prescribed by regulation under this Act; (« plafond »)
"Class A share" means
(a) a Class "A" Common Share of the capital stock of Crocus, and
(b) a Class A share of the capital stock of a corporation referred to in clause (b) of the definition "labour-sponsored venture capital corporation"; (« action de catégorie A »)
"Crocus" means the Crocus Investment Fund established under The Manitoba Employee Ownership Fund Corporation Act; (« Crocus »)
"eligible investment" means,
(a) in relation to Crocus, an investment that, at the time it was acquired by Crocus, was an eligible investment for the purpose of subsection 11(2) of The Manitoba Employee Ownership Fund Corporation Act, and
(b) in relation to any other labour-sponsored venture capital corporation, an eligible investment as defined in The Labour-sponsored Venture Capital Corporations Act; (« placement admissible »)
"labour-sponsored venture capital corporation" means
(a) Crocus, and
(b) a corporation
(i) registered under The Labour-sponsored Venture Capital Corporations Act, whose registration under that Act is not suspended, or
(ii) whose registration under that Act is suspended or has been revoked; (« corporation à capital de risque de travailleurs »)
"monthly deficiency", in relation to a labour-sponsored venture capital corporation in respect of a month, means
(a) the amount, if any, by which 60% of the lesser of
(i) the shareholders' equity in respect of the Class A shares of the corporation's capital stock at the end of the taxation year in which that month ends, and
(ii) the shareholders' equity in respect of the Class A shares of the corporation's capital stock at the end of the immediately preceding taxation year,
exceeds the greater of
(iii) the lowest amount that is the total cost to the corporation of its eligible investments at any time in the month, and
(iv) 50% of the total of
(A) the total cost to the corporation of its eligible investments at the beginning of its taxation year in which that month ends, and
(B) the total cost to the corporation of its eligible investments at the end of that year, or
(b) such greater amount as is determined in prescribed manner; (« insuffisance mensuelle »)
"original acquisition" of a share means the acquisition of the share by the first registered holder of the share where that holder is the first person to acquire the share or to irrevocably subscribe and pay for the share; (« aquisition initiale »)
"selling period" means a period beginning on the 61st day of a calendar year and ending on the 60th day of the following calendar year; (« période de vente »)
"shareholders' equity" at any time in respect of the Class A shares of the capital stock of a labour-sponsored venture capital corporation means the amount by which
(a) the total consideration paid for shares of that class that were issued or irrevocably subscribed and paid for before that time,
exceeds
(b) the total of all amounts paid by the corporation before that time to its shareholders as a return of capital on those shares; (« avoir des actionnaires »)
The following is added after subsection 11.1(1):
For the purposes of this section and sections 11.2 to 11.5,
(a) a broker or dealer in securities who in that capacity acquires, subscribes for or becomes a registered holder of a share is deemed not to have acquired, subscribed for or become a registered holder of the share; and
(b) where the person who became the first registered holder of a Class A share irrevocably subscribed and paid for the share before it was first acquired by the person, the original acquisition of the share is deemed to have occurred when the share was irrevocably subscribed and paid for by the person.
Clause 11.1(2)(d) is repealed.
The following is added after subsection 11.1(2):
Labour-sponsored funds tax credit
Subject to subsections (3) and (4.1), there may be deducted from the tax otherwise payable under this Act by an individual (other than a trust) for a taxation year after 1996 such amount as the individual claims not exceeding the lesser of $525. and the amount determined by the following formula:
A - B
In this formula,
A is the total of all amounts each of which is the individual's labour-sponsored funds tax credit in respect of the original acquisition of an approved share in the year or in the first 60 days of the following taxation year;
B is the portion of the amount determined for A that was deducted under this subsection or subsection (2) for the preceding taxation year.
Subsection 11.1(4.1) is repealed and the following is substituted:
Subject to subsection (4.2), no amount may be deducted under subsection (2) or (2.1) from an individual's tax otherwise payable under this Act for a taxation year where
(a) a Class A share of the capital stock of a labour-sponsored venture capital corporation is redeemed, acquired or cancelled by the corporation after 1996 and in the taxation year or in either of the two preceding taxation years; and
(b) the original acquisition of the share was by the individual or by a qualifying trust for the individual in respect of the share.
