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The Budget Implementation and Tax Statutes Amendment Act, 2002

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

S.M. 2002, c. 19

Bill 45, 3rd Session, 37th Legislature

THE BUDGET IMPLEMENTATION AND TAX STATUTES AMENDMENT ACT, 2002


 

(Assented to August 1, 2002)

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

PART 1

THE CORPORATION CAPITAL TAX ACT

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

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

2           Section 1 is amended by repealing the definitions "related group" and "unrelated group".

3           Sections 2, 3 and 11.2 and subsections 12(2) and 14(2) are repealed.

4(1)        Subsection 22(2) is replaced with the following:

Interest on debt

22(2)       A debt due to the government under this Act bears interest as prescribed by regulation under The Financial Administration Act.  The interest is payable to the minister for the use of the Crown.

4(2)        Subsection 22(3) is amended by striking out everything after "appeal," and substituting "the amount to be refunded bears interest from the day it was paid by the corporation to the day it is refunded at the same rate that a debt bears interest under subsection (2)."

PART 2

THE GASOLINE TAX ACT

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

5           The Gasoline Tax Act is amended by this Part.

6           Subsection 16(4) is amended by striking out "at the rates prescribed by the Lieutenant Governor in Council pursuant to The Financial Administration Act, and the interest is compounded annually and" and substituting "as prescribed by regulation under The Financial Administration Act, and the interest".

7           Subsection 35.2(2) is amended

(a) by striking out "or" at the end of clause (c);

(b) in clause (d), by striking out "Bankruptcy Act" and substituting "Bankruptcy and Insolvency Act" and by adding "or" at the end; and

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

(e) a compromise or arrangement has been proposed under the Companies' Creditors Arrangements Act (Canada) or a proposal has been made under the Bankruptcy and Insolvency Act (Canada) in respect of the corporation.

PART 3

THE HEALTH AND POST SECONDARY EDUCATION TAX LEVY ACT

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

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

9(1)        Subsection 2(5.1) is repealed.

9(2)        Subsection 2(5.2) is replaced with the following:

Director may allocate exemption or notch reduction

2(5.2)      If an employer fails to file a report as required by the minister under subsection 5(2.6) or files a report allocating the exemption or notch reduction in manner that is not reasonable having regard to the remuneration paid, the director may allocate the exemption or notch reduction as the director considers reasonable having regard to the remuneration paid.

10          Section 3.3 is repealed.

11(1)       Subsections 5(2.2) to (2.4) and (2.5) are repealed.

11(2)       Subsection 5(2.6) is replaced with the following:

Annual reporting for associated employers

5(2.6)      The minister may require an employer to whom subsection 2(3), (4) or (4.1) applies in a year to file with the minister, before April 1 of the next year,

(a) a report, in a form authorized by the minister, setting out the following information:

(i) the employer's name and the names of all other employers who, along with the employer, are deemed to be a single employer,

(ii) the portion of the exemption or notch reduction, if any, allocated to each of the employers, and

(iii) the following amounts, determined on an individual basis for each of the employers and on an aggregate basis for all of them:

(A) the total remuneration that was paid in the year and is subject to tax under section 3,

(B) the tax payable under section 3, and

(C) the tax paid under section 3;

(b) a copy of every information summary required to be filed by any of them for the year under the Income Tax Act (Canada) in respect of remuneration paid in the year; and

(c) a reconciliation of the remuneration on which tax is payable under this Act with the remuneration reported on the information summaries.

When filing this information, the employer must also pay any tax still owing for the year by the employer, including any interest and penalties owing because of a failure to pay tax when it was due under subsection (1).

11(3)       Subsection 5(3) is replaced with the following:

Copy of employer summaries

5(3)        The minister may require an employer to file with the minister before April 1 of any year

(a) a copy of every information summary required to be filed by the employer under the Income Tax Act (Canada) in respect of remuneration paid in the preceding year;

(b) a summary of the remuneration described in subsection 2(6) that was paid in that preceding year; and

(c) a reconciliation of the remuneration on which tax is payable under this Act with the remuneration reported on the summaries referred to in clauses (a) and (b).

11(4)       Subsections 5(4) and (5) are repealed.

12          Subsection 7(1) is replaced with the following:

Annual reporting for non-associated employer

7(1)        The minister may require an employer to whom subsection 5(2.6) does not apply in a year to file with the minister, before April 1 of the next year,

(a) a report, in a form authorized by the minister, setting out the following information:

(i) the employer's name,

(ii) the amount of any notch reduction under section 3,

(iii) the total remuneration that was paid in the year and is subject to tax under section 3,

(iv) the tax payable under section 3, and

(v) the tax paid under section 3;

(b) a copy of every information summary required to be filed by the employer for the year under the Income Tax Act (Canada) in respect of remuneration paid in the year; and

(c) a reconciliation of the remuneration on which tax is payable under this Act with the remuneration reported on the information summaries.

When filing this information, the employer must also pay any tax still owing for the year by the employer, including any interest and penalties owing because of a failure to pay tax when it was due under subsection 5(1).

13          Subsection 9(2) is replaced with the following:

Interest on debt

9(2)        A debt due to the government under this Act bears interest as prescribed by regulation under The Financial Administration Act. The interest is payable to the minister for the use of the Crown.

14          Section 26.3 is repealed.

15          The following is added after section 39:

Bond of extra-provincial contractors

40(1)       An employer who is required by section 15 of The Retail Sales Tax Act to provide security for tax payable under that Act in respect of a contract must also

(a)  deposit with the minister cash or securities; or

(b)  enter into a bond in favour of Her Majesty in right of Manitoba, in a form satisfactory to the minister;

in an amount satisfactory to the minister, to secure payment of the tax imposed under this Act.  For this purpose, the minister shall not require security in an amount greater than 2.15% of the total price of the contract.

