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The Budget Implementation and Tax Statutes Amendment Act, 2006

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S.M. 2006, c. 24

Bill 42, 4th Session, 38th Legislature

The Budget Implementation and Tax Statutes Amendment Act, 2006

(Assented to June 13, 2006)

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

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

2           Section 6 is replaced with the following:

Tax payable

6(1)        A corporation with a permanent establishment in Manitoba — other than a corporation to which subsection (2) applies — must pay a tax for each fiscal year equal to

(a) if the fiscal year begins before January 2, 2007, the total of

(i) 0.3% of its amount taxable as at the close of the fiscal year, and

(ii) 0.2% of its amount taxable as at the close of the fiscal year in excess of $10,000,000.; or

(b) if the fiscal year begins after January 1, 2007,

(i) 0.3% of its amount taxable as at the close of the fiscal year, if the amount taxable does not exceed $10,000,000.,

(ii) $30,000. plus 2.5% of its amount taxable as at the close of the fiscal year in excess of $10,000,000., if the amount taxable exceeds $10,000,000. but does not exceed $11,000,000., or

(iii) 0.5% of its amount taxable as at the close of the fiscal year, if the amount taxable exceeds $11,000,000.

Tax payable by bank or trust or loan corporation

6(2)        A corporation that is a bank, a trust corporation, a loan corporation or a trust and loan corporation must pay a tax for each fiscal year equal to 3% of its amount taxable as at the close of the fiscal year.

3(1)        Clause 10.1(1)(b) is replaced with the following:

(b) in any other case,

(i) $5,000,000., if the fiscal year begins before January 2, 2007, or

(ii) $10,000,000., if the fiscal year begins after January 1, 2007.

3(2)        Subsection 10.1(3) is amended by striking out "$5,000,000." and substituting "the applicable amount under clause (1)(b)."

3(3)        Subsection 10.1(4) is amended by striking out "$5,000,000." and substituting "the applicable amount under clause (1)(b)".

4           Subsections 12(1) and (3) to (7) are repealed.

5           Subsections 14(1) and (3) to (7) are repealed.

6           Section 16 is amended by striking out everything after "under that clause".

7           Section 38 is repealed.

PART 2

THE ENVIRONMENT ACT

C.C.S.M. c. E125 amended

8           Clause 41(1)(cc) of The Environment Act is amended by adding "Class 1, Class 2 or" before "Class 3".

PART 3

THE FINANCIAL ADMINISTRATION ACT

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

9           The Financial Administration Act is amended by this Part.

10          Section 1 is amended

(a) by replacing the definition "appropriation" with the following:

"appropriation" means authority under this Act or any other Act of the Legislature to pay money out of the Consolidated Fund or to incur an expenditure; (« crédit »)

(b) by adding the following definitions:

"expenditure", in relation to a fiscal year, means an operating expense or capital expenditure for that year; (« dépense »)

"non-cash expense" means an operating expense that does not require an immediate or future payment of money from the Consolidated Fund, including

(a) the reduction of a prepaid expense,

(b) the amortization of a capital asset,

(c) a loss realized on the disposition or loss of a capital asset,

(d) a bad debt expense, and

(e) any other type of expense prescribed by regulation; (« dépense hors caisse »)

"operating expense", in relation to a fiscal year, means an amount that, according to the applicable accounting policies, is to be recorded as an operating expense of the government for the fiscal year; (« dépense de fonctionnement »)

11          Clause 9(c) is repealed.

12          Section 29 is renumbered as subsection 29(1) and the following is added as subsections 29(2) and (3):

Payment of amounts appropriated

29(2)       Money may be paid out of the Consolidated Fund

(a) as authorized by an appropriation; or

(b) to pay an expenditure that was incurred in accordance with an appropriation for a fiscal year.

Payment of expenditure incurred in prior year

29(3)       For greater certainty, an expenditure that was incurred in a fiscal year in accordance with an appropriation for that year and was charged to that appropriation may be paid out of the Consolidated Fund after the end of that fiscal year.

13          Section 29.1 and subsection 30(2.1) are repealed.

14(1)       Clause 32(1)(b) is amended by striking out "has been adjourned" and substituting "is adjourned indefinitely or".

14(2)       Subsection 32(3.1) is repealed.

14(3)       The following is added after subsection 32(4):

"Expenditure" defined

32(5)       In this section, "expenditure" includes a payment of money for the purpose of

(a) acquiring or developing inventory to be disposed of in a subsequent fiscal year; or

(b) reducing or eliminating a long-term liability that was accrued under section 66.

15          The section heading for section 34 is replaced with "Use of appropriation".

16          Clause 35(f) and sections 38 and 39 are repealed.

17          Section 42 is amended

(a) in the section heading, by striking out "Money" and substituting "Expenditures"; and

(b) in the part before clause (a), by striking out "Money appropriated in relation to an agreement with the Government of Canada may be expended" and substituting "An expenditure may be incurred in relation to an agreement with the Government of Canada".

18          The part of section 43 before clause (a) is amended by striking out "expend out of the Consolidated Fund" and substitute "incur expenditures".

19          Section 45 is replaced with the following:

Authority for commitments to future expenditures

45(1)        Subject to subsection (2), the government may during a fiscal year commit to expenditures for the public service of the government expected to be made or incurred in a later fiscal year.

Limit on expenditure commitments

45(2)       The total value of the expenditure commitments made under this section during a fiscal year must not exceed the limit prescribed for that year by an Appropriation Act.