Exceptions to cooling-off period
Subsection (4.1) does not apply to an individual for a taxation year as a consequence of a redemption, acquisition or cancellation of a share where
(a) the individual dies in the year and before the redemption, acquisition or cancellation;
(b) the individual's labour-sponsored funds tax credit in respect of the original acquisition is nil;
(c) tax becomes payable under section 11.5 because of the redemption, acquisition or cancellation; or
(d) the individual becomes either disabled and permanently unfit for work or terminally ill in the year
(i) after the last original acquisition in the year of an approved share by the individual or a qualifying trust for the individual in respect of the share, and
(ii) before the redemption, acquisition or cancellation.
Subsection 11.1(5) is amended in the part preceding clause (a) by striking out "a taxpayer and a qualifying trust for the taxpayer" and substituting "an individual and a qualifying trust for the individual".
Subsection 11.1(6) is amended by striking out everything after "subsection 11.1(4)" and subsituting "amounts for a selling period beginning after 1996 that in total exceed the corporation's annual approved share limit for the period shall pay a tax equal to 15% of the excess.".
Subsections 11.1(7) and (8) are repealed.
The following is added after section 11.1:
Recovery of credit: first 3 years
Where, after 1996 and in the taxation year of a labour-sponsored venture capital corporation in which it first issued an approved share or in either of the two following taxation years,
(a) 80% of the shareholders' equity in respect of the Class A shares of the corporation's capital stock at any time in the year;
exceeds
(b) the total cost at that time to the corporation of its eligible investments and reserves;
the corporation shall pay a tax for the year equal to the amount determined by the following formula:
(A x 15%) - B
In this formula,
A is the greatest amount by which the amount determined under clause (a) exceeds the amount determined under clause (b);
B is the total of all taxes payable under this section by the corporation for preceding taxation years.
For each taxation year beginning after 1996, a labour-sponsored venture capital corporation shall pay a tax, in respect of each month ending in the year in respect of which it has a monthly deficiency, equal to the amount determined by the following formula:
| A x B x 15% |
| 12 |
In this formula,
A is the prescribed rate of interest under paragraph 4301(c) of the federal regulations in effect for the calendar quarter that includes that month, or any greater rate of interest prescribed by a regulation under this Act for the purpose of this subsection;
B is the amount of the monthly deficiency.
Recovery of credit: 12-month deficiency
For each taxation year beginning after 1996, a labour-sponsored venture capital corporation shall pay a tax, in respect of each particular 12-month period ending in the year in which the corporation had a monthly deficiency in each month in the period, equal to the amount determined by the following formula:
| ( | A | x 15%) - (B - C) |
| 12 |
In this formula,
A is the total of the monthly deficiencies for each month in the particular period;
B is the total of all taxes payable by the corporation under section 11.2 for preceding taxation years and taxes payable by it under this subsection in respect of a period ending before the particular period;
C is the total of all amounts refunded under subsection (5) in respect of the tax paid under this subsection by the corporation for preceding taxation years.
Subsections (1) and (2) do not apply to the taxation year of a labour-sponsored venture capital corporation in which it first issues an approved share, or to either of its two following taxation years.
A corporation that is required to pay a tax under subsection (2) for a taxation year shall pay, in addition to that tax, a penalty for the year equal to that tax.
Where
(a) a corporation is required to pay a tax under subsection (2) in respect of a 12-month period (referred to as the "first period") and a penalty under subsection (4) for the taxation year that includes that period;
(b) throughout any 12-month period (referred to as the "second period") beginning after the first period, the corporation has no monthly deficiency; and
(c) the corporation files with the minister the return required by section 11.4 for the taxation year in which the second period ends;
the treasurer shall refund to the corporation an amount equal to the total of the tax and 80% of the penalty.