Principal jointly liable

40(2)       A principal who is responsible under subsection 15(3) of The Retail Sales Tax Act for the employer's compliance with subsection 15(1) of that Act is also responsible for the employer's compliance with subsection (1).  If the employer fails to comply with subsection (1), the principal is jointly and severally liable with the employer for all taxes payable by the employer under this Act with respect to remuneration paid in connection with the principal's contract with the employer.

Principal's right to be indemnified

40(3)       A principal who pays an amount under subsection (2) on behalf of an employer is entitled to be indemnified by the employer, and may withhold that amount from any amount owing to the employer.

PART 4

THE INCOME TAX ACT

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

16          The Income Tax Act is amended by this Part.

17          Subsection 3(4) is replaced with the following:

Allocation to municipalities

3(4)        From the taxes paid under clause (1)(a) by individuals, including mutual fund trusts, for a taxation year, the amount determined by the following formula is to be allocated and distributed to municipalities, Indian reserves, communities under The Northern Affairs Act or other areas of the province, in accordance with The Provincial-Municipal Tax Sharing Act:

Total allocation = 2.2% x (T - C)

In this formula,

T   is the total of the amounts each of which is the amount determined for the year as one of those individuals' "tax otherwise payable under this Part" in subsection 120(4) of the federal Act; and

C   is the total of the amounts each of which is the proportion of one of those mutual fund trusts' "tax otherwise payable under this Part" in subsection 120(4) of the federal Act for the year that

(a) the trust's capital gains refund for the year under this Act

is of

(b) the trust's tax otherwise payable for the year under this Act.

Recovery of overpayment

3(5)        If after the end of a year the Minister of Finance for Manitoba determines that the total allocated for the year under subsection (4) exceeds the amount required to be allocated for the year, the total to be allocated for a later year may be reduced by the amount of the excess.

Recovery of overpayment from years before 2000

3(6)        If the Minister of Finance for Manitoba determines that the total allocated for a year after 1976 and before 2000 under subsection 4(5) of this Act as it read before January 1, 2000, or under subsection 4(3.1) of The Income Tax Act, R.S.M. 1970, c. I10, exceeds the amount that would have been required to be allocated under that subsection for the year if it were calculated as subsection (4) now requires it to be calculated, the total to be allocated for a later year may be reduced by the amount of the excess.

18          Rule 7 in subsection 4(1) is amended by striking out "and" at the end of clause (c) and by adding the following after clause (d):

(e) if the individual is not a trust, the individual's mineral exploration tax credit determined under subsection 11.7(2); and

(f) if the individual is not a trust, the total of all amounts each of which is the individual's unused mineral exploration tax credit from any of the three immediately following taxation years or any of the 10 immediately preceding taxation years, as determined under subsection 11.7(3).

19(1)       In the following subsections, the amounts set out opposite in the second column are replaced, wherever they occur, with the corresponding amounts in the third column:

Subsection Strike out Substitute
4.6(3) (personal amount) $7,412. $7,634.
4.6(4) (age) $3,619.
$26,941.
$3,728.
$27,749.
4.6(5) (spouse) and (6) (equivalent-to-spouse) $6,293.
$630.
$6,482.
$649.
4.6(7) (infirm dependent) $3,500.
$4,966.
$3,605.
$5,115.
4.6(8) (caregiver) $15,453.
$11,953.
$15,917.
$12,312.
4.6(11) (disability) $6,000.
$3,500.
$2,050.
$6,180.
$3,605.
$2,112.
 
 
19(2) Subsection 4.6(12) is replaced with the following:

Dependant disability amount

4.6(12)     An individual who is entitled to deduct an amount under subsection 118.3(2) of the federal Act for the taxation year may claim the amount determined by the following formula:

A/.16

In this formula, A is the amount deducted by the individual for the year under that subsection.

19(3)       Subsection 4.6(16) is replaced with the following:

Amounts transferred from spouse or common-law partner

4.6(16)     An individual who is entitled to deduct an amount under section 118.8 of the federal Act for the taxation year may claim the amount determined by the following formula:

A/.16

In this formula, A is the amount deducted by the individual for the year under that section.

20          Subsection 4.11(1) is amended

(a) in the part before the table, by adding "after 2001" after "taxation year"; and

(b) by replacing the table with the following:

Total contributions (T) Political Contribution
Credit (PCC)
$200. or less PCC = .75 x T
more than $200. but not more than $550. PCC = $150. + (T - $200.)/2
more than $550. PCC = $325. + (T - $550.)/3
 
 
21(1) Subsections 4.13(1) and (2) are replaced with the following:

Mutual fund trust capital gains refund

4.13(1)     A mutual fund trust is entitled to receive, for a taxation year after 2000, a refund equal to the lesser of

(a) its Manitoba refundable capital gains tax on hand at the end of the year; and

(b) the amount determined by the following formula:

.087 x A x B/C

In this formula,

A   is the trust's capital gains redemptions under subsection 132(4) of the federal Act for the year;

B   is the trust's Manitoba income for the year; and

C   is the trust's income for the year.

Manitoba refundable capital gains tax on hand

4.13(2)     For the purpose of subsection (1), the trust's Manitoba refundable capital gains tax on hand at the end of a taxation year is the amount, if any, by which the total of

(a) the trust's Manitoba refundable tax on hand at the end of 2000, as determined by the minister; and

(b) the total of all amounts, each of which is an amount in respect of the year or a preceding taxation year ending after 2000 throughout which the trust was a mutual fund trust (referred to in this clause as the "particular year"), that is equal to the lesser of

(i) the tax otherwise payable under this Act for the particular year, and

(ii) the amount determined by the formula

.174 x A x B/C

where

A   is the lesser of the trust's income for the particular year and its taxed capital gains under subsection 130(3) of the federal Act for the particular year,

B   is the trust's Manitoba income for the particular year, and

C   is the trust's income for the particular year;

exceeds the total of the trust's refunds under this section for preceding taxation years ending after 2000.