Commitments to be reported

45(3)       The value of the expenditure commitments made under this section during a fiscal year must be reported in the public accounts for that year.

Commitments to be in main estimates

45(4)       The expenditures committed to under this section must be included in the main estimates of expenditure for the fiscal year in which the expenditures are to be made or incurred.

20          The part of subsection 61(1) before clause (a) is amended

(a) by striking out "the expenditure of money" and substituting "money to be paid out of the Consolidated Fund"; and

(b) by striking out "out of the Consolidated Fund".

21          Clause 64(1)(a) is amended by striking out "the expenditure of money" and substituting "money to be paid out of the Consolidated Fund".

PART 4

THE GASOLINE TAX ACT

C.C.S.M. c. G40

22          The Gasoline Tax Act is amended by this Part.

23          The definition "person" in section 1 is replaced with the following:

"person" includes a partnership, a trust and the Crown in right of Manitoba; (« personne »)

24          Clause 2.1(1)(f) is replaced with the following:

(f) for use only in a commercial logging operation in one or more of the following ways:

(i) operating an engine, other than a motor vehicle engine, in the course of harvesting, handling or processing forest products,

(ii) operating a motor vehicle engine for off-road transportation of forest products or waste material,

(iii) operating an engine in the construction or maintenance of a logging road;

25          Subsection 14(3) is repealed.

Unproclaimed provisions amended

26(1)       This section amends The Biofuels and Gasoline Tax Amendment Act, S.M. 2003, c. 5, (referred to as the "amending Act").

26(2)       Subsection 4(5) of The Gasoline Tax Act, as enacted by subsection 20(14) of the amending Act, is amended

(a) by replacing the section heading with "Importer's obligations"; and

(b) in clause (b), by striking out "keep records and".

26(3)       Subsection 20(23) of the amending Act is replaced with the following:

20(23)      The following is added after clause 39(1)(gg):

(hh) respecting the blending of denatured ethanol with gasoline.

PART 5

THE INCOME TAX ACT

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

27          The Income Tax Act is amended by this Part.

28          Subsection 4(1) is amended

(a) in clause (b) of Rule 1, by striking out "and" at the end of subclause (iv) and replacing subclause (v) with the following:

(v) under subsection 4.1(2.3) for the 2006 taxation year, and

(vi) under subsection 4.1(2.4) for the 2007 and subsequent taxation years.

(b) by repealing Rule 1.1;

(c) in Rule 4, by replacing clauses (b) and (c) with the following:

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

(c) the individual's tax reduction under subsection 4.10(2) for the year.

(d) by replacing Rule 6 with the following:

Rule 6

Multiply the total determined under Rule 5 by the individual's Manitoba percentage for the year.  If the Manitoba percentage is less than 100%, add the amount determined by the following formula:

Amount = (100% − Manitoba percentage) × T

In this formula, T is the total of the following amounts:

(a) 10.9% of the pension income amount claimed by the individual for the year under subsection 4.6(10);

(b) 10.9% of the amount claimed by the individual for the year under subsection 4.6(15.1) in respect of adoption costs;

(c) the individual's dividend tax credit for the year determined under section 4.7;

(d) the individual's overseas employment tax credit for the year determined under section 4.8.

(e) in Rule 7, by adding "the following amounts:" at the end of the part before clause (a), striking out "and" at the end of clause (f) and adding the following after clause (g):

(h) the amount, if any, deductible by the individual under subsection 10.2(1) (odour-control tax credit of farmer), as determined after deducting the amounts referred to in clauses (a) to (g) and before applying Rule 9;

(f) by replacing Rules 9 to 11 with the following:

Rule 9

Subtract the following amounts from the amount determined under Rule 8:

(a) the total of the individual's refundable tax credits claimed under section 5;

(b) the amount, if any, that the individual is deemed by subsection 10.1(1) (refundable co-operative education tax credit of employer) to have paid on account of his or her tax payable for the year;

(c) the amount, if any, that the individual is deemed by subsection 10.2(1.1) (refundable odour-control tax credit of farmer) to have paid on account of his or her tax payable for the year.

Rule 10

If the amount determined under Rule 9 is a positive amount, the individual's tax payable for the year under this Part is equal to that amount.

Rule 11

If the amount determined under Rule 9 is nil or a negative amount, the individual's tax payable for the year under this Part is nil and the amount, if any, by which it is negative is deemed to be an overpayment by the individual on account of his or her tax payable for the year under this Part.

29(1)       Subsection 4.1(2.3) is amended

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

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

29(2)       The following is added after subsection 4.1(2.3):

Basic tax payable — 2007 and subsequent taxation years

4.1(2.4)    An individual's basic tax payable for the 2007 taxation year and for each subsequent taxation year is the amount determined according to the following table:

Taxable income (TI) Basic tax payable (BT)
$30,544. or less BT = 10.9% × TI
more than $30,544. but not more than $65,000. BT = $3,329. + 13% × (TI - $30,544.)
more than $65,000. BT = $7,809. + 17.4% × (TI - $65,000.)

30          Section 4.2 and the centred heading immediately before it are repealed.

31(1)       Subsection 4.6(1) is repealed.

31(2)       Subsection 4.6(3) is amended by striking out "and" at the end of clause (a) and replacing clause (b) with the following:

(b) $7,734. for a taxation year ending in or at the end of 2006; and

(c) $7,834. for a taxation year ending after 2006.