Every labour-sponsored venture capital corporation that at any time in a taxation year has an approved share outstanding shall
(a) on or before the day on or before which it is required to file its return of income under Part 1 of the federal Act for the taxation year, file with the minister, without notice or demand therefor, a return for the year containing information prescribed by the regulations;
(b) estimate in the return the amount of tax and penalties, if any, payable by it under section 11.1, 11.2 or 11.3 for the year; and
(c) within 90 days after the end of the taxation year, pay to the treasurer the amount of tax and penalties, if any, payable by it under those sections for the year.
Recovery of credit: redemption of share
Where a Class A share of the capital stock of a labour-sponsored venture capital corporation is redeemed, acquired or cancelled by the corporation less than eight years after the original acquisition of the share, the person who was the shareholder immediately before the redemption, acquisition or cancellation (referred to in this section as the "vendor") shall pay a tax equal to the lesser of
(a) the labour-sponsored funds tax credit of an individual in respect of the original acquisition; and
(b) the amount that would, but for subsection (3), be payable to the vendor because of the disposition.
Non-application of subsection (1)
Subsection (1) does not apply to the redemption, acquisition or cancellation of a Class A share by a labour-sponsored venture capital corporation
(a) where the original acquisition of the share occurred before June, 1997;
(b) where the receipt issued in respect of the original acquisition of the share has been returned to the corporation; or
(c) where
(i) it occurs at the written request of the vendor who is the individual entitled to a deduction under subsection 11.1(2.1) in respect of the original acquisition of the share, the individual's spouse or former spouse or a registered retirement savings plan under which the individual or spouse is an annuitant, and
(ii) the corporation is notified in writing that the individual became disabled and permanently unfit for work or terminally ill after the original acquisition.
Withholding and remittance of tax
Where tax is payable under subsection (1) in respect of the redemption, acquisition or cancellation of a share by a labour-sponsored venture capital corporation, the corporation shall
(a) withhold from the amount otherwise payable to the vendor of the share the amount of the tax;
(b) within 30 days after the disposition, remit the amount of the tax to the treasurer on behalf of the vendor; and
(c) submit with the remitted amount a statement containing prescribed information.
Where a corporation has failed to withhold any amount required by subsection (3) to be withheld from an amount payable to a shareholder in respect of the redemption, acquisition or cancellation of a share, the corporation is liable to pay the amount to the treasurer on behalf of the shareholder and is entitled to recover the amount so paid from the shareholder.
The treasurer may pay to an individual an amount not exceeding the lesser of
(a) the tax paid under this section in respect of the redemption, acquisition or cancellation of a Class A share; and
(b) the amount, if any, by which the individual's labour-sponsored funds tax credit in respect of the original acquisition of the share exceeds the amount deducted by the individual under subsection 11.1(2.1) in respect of the share;
if the individual files a written application for the refund with the treasurer no later than two years after the end of the calendar year in which the disposition occurred.
The following is added after section 36:
Remission of provincial portion of federal tax remitted
Where, under the Financial Administration Act (Canada), remission is granted of any tax, interest or penalty paid under the federal Act by or for an individual, and where any tax, interest or penalty was paid to that individual under this Act in respect of the same circumstances that gave rise to the remission granted under the Financial Administration Act (Canada), the treasurer may, if he or she considers that the circumstances are sufficiently similar and that a remission of any money paid under this Act should be granted either for the relief of extreme hardship or because the individual received incorrect advice from or inappropriate action was taken by the Department of National Revenue, grant remission of all or any part of any tax, interest or penalty paid under this Act in such circumstances, and may authorize the repayment to the person entitled thereto of any amount remitted by the treasurer in accordance with this section.
THE MOTIVE FUEL TAX ACT
The Motive Fuel Tax Act is amended by this Part.
Clause 2(1)(a) is amended by adding "(9.2)," after "(9.1),".
The following is added after subsection 2(9.1):
Exemption for marked or coloured diesel fuel for ore recovery and transportation
A purchaser who uses diesel fuel for operating an engine exclusively off-highway for the recovery of ore, or for the transportation of ore from a mine in Manitoba to a processing centre in Manitoba, in connection with that purchaser's mining for minerals as defined in The Mining Tax Act, may purchase marked or coloured diesel for that purpose exempt from tax and without a permit.
Subsection 3(1) is amended by adding ", 2(9.1) or 2(9.2)" after "2(9)".