21(2)       Subsection 4.13(3) is amended by striking out "or (2)".

22          The definition "principal residence" in section 5.3 is amended by striking out the first sentence after clause (d) and replacing it with the following:

It includes contiguous land that contributes to its use and enjoyment as a residence, but does not include any land or premises that are exempt from municipal taxes and are not the subject of a grant in lieu of municipal taxes.  It also does not include any lands that are not assessed as residential property.

23          The English version of subsection 5.4(4) is amended by striking out "a" before "references".

24          Clause 5.7(1)(b) is amended by adding "or under subclause 4.10(2)(b)(ii) of this Act" after "federal Act".

25          The centered heading before section 5.8 and sections 5.8 to 5.10 are repealed.

26          Subsection 7(2) is replaced with the following:

Income eligible for small business deduction

7(2)        For the purpose of this section, the portion of a corporation's taxable income for a taxation year that is eligible for a small business deduction under this section is the amount determined by the following formula:

A x B/C

In this formula,

A   is the least of the following amounts:

(a) the amount that would be determined for the corporation for the year under clause 125(1)(a) of the federal Act if the references in the description of M in the definition "specified partnership income" in subsection 125(7) of that Act to "$200,000" and "$548" were read

(i) for the 2002 taxation year, as "$300,000" and "$822", respectively,

(ii) for the 2003 taxation year, as "$320,000" and "$877", respectively,

(iii) for the 2004 taxation year, as "$360,000" and "$986", respectively,

(iv) for the 2005 and later taxation years, as "$400,000" and "$1,096", respectively,

(b) the amount determined for the corporation for the year under clause 125(1)(b) of the federal Act, and

(c) the corporation's business limit for the year under clause 125(1)(c) of the federal Act, plus

(i) for the 2002 taxation year, the proportion of 50% of that business limit that the number of days in the corporation's taxation year that fall within 2002 is of the number of days in that taxation year,

(ii) for the 2003 taxation year, the total of

(A) the proportion of 50% of that business limit that the number of days in the corporation's taxation year that fall within 2002 is of the number of days in that taxation year, and

(B) the proportion of 60% of that business limit that the number of days in the corporation's taxation year that fall within 2003 is of the number of days in that taxation year,

(iii) for the 2004 taxation year, the total of

(A) the proportion of 60% of that business limit that the number of days in the corporation's taxation year that fall within 2003 is of the number of days in that taxation year, and

(B) the proportion of 80% of that business limit that the number of days in the corporation's taxation year that fall within 2004 is of the number of days in that taxation year,

(iv) for the 2005 taxation year, the total of

(A) the proportion of 80% of that business limit that the number of days in the corporation's taxation year that fall within 2004 is of the number of days in that taxation year, and

(B) the proportion of that business limit that the number of days in the corporation's taxation year that fall within 2005 is of the number of days in that taxation year, and

(v) for the 2006 and any later taxation year, that business limit;

B   is the corporation's taxable income for the year earned in Manitoba; and

C   is the corporation's taxable income for the year earned in Canada.

27          Subsection 7.3(7) is amended by striking out "balance-due day" and substituting "filing-due date".

28(1)       Subsection 7.5(1) is amended

(a) by repealing the definitions "affiliate" and "total production costs"; and

(b) in clause (a) of the definition "government assistance", by striking out everything after "federal Act".

28(2)       Subsections 7.5(2), (4) and (5) are repealed.

29          Section 7.6 is replaced with the following:

Film and video production tax credit

7.6(1)      Subject to subsection (2), a corporation that has produced an eligible film in Manitoba and meets the criteria set out in section 7.7 may deduct from the tax otherwise payable by it under this Act for a taxation year the amount certified by the minister as the amount determined by the following formula:

.35(A - B)

In this formula,

A   is the amount of its eligible salaries for the film for the year; and

B   is the total of all government assistance received or receivable by the corporation in connection with those salaries.

Duplicate claims

7.6(2)      If more than one corporation claims an amount under subsection (1) in respect of the same eligible salaries, the tax credit of each of them in respect of those salaries is nil, unless they file with the minister an agreement signed by all of them that allocates among them the amounts that may be claimed in respect of those salaries.

Interpretation

7.6(3)      For the purpose of subsection (2), to the extent that eligible salaries of a corporation in respect of an eligible film can reasonably be attributed to amounts paid as eligible salaries by another corporation, they must be treated as the same eligible salaries.

30          Section 7.8 is amended

(a) in clause (a), by striking out everything after "year"; and

(b) by repealing clause (b).

31          Subsection 7.9(2) is amended by adding the following after clause (l):

(m) an incomplete production.

32          Clause 7.10(a) is amended by striking out "total" and substituting "eligible salaries and".

33          Section 7.11 is renumbered as subsection 7.11(1) and the following is added as subsection 7.11(2):

Recovery of overpayment of tax credit

7.11(2)     If the minister determines that all or any part of an amount paid or applied under subsection (1) did not qualify as a tax credit of the corporation to whom or for whose benefit the amount was paid or applied, that amount or part of the amount is recoverable from the corporation and is a debt due by the corporation to Her Majesty in right of Manitoba.

34          Section 10 is repealed.

35(1)       The definition "aquisition initiale" in the French version of subsection 11.1(1) is amended

(a) by striking out "aquisition" and substituting "acquisition"; and

(b) by placing the definition in the proper alphabetical order.

35(2)       Subsection 11.1(1.2) of the English version is amended in the part before clause (a) by striking out "corporation's whose" and substituting "corporation whose".