31(3)       Subsection 4.6(13) is amended

(a) in clause (a), and in clause (b) of the description of C in the formula, by adding "and (15.1)" after "(3) to (12)"; and

(b) in clause (b) of the description of A in the formula, by striking out ".16" and substituting "the percentage specified in paragraph 117(2)(a) of the federal Act (lowest federal marginal rate)".

31(4)       The formula in subsection 4.6(14) is amended

(a) by striking out ".16" and substituting "P"; and

(b) by striking out "and" at the end of the description of A and adding the following after the description of B:

P

is the percentage specified in paragraph 117(2)(a) of the federal Act (lowest federal marginal rate).

31(5)       The formula in subsection 4.6(14.1) is amended in the clause (b) of the description of B by adding "and (15.1)" after "(3) to (13)".

31(6)       The following is added after subsection 4.6(15):

Adoption costs

4.6(15.1)   Subject to subsection (15.2), an individual who is entitled to deduct an amount under subsection 118.01(2) of the federal Act for a taxation year beginning after 2005 and is resident in Manitoba at the end of the taxation year may claim the amount that would be determined for B in the formula in that subsection if the amount in clause (a) of the description of B were "$10,000".

Apportionment of adoption costs

4.6(15.2)   If more than one individual is entitled to claim an amount under subsection (15.1) for a taxation year in respect of the adoption of a child, the total of all amounts claimed by them for the year must not exceed the maximum amount that could be claimed by one of them if this subsection did not apply.  If the individuals cannot agree as to what portion of the amount each will claim, the minister may fix the portions.

31(7)       Subsection 4.6(17) is amended by striking out everything after "formula:" and substituting the following:

A/P

In this formula,

A

is the amount that would be deductible by the individual under that subsection if

(a) it were computed with respect to the same medical expenses with respect to which the individual deducted an amount under that subsection,

(b) the amount determined for C in the formula were the lesser of $1,728. and 3% of the individual's income for the year, and

(c) in determining the amount for D in the formula, the amount determined for F were the lesser of $1,728. and 3% of the dependant's income for the year;

P

is the percentage specified in paragraph 117(2)(a) of the federal Act (lowest federal marginal rate).

31(8)       Subclause 4.6(20)(l)(i) is amended by adding ", (15.1)" after "(14)".

32          Subsection 4.7(1) is replaced with the following:

Dividend tax credit

4.7(1)      The dividend tax credit for a taxation year of an individual who was resident in Manitoba at the end of the year is as follows:

(a) for a taxation year ending after 2001 and before 2006, 25% of the dividend gross-up amount included in computing the individual's income for the year;

(b) for the 2006 and subsequent taxation years, the total of

(i) the following percentage of the total amount included in the individual's income for the year in respect of a taxable dividend for which the federal dividend gross-up rate is 25%:

(A) 4.87%, for the 2006 taxation year, or

(B) 3.67% for a taxation year ending after 2006, and

(ii) 11% of the total amount included in the individual's income for the year in respect of a taxable dividend for which the federal dividend gross-up rate is 45%.

33(1)       Subsections 4.10(1) and (4) are repealed.

33(2)       Subsection 4.10(3) is replaced with the following:

Limitation

4.10(3)     In determining the amounts that may be included in computing a reduction under subsection (2),

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

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

(c) if an individual becomes bankrupt in a calendar year, the total of the amounts that may be included under any provision of subsection (2) for the individual's taxation years ending in the calendar year shall not exceed the total of the amounts that would have been included under that provision for the calendar year if the individual had not become bankrupt; and

(d) the amount determined for C in the formula in subsection 4.6(16) shall be applied to reduce the amounts included in A and B in that formula in the same order in which those amounts must be deducted in computing the tax payable under this Act by the individual's spouse or common-law partner.

34          The part of subsection 4.11(2) before clause (a) is amended by adding "or (1.1)" after "subsection (1)".

35          The definition "family income" in section 5.3 is replaced with the following:

"family income" of an individual for a taxation year means

(a) the individual's income for the year plus, if the individual has a cohabiting spouse or common-law partner at the end of the year, the spouse's or common-law partner's income for the year, or

(b) where applicable, the amount that would be determined under clause (a) if no amount were included in respect of the universal child care benefit referred to in the budget documents tabled in the House of Commons on May 2, 2006; (« revenu familial »)

36(1)       Subsection 5.4(1) of the French version is amended by striking out "pour études" and substituting "pour l'éducation" in the section heading and in the part before clause (a).

36(2)       Subsection 5.4(2) of the French version is amended by striking out "pour études" and substituting "pour l'éducation" in the section heading and the part before clause (a).

36(3)       Subsection 5.4(3) of the French version is amended by striking out "pour études" and substituting "pour l'éducation" in the section heading and the part before the formula.

36(4)       Subsection 5.4(4) of the French version is amended by striking out "pour études" and substituting "pour l'éducation" in the section heading and in the subsection.

37          Clause 5.7(1)(d) is amended by striking out "18" and substituting "19".

38          The last four rows of the table in subsection 7(3) are replaced with the following:

calendar year 2006 14.5% 10%
calendar year after 2006 14% 11%

39(1)       Clause 7.2(1.1)(b) is replaced with the following:

(b) 35% of the total of the following amounts:

(i) the amount determined for the year under clause (a) of the definition "investment tax credit" in subsection (2),

(ii) the amount determined for the year under subsection (3),

(iii) the amount determined for the year under subsection (4).