Subsection 3(2) is amended by adding ", 2(9.1) or 2(9.2)" after "2(9)".
Subsection 29(9) is amended in the definition "motor vehicle" by striking out "subsection 2(9) does" and substituting "subsections 2(9), 2(9.1) and 2(9.2) do".
Clause 30(1)(b) is amended
(a) by adding ", 2(9.1) or 2(9.2)" after "2(9)"; and
(b) by adding "or subsection 2(9.1) or 2(9.2)" after "inclusive".
THE RETAIL SALES TAX ACT
The Retail Sales Tax Act is amended by this Part.
Subsection 3.1(3) is amended
(a) in clause (a), by striking out "April 1, 1997" and substituting "April 1, 1998";
(b) in clause (b),
(i) by striking out "April 1, 1997" and substituting "April 1, 1998",
(ii) by striking out "March 31, 1997" and substituting "March 31, 1998", and
(iii) by striking out "August 1, 1997" and substituting "August 1, 1998"; and
(c) in clause (c), by striking out "August 1, 1997" and substituting "August 1, 1998".
Clause 3.1(4)(a) is amended by striking out "January 1, 1998" and substituting "January 1, 1999".
Subsection 3.1(6) is amended
(a) in clause (a),
(i) by striking out "March 31, 1997" wherever it occurs and substituting "March 31, 1998", and
(ii) by striking out "August 1, 1997" and substituting "August 1, 1998"; and
(b) in clause (b), by striking out "July 31, 1997" and substituting "July 31, 1998".
The following is added after section 8:
Fee for issuing confirmation of tax filing or payment status
The director may charge a fee in the amount of $50. for providing a certificate or other confirmation of the tax filing or payment status of the holder of a registration certificate or permit under this Act.
Section 10.1 is repealed and the following is substituted:
Periodic remittance may be required by director
Notwithstanding the reporting and remittance requirements of this Act and the regulations, the director may at any time require a vendor to remit, with such frequency and in such manner as the director determines to be appropriate, tax collected or deemed to be collected under this Act.
The director may require a vendor to deposit the tax required to be remitted under subsection (1) with a financial institution in an account of the Minister of Finance.
Subsection 13(7) is amended in the part preceding clause (a) by striking out "section 14" and substituting "sections 14 and 14.1".
Subsection 13(8) is amended by striking out "section 14" and substituting "sections 14 and 14.1".
Subsection 13(9) is amended by striking out "section 14" and substituting "sections 14 and 14.1".
Subsection 13(10) is amended by striking out "section 14" and substituting "sections 14 and 14.1".
Subsection 13(12) is amended by adding ", including penalties and interest to the date of payment in full," after "this Act".
Subsection 13(13) is amended
(a) in the English version, by adding "lien and" after "forms a"; and
(b) by adding "and penalties and interest in accordance with this Act to the date of payment in full" after "amount so certified".
Subsection 13(14) is amended
(a) by striking out "the registration the certificate" and substituting "the registration the amount of the debt set out in the certificate, and penalties and interest to the date of payment in full," ; and
(b) by striking out everything after "charging specific land".
Subsection 13(15.1) is amended
(a) by striking out "and certifying the amount of the debt"; and
(b) by adding ", including penalties and interest to the date of payment in full," after "upon the filing, the financing statement".
Subsection 13(16) is amended in the part preceding clause (a) by adding "including penalties and interest to the date of payment in full," after "under this Act,"
The following is added after subsection 13(16):
Authority to seize cash or credit card receipts
In executing a warrant under subsection (16), the sheriff, in addition to the sheriff's other powers, has the power to seize cash, credit card receipts or similar instruments.
Subsection 13(17) is amended by adding "including penalties and interest to the date of payment in full" after "the amount of the debt".
Subsection 14(1) is amended by adding "or deemed to be collected" after "tax collected".
The following is added after section 14:
In this section, "institution" means a bank, credit union, trust company or other similar person.