36(1)       The definition "eligible share" in subsection 11.6(1) is amended by striking out "2002" in clauses (d) and (f) and substituting "2005".

36(2)       Subsection 11.6(3) is replaced with the following:

Manitoba equity tax credit

11.6(3)     Subject to subsection (7), a taxpayer's equity tax credit for a taxation year is the total of all amounts each of which is an amount determined for a day in the year as the lesser of

(a) $1,500. divided by the number of days in the year; and

(b) the total of all amounts each of which is an amount determined by the following formula in respect of a share that is owned at the end of the day by the taxpayer or a qualifying trust for the taxpayer:

.05 x A/B

In this formula,

A   is

(i) if at the end of the day the taxpayer is an eligible investor in relation to the share, the creditable amount in respect of the share at that time, and

(ii) in any other case, nil; and

B   is the number of days in the year.

37          The following is added after section 11.6:

"Flow-through mining expenditure" defined

11.7(1)     In this section, "flow-through mining expenditure" of an individual for a taxation year means the portion of the individual's flow-through mining expenditure, as defined in subsection 127(9) of the federal Act, for the year that

(a) was renounced to the individual, or to a partnership of which the individual is a member, in respect of a share acquired under an agreement made after April 22, 2002; and

(b) is directly attributable to expenditures that

(i) were incurred after April 22, 2002 for exploration in Manitoba for a mineral resource in Manitoba,

(ii) are for goods or services, or both goods and services, most of which, if they were available in Manitoba, were provided in Manitoba,

(iii) have been approved by the minister responsible for The Mines and Minerals Act, or a person authorized by the minister for the purpose, as expenditures that qualify for a mineral exploration tax credit, and

(iv) are not expenditures in relation to which a tax credit under this section may be claimed by another person.

Mineral exploration tax credit

11.7(2)     An individual's mineral exploration tax credit for a taxation year after 2001 is the lesser of the following amounts:

(a) the amount that would be determined under rule 7 of subsection 4(1) if the rule were read without reference to clauses (e) and (f); and

(b) 10% of the individual's flow-through mining expenditure for the year.

Unused credit from other years

11.7(3)     An individual's unused mineral exploration tax credit from any of the three immediately following taxation years or any of the 10 immediately preceding taxation years after 2001 is such amount as the individual claims, not exceeding the amount determined by the following formula:

A - B - C

In this formula,

A   is the amount determined under clause (2)(b) for that following or preceding year;

B   is the amount determined under clause (2)(a) for that following or preceding year; and

C   is the total of all amounts claimed under this subsection in respect of that following or preceding year in computing the individual's tax payable under this Act for other years.

Taxpayer's information return

11.7(4)     An individual is not entitled to a mineral exploration tax credit for a taxation year unless the amount claimed is proven by filing with the minister

(a) an information return issued by the corporation that renounced the flow-through mining expenditures to which the credit is attributable; and

(b) if the expenditures were renounced to a partnership of which the individual is a member, an information return issued by the partnership.

The information returns must include prescribed information and be in a form approved by the minister.

Information summary

11.7(5)     A corporation or partnership that issues an information return under subsection (4) for a taxation year must provide to the minister responsible for The Mines and Minerals Act, within 90 days after the end of the year and in a form approved by that minister, a summary of the information provided in those returns, together with any other information that minister requires

(a) to determine whether the expenditures renounced by the corporation are flow-through mining expenditures; or

(b) to administer mineral exploration tax credits and evaluate their effectiveness.

Regulations

11.7(6)     The Lieutenant Governor in Council may make regulations

(a) respecting the acceptance of expenditures for the purposes of the mineral exploration tax credit;

(b) respecting returns of information under this section and the information to be included in those returns;

(c) respecting the maintenance of books and records, and the provision of information or access to information, for the purpose of verifying the validity of a claim for a mineral exploration tax credit;

(d) respecting any matter the Lieutenant Governor in Council considers necessary or advisable to carry out the purpose of this section.

38          The following is added after section 57:

Requirement to provide specified information

57.1(1)     The Minister of Finance for Manitoba may require a department or agency of the government that keeps specified information about persons to provide a copy of any or all of that information to the minister.

Use of information

57.1(2)     Information obtained under subsection (1) may be used only for the purposes of this Act and, subject to the provisions of the federal Act, for any related purpose of that Act.

"Specified information" defined

57.1(3)     In this section, "specified information" about a person means

(a) the person's name and any identifying number or symbol;

(b) the person's residential street address and postal code;

(c) the person's date of birth or death;

(d) the date of the person's registration or deregistration with a government department or agency;

(e) a date that the person used the services of a government department or agency;

(f) any information relevant to the person's eligibility for a credit under section 4.6 or 5; and

(g) information referred to in clauses (a) to (f) about a spouse, common-law partner or dependant of the person.

"Specified information" exclusions

57.1(4)     Despite subsection (3), "specified information" about a person does not include a person's PHIN, as defined in The Personal Health Information Act, or any information about the health, disability or medical condition or treatment of any person.

39          The French version of the subsection after subsection 61(5) is renumbered as subsection 61(6).

PART 5

THE MINING TAX ACT

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

40          The Mining Tax Act is amended by this Part.

41(1)       Subsection 16(1) is replaced with the following:

Interest on debt

16(1)       A debt due to the government under this Act bears interest as prescribed by regulation under The Financial Administration Act.  The interest is payable to the minister for the use of the Crown.

41(2)       Subsection 16(3) is amended by striking out everything after "appeal," and substituting "the amount to be refunded bears interest, from the day it was paid by the operator to the day it is refunded, at the same rate that a debt bears interest under subsection (1)."