39(2)       The following is added after subsection 7.2(1.1):

Transitional

7.2(1.2)    When applying clause (1.1)(b) to a taxation year ending after March 8, 2005, and before March 7, 2006, the reference to "35%" is to be read as "20%".

39(3)       The definition "qualified property" in subsection 7.2(2) is amended

(a) in the part before clause (a), by striking out "2006" and substituting "2009"; and

(b) in the part of clause (b) before subclause (i), by adding "or 43.2" after "Class 43.1".

39(4)        Subsection 7.2(2.1) is amended by adding "or 43.2" after "Class 43.1".

39(5)       Subsection 7.2(2.3) is repealed.

39(6)       The following is added after subsection 7.2(4):

Tiered partnerships

7.2(4.1)    For the purpose of subsection (4), a corporation that is a member of a partnership that is a member of another partnership is deemed to be a member of that other partnership.

40(1)       Subsection 7.3(2.1) is replaced with the following:

Transitional

7.3(2.1)    In applying the definition "research and development tax credit" in subsection (1) to a taxation year beginning before March 9, 2005, clause (b) is to be read without reference to the amendments made by subclause 35(1)(c)(ii) of The Budget Implementation and Tax Statutes Amendment Act, 2005, S.M. 2005, c. 40.

40(2)       The following is added after subsection 7.3(4):

Tiered partnerships

7.3(4.1)    For the purpose of subsection (4), a corporation that is a member of a partnership that is a member of another partnership is deemed to be a member of that other partnership.

41          The following is added after subsection 7.6(1):

Transitional

7.6(1.0.1)  In applying subsection (1) to an eligible film the principal photography for which began before March 9, 2005, the reference in the formula to ".45A" is to be read as ".35A".

42          Subsection 8(1) is amended

(a) in the formula in clause (a), by striking out "17%" and substituting "P"; and

(b) in the part after clause (b), by striking out "and" at the end of the description of D and adding the following after the description of E:

P

is the tax rate under subsection 7(3) for the period in which the taxation year falls or, if it falls in more than one period in that subsection, the total of the tax rates each of which is that proportion of the tax rate for a period in which a part of the taxation year falls that

(i) the number of days in the taxation year that fall in that period,

bears to

(ii) the number of days in the taxation year.

43          Section 10.1 and the centred heading before it are replaced with the following:

DIVISION III

SPECIAL CASES

Co-operative Education Tax Credit for Student Work Placements and Employment of Co-op Graduates

Refundable tax credit

10.1(1)     A taxpayer is deemed to have paid on his or her balance-due day for a taxation year, on account of his or her tax payable under this Act for the year, an amount equal to his or her co-operative education tax credit under subsection (2) for the taxation year.

Amount of co-operative education tax credit

10.1(2)     A taxpayer's co-operative education tax credit for a taxation year is the total of all amounts each of which is

(a) a tax credit of the taxpayer for the year, as determined under subsection (3), in respect of the salary or wages paid by the taxpayer for a qualifying work placement that ended in the taxation year and before 2009; or

(b) a tax credit of the taxpayer for the year, as determined under subsection (5), in respect of the salary or wages paid by the taxpayer for a period of qualifying employment of an individual who becomes a qualifying graduate after March 6, 2006, and before 2009.

Credit for qualifying work placement

10.1(3)     Subject to subsection (4), the tax credit of a taxpayer for a taxation year in respect of a qualifying work placement is the amount determined by the following formula:

tax credit = W × A/B

In this formula,

W

is the lesser of

(a) $1,000., and

(b) 10% of the amount by which

(i) the total salary and wages paid to the employee under that work placement for work performed primarily in Manitoba

exceeds

(ii) the amount of any other government assistance received or receivable by the taxpayer in respect of the work placement or the salary and wages;

A

is the total salary and wages paid by the taxpayer for the work placement or, if they were paid by a partnership in which the taxpayer is a general partner, the taxpayer's pro rata share of the salary and wages so paid by the partnership;

B

is the total salary and wages paid for the work placement.

Restrictions

10.1(4)     The tax credit under subsection (3) in respect of a work placement is nil if

(a) the taxpayer fails to file with his or her return for the taxation year a statement under subsection (7) certifying the work placement to be a qualifying word placement; or

(b) the work placement is for an individual who already has five previous qualifying work placements, unless the credit for the work placement is approved by the minister.

Credit for employment of co-op graduate

10.1(5)     Subject to subsection (6), the tax credit of a taxpayer for a taxation year in respect of a period of employment of a qualifying graduate is the amount determined by the following formula:

tax credit = W × A/B

In this formula,

W

is the lesser of

(a) $2,500., and

(b) 5% of the amount by which

(i) the total salary and wages paid to the qualifying graduate for a 12-month period of qualifying employment that ended in the taxation year,

exceeds

(ii) the amount of any other government assistance received or receivable by the taxpayer in respect of the salary and wages paid to the graduate for that period;

A

is the total salary and wages paid by the taxpayer for the period of qualifying employment or, if they were paid by a partnership in which the taxpayer is a general partner, the taxpayer's pro rata share of the salary and wages so paid by the partnership;

B

is the total salary and wages paid for the period of qualifying employment.

Restrictions

10.1(6)     The tax credit under subsection (5) in respect of a period of employment of an individual is nil if

(a) the taxpayer fails to file with his or her return for the taxation year a statement under subsection (7) certifying the period of employment to be a period of qualifying employment and the individual to be a qualifying graduate; or

(b) the period of employment relates to an individual who already has two 12-month periods of qualifying employment, unless the credit for the employment is approved by the minister.