Minister may order payment by institution
Without limiting the generality of subsection 14(1), where the minister has knowledge or suspects that within 90 days an institution will lend or advance moneys to, or make a payment on behalf of, or make a payment in respect of a negotiable instrument issued by a vendor or a purchaser indebted to Her Majesty in right of Manitoba in respect of tax collected or deemed to be collected or payable under this Act who is indebted to the institution and who has granted security in respect of the indebtedness, the minister may in writing require the institution to pay in whole or in part to the minister on account of the liability of the vendor or purchaser under this Act the moneys that would otherwise be so lent, advanced or paid, and any moneys so paid to the minister are deemed to have been lent, advanced or paid, as the case may be, to the vendor or purchaser.
Minister's receipt discharges original liability
The receipt of the minister for moneys paid as required under this section is a good and sufficient discharge of the original liability to the extent of the payment.
Every institution that fails to comply with a requirement under subsection (2) with respect to moneys to be lent, advanced or paid is liable to pay to Her Majesty in right of Manitoba an amount equal to the lesser of
(a) the total of moneys so lent, advanced or paid; and
(b) the amount that the institution was required under that subsection to pay to the minister.
The amount that an institution is liable to pay to Her Majesty in right of Manitoba calculated in accordance with subsection (4) is a debt due from the institution to Her Majesty in right of Manitoba until paid.
The following is added after subsection 17(2.1):
Subsection (2.1) applies to a person who was resident and carried on business at any time in the province and was, or was required by this Act to be, a holder of a registration certificate or permit.
Subsection 24(1) is amended by striking out "or" after clause (b) and by adding the following after clause (c):
(d) collects tax and fails to comply with the requirements of subsection 10(1); or
(e) fails to comply with any requirement of section 10.1;
The following is added after subsection 24(2.1):
Penalty for contravention of subsection 10(1) or section 10.1
Every person who is guilty of an offence under clause (1)(d) or (e) is liable, on summary conviction, 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 both.
Subsection 24(2.3) is amended by striking out "or (2.1)" and substituting ", (2.1) or (2.1.1)".
The following is added after subsection 24(2.3):
Additional order regarding returns and records
In addition to the penalty described in subsection (2), (2.1) or (2.1.1), as the case may be, a justice shall order the person to file with the minister or the director, or make available to the minister or the director, any returns or records required to be filed with or made available to the minister or the director under this Act.
Subsection 24.1(2) is amended by striking out "or" after clause (c) and by adding the following after clause (d):
(e) the corporation has failed to comply with requirements under section 10.1;
(f) the corporation has failed to provide a bond as required under this Act;
(g) the corporation has failed to meet the terms of an agreement for the payment of tax arrears; or
(h) the corporation or the director of the corporation has been found guilty of an offence under this Act.
COMING INTO FORCE
Subject to subsections (2) to (12), this Act comes into force on the day it receives royal assent.
Part 1: Corporation Capital Tax Act
Section 2 comes into force on August 1, 1997 and in the event that this Act receives royal assent after that date, is retroactive and is deemed to have come into force on August 1, 1997.
Section 9 comes into force on October 1, 1997 and in the event that this Act receives royal assent after that date, is retroactive and is deemed to have come into force on October 1, 1997.
Part 3: Health and Post Secondary Education Tax Levy Act
Subsection 11(3) comes into force on January 1, 1998.
Section 13 comes into force on August 1, 1997 and in the event that this Act receives royal assent after that date, is retroactive and is deemed to have come into force on August 1, 1997.
Subsections 15(1) and 16(1) are retroactive and are deemed to have come into force on January 1, 1997.
Section 17 comes into force on July 1, 1997 and in the event that this Act receives royal assent after that date, is retroactive and is deemed to have come into force on July 1, 1997.
Section 18 is retroactive and is deemed to have come into force on March 12, 1992.
Sections 19 to 22 are retroactive and are deemed to have come into force on January 1, 1997.
Sections 24, 25, 26 and 27 come into force on October 1, 1997 and in the event that this Act receives royal assent after that date, is retroactive and is deemed to have come into force on October 1, 1997.
Section 29 is retroactive and is deemed to have come into force on April 1, 1997.
Section 30 comes into force on August 1, 1997 and in the event that this Act receives royal assent after that date, is retroactive and is deemed to have come into force on August 1, 1997.