PART 6

THE MOTIVE FUEL TAX ACT

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

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

43(1)       Subsection 2(28) is amended

(a) by repealing clauses (e) and (f); and

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

(g) propane or butane under subsection (14), (15) or (16) at the rate of 3.0¢ per litre; and

43(2)       Subsection 2(31) is repealed.

44          Subsection 17(4) is amended by striking out "at the rates prescribed by the Lieutenant Governor in Council pursuant to The Financial Administration Act, and the interest is compounded annually and" and substituting "as prescribed by regulation under The Financial Administration Act, and the interest".

45          Subsection 34.2(2) is amended

(a) by striking out "or" at the end of clause (c);

(b) in clause (d), by striking out "Bankruptcy Act" and substituting "Bankruptcy and Insolvency Act" and by adding "or" at the end; and

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

(e) a compromise or arrangement has been proposed under the Companies' Creditors Arrangements Act (Canada) or a proposal has been made under the Bankruptcy and Insolvency Act (Canada) in respect of the corporation.

PART 7

THE PROVINCIAL-MUNICIPAL TAX SHARING ACT

C.C.S.M. c. T5 amended

46          The following is added after section 2 of The Provincial-Municipal Tax Sharing Act:

Deferral for anticipated reductions

2.1         If the total to be allocated under section 2 for a year is greater than the total allocated for the immediately preceding year and the Minister of Finance anticipates a reduction in the amount to be allocated for a future year, the Lieutenant Governor in Council may defer the allocation and distribution of all or any part of the excess to the future year to offset the anticipated reduction in that year.

PART 8

THE RETAIL SALES TAX ACT

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

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

48(1)       Subsection 1(1) is amended

(a) in clause (b) of the definition '"purchase price" or "sale price"', by adding "postage or" before "installation";

(b) by repealing the definition "storage";

(c) by replacing the definitions "tangible personal property", "use" and "vendor" with the following:

"tangible personal property" means

(a) personal property that can be seen, weighed, measured, felt or touched, or that is in any other way perceptible to the senses,

(b) machinery, equipment and apparatus, including storage structures, installed on, under or in, or attached to, buildings or land and used in manufacturing, producing, processing, storing, handling, packaging, displaying, measuring, monitoring, transporting, transmitting or distributing tangible personal property, or in providing a service,

(c) plumbing, heating, cooling, electrical, electronic and telecommunication systems and components installed on, under or in, or attached to, buildings or land,

(d) devices for attaching property referred to clause (b) or (c) to land or a building, and

(e) software, including any document or manual designed to facilitate the use of software or any part of it; (« biens personnels corporels »)

"use" includes

(a) the exercise of any right or power over tangible personal property incidental to the ownership of that property, and

(b) the storing, keeping or retaining in Manitoba of tangible personal property for any purpose except

(i)  for sale in the course of a business, or

(ii)  for the purpose of being processed, fabricated or manufactured into, attached to or incorporated into other tangible personal property; (« utilisation »)

"vendor" means a person who in the course of business

(a) sells or leases tangible personal property, or offers or keeps tangible personal property for sale or lease, directly to a purchaser at a retail sale in the province, or

(b) sells a service, or offers a service for sale, directly to a purchaser at a retail sale in the province,

and includes a person who holds a subsisting vendor's registration certificate issued by the minister; (« marchand »)

48(2)       The following is added after subsection 1(1.1):

Interpretation of "retail sale in the province"

1(1.2)      For the purposes of the definition "vendor" in subsection (1), a retail sale in the province includes a retail sale of tangible personal property by a seller who does not otherwise carry on business in the province, if

(a) the property is acquired for use or consumption in the province;

(b) the seller causes the property to be delivered in the province;

(c) the seller, directly or through an agent, solicits orders for tangible personal property from persons in the province, by advertising or by any other means; and

(d) the seller accepts orders to purchase tangible personal property that originate in the province.

48(3)       Subsection 1(2) is replaced with the following:

No incorporation in real property

1(2)        When machinery, equipment or apparatus, or a system or component, is installed on, under or in, or attached to, land or a building, it is deemed for the purposes of

(a) clause (b) of the definition "consumption" in subsection (1); and

(b) clause 4(1)(e);

not to be incorporated into or as part of real property.

49(1)       The following is added after subsection 2(5):

Temporary use

2(5.1)      When a vendor who, having acquired a vehicle exclusively for resale, temporarily uses it or allows it to be used for any purpose, other than for resale, while continuing to hold it for resale,

(a) subsection (5) does not apply in respect of the temporary use; and

(b) the vendor shall pay a tax, for each month in which such a temporary use occurred, equal to

(i) 7% of 1/36th of the vendor's purchase price of the tangible personal property, or

(ii) any lesser amount prescribed or determined by regulation.

If tax is payable under this subsection for any month, the vendor must report and remit the tax in accordance with the regulations.

Onus

2(5.2)      A vendor who claims that subsection (5) does not apply in respect a vehicle because of subsection (5.1) has the onus of proving that subsection (5.1) applies.

49(2)       The following is added after subsection 2(9.1):

Trade-in not acquired at a retail sale

2(9.2)      Subsection (9) does not apply to property accepted from a purchaser in trade if the purchaser did not acquire the property at a retail sale.

50          Subsection 2.3(5) of the English version is amended in the first column of the table by striking out "eight calendar" and substituting "eighth calendar".

51(1)       Subsection 3(1) is amended

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

(c.1) tampons and sanitary napkins;

(b) in subclause (yy)(i), by striking out "2002" and substituting "2003".

51(2)       Subsection 3(11) is amended by striking out "section 2" wherever it occurs and substituting "subsection 2(1)".

51(3)       The following is added after subsection 3(11.3):

Refund administration fee

3(11.4)     The minister may deduct and withhold an administration fee of $25. from a refund to be made by the minister under subsection (11), (12) or (13), unless the minister received the application for the refund before July 2002.