Minister may issue statement

10.1(7)     The Minister of Finance for Manitoba or a person authorized by him or her for the purpose may issue to a taxpayer, upon application in accordance with the regulations, a statement certifying

(a) a work placement to be a qualifying work placement; or

(b) a period of employment of an individual to be a period of qualifying employment and an individual to be a qualifying graduate.

Regulations

10.1(8)     The Lieutenant Governor in Council may make regulations

(a) defining "period of qualifying employment", "qualifying work placement" and "qualifying graduate";

(b) respecting statements to be issued under subsection (7), and applications for such statements;

(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 co-operative education tax credit under this section;

(d) establishing a process to enable a taxpayer who is exempt from tax under this Act to apply for and obtain a refund of the amount that the taxpayer is deemed by subsection (1) to have paid on account of tax under this Act;

(e) respecting any other matter that the Lieutenant Governor in Council considers necessary to carry out the intent and purpose of this section.

Unused credit

10.1(9)     A corporation may carry forward its unused co-operative education tax credit under subsection (1), as that subsection read before the coming into force of this subsection, for a taxation year that ended before this subsection came into force, and deduct the unused portion of that credit from its tax otherwise payable for any of the immediately following 10 taxation years.

Amalgamation

10.1(10)    For the purpose of determining the amount that a corporation formed by an amalgamation to which subsection 87(1) of the federal Act applies

(a) may deduct under subsection (9); or

(b) is deemed by subsection (1) to have paid on account of its tax payable;

the corporation is deemed to be the same corporation as, and a continuation of, each of its predecessor corporations.

Winding-up

10.1(11)    For the purpose of determining the amount that a corporation

(a) may deduct under subsection (9); or

(b) is deemed by subsection (1) to have paid on account of its tax payable;

for a taxation year ending after a winding-up of its subsidiary to which subsection 88(1) of the federal Act applies, the corporation is deemed to be the same corporation as, and a continuation of, the subsidiary.

44(1)       Subsection 10.2(1) is replaced with the following:

Odour-control tax credit

10.2(1)     An eligible taxpayer may deduct from his or her tax otherwise payable under this Act for a taxation year an amount not exceeding the lesser of

(a) the taxpayer's odour-control tax credit at the end of the year; and

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

Credit refundable if it relates to farming

10.2(1.1)   An eligible taxpayer who is carrying on the business of farming is deemed to have paid on his or her balance-due day, on account of his or her tax payable under this Act for a taxation year, the amount equal to the lesser of

(a) the amount, if any, by which the taxpayer's odour-control tax credit at the end of the year exceeds the amount that the taxpayer may deduct under subsection (1) for that year; and

(b) the property tax paid, for the calendar year that ended in that taxation year, on Manitoba farmland used by the taxpayer in the business of farming, net of any property tax refund, rebate or other government assistance received or receivable in respect of that property tax.

44(2)       Subsection 10.2(2) is amended

(a) by adding the following definitions:

"business entity" means a farmer or a corporation, partnership or trust; (« entreprise »)

"eligible taxpayer" means a corporation or a farmer. (« contribuable admissible »)

"farmer" means an individual who is carrying on the business of farming as a sole proprietor or as a general partner in a partnership that is carrying on the business of farming. (« agriculteur »)

(b) in the definition "eligible expenditure",

(i) by striking out "corporation, partnership or trust" in the part before clause (a) and in clause (d) and substituting "business entity",

(ii) in clause (b), by striking out "before 2007 primarily for the purpose of preventing, reducing or eliminating" and substituting "before 2010 for the purpose of preventing, eliminating or significantly reducing", and

(iii) in clause (c), by striking out "2007" and substituting "2010"; and

(c) in the definition "odour-control tax credit"

(i) in the part before clause (a), by striking out "a corporation" and substituting "an eligible taxpayer",

(ii) in clauses (a) and (b), by striking out "corporation" and substituting "taxpayer",

(iii) in the part after clause (a), by adding "the total of" after "exceeds", and

(iv) by adding "and" at the end of clause (b) and adding the following after clause (b):

(c) the total of all amounts deemed by subsection (1.1) to have been paid by the taxpayer on account of tax payable for a preceding taxation year in respect of an eligible expenditure of the taxpayer for any of the 10 immediately preceding taxation years or the two immediately following taxation years.

44(3)       Subsection 10.2(2.1) is amended by striking out "and" at the end of clause (a) and adding the following after clause (b):

(c) no amount shall be included in respect of an acquisition of property by a farmer unless the property is acquired for use in his or her farming business; and

(d) for the purpose of subsection (1.1), no amount shall be included in respect of an acquisition of property that was not acquired for use in the taxpayer's farming business.

44(4)       Subsections 10.2(3) to (5) are replaced with the following:

Minister may issue certificate

10.2(3)     The minister may issue a certificate to a business entity declaring a property to be a qualifying property for the purpose of this section if the entity satisfies the minister that the property

(a) is capable of being used, and is being or will be used, by it for the purpose of preventing, eliminating or significantly reducing odour that arises — or without the use of the property would arise — from organic waste used or created in the course of its business in Manitoba; and

(b) is being or will be used by it in a process that involves

(i) aerobic treatment,

(ii) composting,

(iii) drying or dehydration, or

(iv) fermentation,

of organic waste.

Trust or partnership

10.2(4)     For the purpose of this section, an eligible taxpayer who was a beneficiary or partner of a business entity at the end of a taxation year of the entity that ended in the taxation year of the taxpayer may include, as an eligible expenditure of the taxpayer for the taxpayer's taxation year, the taxpayer's proportionate share of an eligible expenditure of the entity for its taxation year.