51(4)       Subsection 3(22) is replaced with the following:

Exemption: sale with real property

3(22)       Despite section 2, when real property is sold, no tax is payable on any tangible personal property that is affixed to or forms part of the real property if,

(a) in the case of machinery, equipment or apparatus attached to buildings or land sold as a manufacturing plant,

(i) the machinery, equipment or apparatus continues to be used as part of the manufacturing plant for at least six months after the sale, and

(ii) tax was previously paid under section 2, or would have been payable but for any exemption allowed under the Act, on the full and fair value of the machinery, equipment or apparatus; and

(b) in any other case, tax was previously paid under section 2, or would have been payable but for any exemption allowed under the Act, on the full and fair value of the tangible personal property.

51(5)       Subsection 3(27.1) is amended in the part before clause (a) by striking out "2002" and substituting "2003".

52          Section 3.1 is repealed.

53(1)       Subsection 4(1) is amended

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

(b) a telecommunication service

(i) in respect of a telecommunication that begins and ends within the province,

(ii) that is a dedicated telecommunication service,

(iii) that is invoiced with respect to a transmitter that is ordinarily situated within the province, unless it is in respect of a telecommunication that begins and ends in another jurisdiction and is taxed in that jurisdiction, or

(iv) that begins within the province and ends outside it, and is not invoiced with respect to a transmitter that is ordinarily situated outside the province;

(b) by repealing clause (c).

53(2)       Subsection 4(2) is replaced with the following:

Proration of purchase price for dedicated telecommunication service

4(2)        For the purpose of subclause (1)(b)(ii), if the line for a dedicated telecommunication service is not located entirely within the province, the purchase price shall be prorated, in accordance with the regulations, based on the portion of the line that is located within the province.  If a telecommunication service consists of both a dedicated telecommunication service and a non-dedicated telecommunication service, the purchase price shall be allocated between the services in accordance with the regulations.

53(3)       Subsection 4(3) is amended

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

"dedicated telecommunication service" means the right, whether exercised or not, to send from or receive in the province one or more telecommunications by means of a dedicated line; (« service de télécommunications par voie de ligne spécialisée »)

"telecommunication service" means the right, whether exercised or not, to send or receive one or more telecommunications by means of a transmitter that is ordinarily situated in the province, and includes

(a) sending or receiving a telecommunication by means of a transmitter that is ordinarily situated in the province,

(b) sending or receiving a telecommunication that is invoiced with respect to a transmitter that is ordinarily situated in the province, and

(c) a dedicated telecommunication service; (« service de télécommunications »)

"transmitter" means a facility or instrument by which a purchaser of a telecommunication service may send or receive the telecommunications that may be sent or received under that service; (« émetteur »)

(b) by replacing the definition "line" with the following:

"line" includes

(a) the space between transmitters, and

(b) any other channel for transmitting communications; (« ligne »)

54          Section 8.1 is amended by striking out everything after "providing a certificate" and substituting "under section 8."

55(1)       Subsection 10(1) is amended by striking out "the payment over of" and substituting "remitting".

55(2)       Subsections 10(2) to (8) are replaced with the following:

Extension of trust

10(2)       Despite any provision of this or any other Act, when a vendor fails to remit an amount as required by this Act or the regulations, property of the vendor, and property held by any secured creditor of the vendor that but for a security interest would be property of the vendor, equal in value to the amount required to be remitted is deemed, from the time the amount was to have been remitted,

(a) to be held in trust for Her Majesty in right of Manitoba and separate and apart from the property of the vendor, whether or not the property is subject to a security interest; and

(b) to form no part of the estate or property of the vendor, whether or not the property has in fact been kept separate and apart from the estate or property of the vendor and whether or not the property is subject to a security interest.

Beneficial ownership of property

10(3)       The property described in subsection (2) is deemed to be beneficially owned by Her Majesty in right of Manitoba despite any security interest created before or after the coming into force of this subsection in the property or in the proceeds of the property, and the proceeds of the property must be paid to the minister in priority to all such security interests.

Exception

10(4)       Subsections (2) and (3) do not apply in proceedings to which the Bankruptcy and Insolvency Act (Canada) or the Companies' Creditors Arrangement Act (Canada) applies.

Minister's certificate required before distribution

10(5)       Every person who, as assignee, liquidator, administrator, receiver, receiver-manager, secured or unsecured creditor, or agent of the creditor, trustee or other like person, other than a trustee appointed under the Bankruptcy and Insolvency Act (Canada), takes control or possession of a vendor's property must

(a) notify the minister in writing, within 30 days after taking possession or control of the property, that the person has taken control or possession of it; and

(b) before distributing the property or proceeds of the property, obtain from the minister a certificate confirming that all amounts required to be remitted by the vendor, including any interest and penalties payable by the vendor, have been paid or remitted or that security acceptable to the minister has been given.

Minister to advise of indebtedness

10(6)       As soon as practicable after receiving a notice from a person under clause (5)(a), the minister must advise the person of the amount required to be remitted by or on behalf of the vendor, and the amount of any interest and penalties owing by the vendor.

Liability for distribution without certificate

10(7)       A person who, being required to obtain a certificate under clause (5)(b) before distributing property or proceeds, fails to do so is personally liable to Her Majesty in right of Manitoba for an amount equal to the lesser of

(a) the fair value, at the time of the distribution, of the property or proceeds distributed; and

(b) the amount that the vendor is required to remit, plus any interest and penalties payable by the vendor.

Interpretation

10(8)       In this section, "secured creditor" and "security interest" have the same meanings as in section 14.

56(1)       Subsection 13(4) is replaced with the following:

Interest on debt

13(4)       A debt due to the government under this Act bears interest as prescribed by regulation under The Financial Administration Act.  The interest is payable to the minister for the use of the Crown.