Proportionate share

10.2(5)     For the purpose of subsection (4), an eligible taxpayer's proportionate share of an eligible expenditure of a business entity for a taxation year of the entity is the proportion of the expenditure that the fair market value of the taxpayer's interest in the entity at the end of that taxation year is of the total fair market value at that time of all the interests in the entity, determined without regard to any premium or discount that applies to a majority or minority interest.

Tiered partnerships

10.2(5.1)   For the purpose of subsection (4), a person who is a member of a partnership that is a member of another partnership is deemed to be a member of that other partnership.

44(5)       Subsections 10.2(6) and (7) are amended by adding "or is deemed by subsection (1.1) to have paid on account of tax" after "subsection (1)".

45(1)       The Division heading after section 10.2 is repealed.

45(2)       Subsection 11.1(2.1) is replaced with the following:

Labour-sponsored funds tax credit

11.1(2.1)   Subject to subsection (3), there may be deducted from the tax otherwise payable under this Act by an individual (other than a trust) for a taxation year an amount not exceeding the lesser of

(a) $1,800.; and

(b) the total of the following amounts:

(i) the lesser of $750. 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 in the taxation year or in the first 60 days of the following year of an approved share of a corporation that was registered under The Labour-Sponsored Venture Capital Corporations Act before July 1, 2006,

B

is the portion of the amount determined for A that was deducted under this subsection for the preceding taxation year; and

(ii) the amount determined by the following formula:

C − D

In this formula,

C

is the total of all amounts each of which is the individual's labour-sponsored funds tax credit in respect of the original acquisition in the taxation year or in the first 60 days of the following year of an approved share of a corporation that was first registered under The Labour-Sponsored Venture Capital Corporations Act after June 30, 2006,

D

is the portion of the amount determined for C that was deducted under this subsection for the preceding taxation year.

45(3)       Subsection 11.1(5) is replaced with the following:

Limitation on amount designated

11.1(5)     The total of the amounts designated under subsection (4) by a corporation for a taxation year in respect of approved shares purchased or subscribed for by an individual and a qualifying trust for the individual must not exceed

(a) $5,000., if the corporation was registered under The Labour-Sponsored Venture Capital Corporations Act before July 1, 2006; or

(b) $12,000., if the corporation was first registered under The Labour-Sponsored Venture Capital Corporations Act after June 30, 2006.

S.M. 2005, c. 40 amended

46          Subsection 136(5) of The Budget Implementation and Tax Statutes Amendment Act, 2005, S.M. 2005, c. 40, is amended by striking out "Section 26 is" and substituting "Section 26 and subsection 31(2) are".

PART 6

THE MINING TAX ACT

C.C.S.M. c. M195

47          The Mining Tax Act is amended by this Part.

48          Subsection 1(1) is amended

(a) by replacing the definition "operator" with the following:

"operator", in relation to a mineral processing establishment, means

(a) the owner, lessee, tenant, holder or other occupier of the depreciable assets that constitute or form part of the mineral processing establishment, and

(b) a trustee in bankruptcy, assignee, liquidator, receiver, receiver-manager, administrator or other person administering, managing, winding-up, controlling or otherwise dealing with the property or business of an operator described in clause (a);

but does not include a person who does not participate in the actual operation of the mineral processing establishment if

(c) the person merely receives a royalty or rent from a person who actually operates and manages the mineral processing establishment,

(d) the person owns the mineral processing establishment, or a part of it, and the establishment is the subject of a lease, grant or licence to another person for the actual operation of it, or

(e) the person owns merely the soil or surface rights of land and has no right or title to the mines or minerals on or under the land; (« exploitant »)

(b) by adding the following definition:

"person" includes a partnership, a trust and the Crown in right of Manitoba; (« personne »)

49          Clause 2(b) is amended by striking out "50 miles" and substituting "80 kilometres".

50          Subsection 22(1) is amended by striking out everything after "director" and substituting "an information return, in a form approved by the director, setting out all the information required by the form."

PART 7

THE MOTIVE FUEL TAX ACT

C.C.S.M. c. M220

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

52          The definition "person" in section 1 is replaced with the following:

"person" includes a partnership, a trust and the Crown in right of Manitoba; (« personne »)

53(1)       Clause 2.1(2)(e) is replaced with the following:

(e) for use only in a commercial logging operation in one or more of the following ways:

(i) operating an engine, other than a motor vehicle engine, in the course of harvesting, handling or processing forest products,

(ii) operating a motor vehicle engine for off-road transportation of forest products or waste material,

(iii) operating an engine in the construction or maintenance of a logging road;

53(2)       The following is added after subsection 2.1(6):

Exemption for 1-K Kerosine

2.1(7)      1-K Kerosine may be purchased exempt from tax and without a permit.

54          Subsection 15(3) is repealed.

PART 8

THE PROPERTY TAX AND

INSULATION ASSISTANCE ACT

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

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

56(1)       Section 16.1 is amended by adding the following definition:

"applicable percentage" means

(a) in relation to the 2005 taxation year, 50%; and

(b) in relation to the 2006 or a subsequent taxation year, 60%. (« pourcentage applicable »)

56(2)       Section 16.1 is renumbered as subsection 16.1(1) and the following is added as subsections 16.1(2) and (3):

Assignment of rebate to tenant

16.1(2)     A taxpayer may assign his or her entitlement to a rebate under this Part for a taxation year to a tenant of the land in respect of which the rebate is payable.  The assignment must be in a form approved by the minister and must be filed with the application for the rebate.

Assignee deemed to be taxpayer

16.1(3)     The tenant to whom an entitlement to a rebate for a taxation year has been assigned in accordance with subsection (2) is deemed, for the purposes of this Part other than subsection (2), to be the taxpayer in relation to that land for that year instead of the person who made the assignment.

57          Subsection 16.2(1) is amended

(a) in the section heading, by striking out "of 50%"; and

(b) in the part before clause (a) by striking out "50%" and substituting "the applicable percentage".

58          Section 16.5 is amended in the part before clause (a) by striking out "50%" and substituting "the applicable percentage".

59          Section 26 is amended

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

(i) respecting applications under Part III;

(b) by repealing clause (j);

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

(k) prescribing qualifications for pensioner tenants for the purpose of Part III;

(d) by repealing clause (l); and

(e) in clause (m), by striking out "sections 12 and 16" and substituting "section 16".

PART 9

THE PUBLIC SCHOOLS ACT

C.C.S.M. c. P250 amended

60          The Public Schools Act is amended by this Part.

61          Section 171 is amended

(a) by repealing the definitions "education farm and residential assessment", "education other assessment", "education total school assessment", "farm and residential assessment", "other assessment" and "other property"; and

(b) by replacing the definition "education support levy" with the following:

"education support levy" means a levy imposed under section 184 by the council of a municipality to raise a part of the annual revenues of the finance board; (« taxe d'aide à l'éducation »)

62(1)       Subsection 181(1) is amended by striking out everything after "fiscal year," and substituting "and the difference between those amounts shall be raised by education support levies imposed on assessable property other than farm and residential property."

62(2)       Subsections 181(2) and (3) are repealed.

63          Sections 182 to 184 are replaced with the following:

Amount to be raised by municipality

182         Subject to subsection 191(6), the amount to be raised by a municipality each year by an education support levy is the amount calculated by the finance board according to the following formula:

Amount = T × SM/ST

In this formula,

T

is the total amount that, according to subsection 181(1), must be raised for that year by education support levies;

SM

is the portion of the municipality's total school assessment for the year that is attributable to assessable property other than farm and residential property, based on the latest assessment information obtained by the finance board before March 15 of that year;

ST

is the total of the amounts determined for SM for the year for all municipalities.

Statement to municipalities

183         On or before March 15 of each year, the finance board must send to each municipality a statement setting out the amount to be raised by the municipality for that year by an education support levy, as calculated under section 182 and adjusted, if required, under subsection 191(6).

Council to impose education support levy

184         Upon receiving the statement referred to in section 183, the council of a municipality must set the mill rate and impose a levy on assessable property in the municipality, other than farm and residential property, sufficient to raise the amount specified in the statement.

64          Subsection 185(1) is replaced with the following:

Remittance of education support levy

185(1)      Each year, a municipality must remit to the finance board, at the time and in the manner prescribed by regulation, the amount specified in the statement under section 183 as the amount to be raised by the municipality that year on assessable property other than farm and residential property.

65          Subsection 191(6) is amended by striking out "apportionment" wherever it occurs in the section heading and in the subsection and substituting "calculation".

PART 10

THE RETAIL SALES TAX ACT

C.C.S.M. c. R130

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

67(1)       Subsection 1(1) is amended

(a) by repealing the definitions "collector", "deputy collector" and "designated item";

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

"person" includes a partnership, a trust and the Crown in right of Manitoba; (« personne »)

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

(e) is a direct seller or distributor authorized to use the alternate collection method described in section 21.

67(2)       Subsection 1(1.1) is repealed.

68(1)       The following is added after subsection 2(1):

Reduced rate on mobile, modular or ready-to-move home

2(1.1)      Despite subsection (1), the tax payable on the purchase of a mobile home, modular home or ready-to-move home purchased for use by the purchaser as a domestic residence in Manitoba is

(a) 4% of the fair value of the home, excluding the fair value of any appliances, free-standing furniture or draperies purchased with the home; and

(b) 7% of the fair value of any appliances, free-standing furniture or draperies purchased with the home.

68(2)       Subsection 2(5.3) is amended in the part before clause (a) by striking out "and railway rolling stock to which subsection (5.4) applies" and substituting "railway rolling stock or an aircraft".

68(3)       The following is added after subsection 2(5.6):

Temporary use — aircraft

2(5.7)      A purchaser of an aircraft who establishes to the satisfaction of the minister that the aircraft is used for business purposes both inside and outside Manitoba may, instead of paying tax under subsection (1) on the fair value of the aircraft when it is purchased or brought into Manitoba, pay tax in respect of the aircraft and any related repair parts, additions and improvements in one of the following ways:

(a) pay tax calculated in accordance with a formula that is acceptable to the director and takes into account the estimated proportion of the aircraft's flight time that will be spent flying in Manitoba; or

(b) pay tax, for each calendar month in which the aircraft is temporarily used or situated in Manitoba, equal to 7% of the taxable value determined by the following formula:

taxable value = V × F

In this formula,

V

is

(i) in the case of an aircraft owned by the purchaser, 1/36 of the fair value of the aircraft, including any related repair parts, additions and improvements, or

(ii) in the case of an aircraft leased to the purchaser, the amount of the monthly lease or rental payments or, if they are not payable monthly, the monthly equivalent of the those payments, plus the fair value of any related repair parts, additions and improvements paid for by the purchaser in addition to the lease or rental payments;

F

is a fraction

(i) the numerator of which is the number of hours that the aircraft was flown in Manitoba that month on trips that originated or ended in Manitoba or included a stopover in Manitoba for any purpose other than or in addition to refuelling, and

(ii) the denominator of which is the total number of hours that the aircraft was flown that month,

unless the aircraft was not flown in that month, in which case F is 1.