56(2)       Subsection 13(6) is repealed.

57          The definition "security interest" in subsection 14(1) is amended by adding ", other than an interest exempted by regulation," after "interest in property".

58(1)       Subsection 17(2) is replaced with the following:

Books and records to be made available

17(2)       Every vendor, and every other person who is or has been carrying on business in Manitoba, must keep books of account, records and other documents, in accordance with the regulations, for all transactions in respect of which the person is required to pay or to collect and remit tax under this Act.  The person must

(a) make the books, records or documents available for inspection, examination and audit; and

(b) if the person does not make them available for inspection, examination or audit in Manitoba, pay to the minister the amount assessed by the minister in respect of expenses necessarily incurred in inspecting, examining or auditing them at the place where they are kept.

An amount assessed under clause (b) is a debt due to Her Majesty in right of Manitoba, and the person assessed is a debtor of the government for the purposes of this Act and a tax debtor for the purpose of section 14.

58(2)       Subsections 17(2.1) and (2.2) are repealed.

59          Subsection 19(6) is amended by striking out everything after "time of refund" and substituting "at the rate applicable under section 13 to a debt owing under this Act during that period."

60          Subsection 24.1(2) is amended

(a) in clause (c), by striking out "the corporation has lost control or possession of its property in a manner described in section 10" and substituting "a person has taken control or possession of the corporation's property as described in subsection 10(5)";

(b) in clause (d), by striking out "Bankruptcy Act" and substituting "Bankruptcy and Insolvency Act"; and

(c) by striking out "or" at the end of clause (g), by adding "or" at the end of clause (h) and by adding the following after clause (h):

(i) a compromise or arrangement has been proposed under the Companies' Creditors Arrangements Act (Canada) or a proposal has been made under the Bankruptcy and Insolvency Act (Canada) in respect of the corporation.

61          Subsection 29(1) is amended by adding the following after clause (hh):

(ii) defining "apparatus", "systems" and "components" for the purpose of the definition "tangible personal property" in subsection 1(1);

(jj) for the purpose of subsection 2(5.1) (temporary use of vehicles),

(i) prescribing reporting and remittance requirements, and

(ii) prescribing amounts, or a method of determining an amount, payable as tax in respect of the temporary use of vehicles;

(kk) prescribing services that are to be included among, or excluded from, processing or installation services under clause 4(1)(e);

(ll) exempting interests for the purpose of the definition "security interest" in subsection 14(1).

PART 9

THE REVENUE ACT

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

62          The Revenue Act is amended by this Part.

63          Subsection 3(11) is replaced with the following:

Taxable product acquired otherwise than from a dealer

3(11)       A purchaser who is required to pay tax on taxable product purchased otherwise than from a dealer must report the purchase and pay the tax in accordance with the regulations.

64          The following is added after subsection 6(7):

Penalty for late payment

6(8)        A dealer or purchaser who fails to remit an amount when it is due is liable to pay, in addition to any other penalty payable under this Act, a penalty equal to 5% of the amount.

Penalty for late filing of return

6(9)        A dealer or purchaser who fails to file a complete return when it is due is liable to pay, upon assessment by the minister, a penalty of not more than $100. for each day during which the failure continues.

65(1)       Subsection 12(2) is amended

(a) in the subsection heading of the English version, by adding "and penalty" after "Tax"; and

(b) in the subsection, by adding "and any penalty" after "tax".

65(2)       Subsection 12(3) is replaced with the following:

Interest on debt

12(3)       A debt due to the government under this Act bears interest as prescribed by regulation under The Financial Administration Act.  The interest is payable to the minister for the use of the Crown.

66          Subsection 22.1(2) is amended

(a) by striking out "or" at the end of clause (c);

(b) in clause (d), by striking out "Bankruptcy Act" and substituting "Bankruptcy and Insolvency Act" and by adding "or" at the end; and

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

(e) a compromise or arrangement has been proposed under the Companies' Creditors Arrangements Act (Canada) or a proposal has been made under the Bankruptcy and Insolvency Act (Canada) in respect of the corporation.

67          Section 33(1) is amended by adding the following definitions in alphabetical order:

"common-law partner" of a person means another person who, not being married to the person, is cohabiting with him or her in a conjugal relationship and

(a) has so cohabited with the person for a continuous period of at least one year, or

(b) is the parent of a child of the person,

and, for the purpose of clause (a), persons who have been cohabiting with each other in a conjugal relationship are deemed to continue to cohabit in that relationship throughout any period of separation unless it is a period of at least 90 days throughout which they were not cohabiting because of a breakdown of their conjugal relationship; (« conjoint de fait »)

"former common-law partner" of a person means another person who was a common-law partner of the person after this definition came into force and is no longer a common-law partner of the person; (« ex-conjoint de fait »)

"non-commercial property" means property that

(a) is owned by a person, alone or together with his or her spouse or common-law partner and is used by them primarily as their family residence or for their recreational purposes, or

(b) is owned by a person, alone or together with his or her former spouse or common-law partner, and was used by them, while they were spouses or common-law partners of each other, primarily as their family residence or for their recreational purposes; (« bien non commercial »)

68(1)       Subclauses 35(1)(b)(ii) and (iii) are amended by adding "or common-law partner" after "spouse".

68(2)       Clause 35(1.1)(a) is amended by adding "or common-law partner" after "spouse".

69          Section 36 is amended

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

(e) a transfer of non-commercial property by a person or the executor or administrator of a person's estate to the person's spouse or common-law partner or former spouse or common-law partner.

(b) by renumbering it as subsection 36(1) and adding the following as subsection 36(2):

Evidence of eligibility for exemption

36(2)       A transferee who claims an exemption under clause (1)(e) shall verify the claim by filing with the collector a statutory declaration in a form satisfactory to the collector.

70          Subsection 39(7) is replaced with the following:

Interest on tax owing

39(7)       The tax owing under a notice of assessment bears interest, beginning the 30th day after the assessment date shown on the notice, as prescribed under The Financial Administration Act.  The interest is payable to the minister for the use of the Crown.

PART 10

THE TOBACCO TAX ACT

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

71          The Tobacco Tax Act is amended by this Part.

72          Subsection 2(1) is amended

(a) in clause (a), by striking out "9.6¢" and substituting "14.5¢";

(b) in clause (c), by striking out "$1.18" and substituting "$1.87";

(c) in clause (d), by striking out "8.3¢" and substituting "13.2¢";

(d) in subclause (e)(i), by striking out "99¢" and substituting "$1.69"; and

(e) in subclause (e)(ii), by striking out "" and substituting "11.9¢".

73          Subsection 14(4) is amended in the part after clause (d) by striking out "at the rates prescribed by the Lieutenant Governor in Council pursuant to The Financial Administration Act, and the interest is compounded annually and" and substituting "as prescribed by regulation under The Financial Administration Act, and the interest".

74          Subsection 26.2(2) is amended

(a) by striking out "or" at the end of clause (c);

(b) in clause (d), by striking out "Bankruptcy Act" and substituting "Bankruptcy and Insolvency Act" and by adding "or" at the end; and

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

(e) a compromise or arrangement has been proposed under the Companies' Creditors Arrangements Act (Canada) or a proposal has been made under the Bankruptcy and Insolvency Act (Canada) in respect of the corporation.

PART 11

CONSEQUENTIAL AMENDMENTS AND COMING INTO FORCE

CONSEQUENTIAL AMENDMENTS

C.C.S.M. c. F55 consequential amendments

75(1)       The Financial Administration Act is amended by this section.

75(2)       Subsection 25(1) is amended by striking out "and" at the end of clause (a) and by replacing clause (b) with the following:

(b) prescribe a rate of interest, or a method for determining a rate of interest, on amounts owing to the government, which may be different for different types of liabilities; and

(c) establish how interest is to be calculated and compounded, which may be different for different types of liabilities.

75(3)       The following is added after subsection 25(2):

Effective date of regulation

25(3)       A regulation made under clause (1)(c) is, if it so provides, effective with reference to a period before it was registered.

Unproclaimed provision of F55 repealed

75(4)       Subsection 25(3) of The Financial Administration and Consequential Amendments Act, S.M. 1996, c. 59, is repealed.

76          Subsection 4(1), sections 12 and 77, and subsection 89(1) of The Statute Law Amendment (Taxation) Act, 2000, S.M. 2000, c. 39, are repealed.

COMING INTO FORCE

Coming into force

77(1)       Except as otherwise provided in this section, this Act comes into force on the day it receives royal assent.

Part 2: The Gasoline Tax Act

77(2)       Section 7 is retroactive and is deemed to have come into force on April 23, 2002.

Part 3: The Health and Post Secondary Education Tax Levy Act

77(3)       Section 15 is retroactive and is deemed to have come into force on July 1, 2002.

Part 4: The Income Tax Act

77(4)       Subsection 3(4) of The Income Tax Act, as enacted by section 17 of this Act, is retroactive and is deemed to have come into force on January 1, 2000.

77(5)       Section 18, subsection 19(1) and sections 20, 25 and 26 are retroactive and are deemed to have come into force on January 1, 2002.  For greater certainty, sections 18, 25 and 26 apply only to taxation years ending on or after that day.

77(6)       Subsections 19(2) and (3) and sections 21 and 39 are retroactive and are deemed to have come into force on January 1, 2001.  For greater certainty, section 21 applies only to taxation years ending on or after that day.

77(7)       Section 27 is retroactive and is deemed to have come into force on August 18, 2000.

77(8)       Sections 28 to 31 and 37 are retroactive and are deemed to have come into force on April 23, 2002.  For greater certainty, section 29 applies only to applications received after that day.

77(9)       Subsection 36(1) is retroactive and is deemed to have come into force on June 30, 2002.

Part 5: The Mining Tax Act

77(10)      Section 41 is retroactive and is deemed to have come into force on July 1, 2002.

Part 6: The Motive Fuel Tax Act

77(11)      Subsection 43(1) is retroactive and is deemed to have come into force on July 1, 2002.

77(12)       Section 45 is retroactive and is deemed to have come into force on April 23, 2002.

Part 8: The Retail Sales Tax Act

77(13)      Subsections 48(1) and (2) are retroactive and are deemed to have come into force on May 1, 2002, except that the definitions "tangible personal property" and "use", as enacted by clause 48(1)(c), come into force on October 1, 2002.

77(14)      Subsection 48(3) and section 54 come into force on October 1, 2002.

77(15)      Section 49 and subsection 51(2) are retroactive and are deemed to have come into force on June 1, 2002.

77(16)      Clause 51(1)(b) and subsection 51(5) are retroactive and are deemed to have come into force on June 30, 2002.

77(17)      Clause 51(1)(a) and section 58 are retroactive and are deemed to have come into force on May 1, 2002.

77(18)      Subsection 51(3) and sections 56 and 59 are retroactive and are deemed to have come into force on July 1, 2002.

77(19)      Sections 55 and 60 are retroactive and are deemed to have come into force on April 23, 2002.

Part 9: The Revenue Act

77(20)      Sections 63 and 64 are retroactive and are deemed to have come into force on July 1, 2002.

77(21)      Sections 66 to 69 are retroactive and are deemed to have come into force on April 23, 2002.

Part 10: The Tobacco Tax Act

77(22)      Sections 72 and 74 are retroactive and are deemed to have come into force on April 23, 2002.