Tax payable under clause (a) or (b) must be remitted in accordance with the regulations.

68(4)       Subsections 2(12), (13) and (15) are repealed.

69          The definition "motor vehicle" in subsection 2.2(1) is amended by striking out "The Highway Traffic Act" and substituting "The Drivers and Vehicles Act".

70(1)       Subsections 2.3(2.1) and (2.2) are repealed.

70(2)       The following is added after subsection 2.3(9):

Recovery of amount paid under subsection (9)

2.3(9.1)    A person who pays an amount as tax under subsection (9) on behalf of another person who is liable, otherwise than because of that subsection, to pay the tax is entitled to recover that amount in a court of competent jurisdiction as a debt owing to him or her by the other person.

71          The following is added after section 2.3:

Definitions

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

"non-returnable packaging" means packaging that is not customarily returned for re-use as packaging. (« emballage à usage unique »)

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

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

Tax on returnable packaging

2.4(2)      Tax under section 2 on a purchase of returnable packaging

(a) is payable by the person who purchases it for providing tangible personal property or a service to a purchaser; and

(b) is not payable by the purchaser to whom the property or service is provided, even if the purchaser must pay a deposit against the return of the packaging or is allowed a credit upon its return.

Tax on non-returnable packaging

2.4(3)      Tax is payable under section 2 on the purchase of non-returnable packaging by a vendor unless

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

(b) the vendor's RST number is provided to the supplier of the packaging.

Use of returnable packaging inside and outside Manitoba

2.4(4)      A vendor who purchases returnable packaging for use both inside and outside Manitoba may, instead of paying tax under section 2,

(a) provide his or her RST number to the supplier of the packaging; and

(b) for each reporting period, remit in accordance with the regulations the tax calculated in accordance with a formula that is acceptable to the director and takes into account the extent to which the packaging is used inside and outside Manitoba.

No tax on labels, etc.

2.4(5)      No tax is payable by a vendor on the purchase of a label, name plate, price tag or shipping tag to be affixed to

(a) non-returnable packaging or to the property to be sold; or

(b) returnable packaging, if it is necessary to affix a new label, name plate or price or shipping tag when the packaging is re-used.

72(1)       Subsection 3(1) is amended

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

(o.1) a granary designed and used exclusively for the storage of grain, when purchased by a farmer;

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

(r) books;

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

(t.1) a commemorative coin that, in the minister's opinion, is being used as currency in a specified geographic area and is sold at a price not exceeding the face value stated on the coin;

(d) by replacing clause (w) with the following:

(w) a catalyst or direct agent;

(w.1) the following items when purchased for use in manufacturing a product for sale:

(i) a carbon electrode,

(ii) a coolant or oil or other lubricant, if used as a cutting aid,

(iii) a die, jig, mould or pattern,

(iv) a spray, dressing or release agent for a mould, including a silicon release agent for baking,

(v) items consumed directly and exclusively in manufacturing printed materials, including items impressed with, carrying or displaying an image to be reproduced on printed materials, but not including machinery or equipment;

(e) in clause (y) of the French version, by striking out "effets des colons" and substituting "effets d'immigrants";

(f) by replacing clause (bb) with the following:

(bb) used furniture and other household items having a fair value of $100. or less;

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

(vv) the following diabetic supplies:

(i) hypodermic needles and syringes, insulin infusion pumps and carrying pouches designed solely for these devices,

(ii) lancets and lancing devices,

(iii) blood glucose monitors and meters, including control solutions and replacement batteries designed solely for these devices;

(h) by replacing clause (ww) with the following:

(ww) self-administered blood-sugar, blood ketone, urinary-sugar and urinary-ketone testing strips, reagents and tablets;

(i) by adding the following after clause (yy):

(zz) sand or gravel, when purchased directly by a municipality or local government district for its own use;

(aaa) biofuel produced in Manitoba that meets the American Society for Testing and Materials International D-6751 Standard, if it is purchased before April 1, 2011.

72(2)       Subsection 3(4) is amended by adding "or used solely for heating" at the end.

72(3)       Subsections 3(6), (6.1) and (9) are repealed.

72(4)       Subsection 3(10) is replaced with the following:

Exemption for private purchases

3(10)        Despite section 2, no tax is payable on a purchase of used property by an individual from another individual where, in the minister's opinion, the purchase is not a commercial transaction, unless the property is

(a) an aircraft; or

(b) a vehicle that is required to be registered under The Drivers and Vehicles Act.

72(5)       Subsections 3(20) and (21) are repealed.

72(6)       Subsection 3(22) is replaced with the following:

Exemption: sale of machinery, etc. as part of manufacturing plant

3(22)       Despite section 2, no tax is payable in respect of machinery, equipment or apparatus attached to land or buildings sold or leased as a manufacturing plant if

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

(b) the tax was previously paid under section 2 on the fair value of the machinery, equipment or apparatus.

Exemption: sale of tangible personal property as part of real property

3(22.1)     Despite section 2, when the following items are included as part of a sale or lease of land and buildings, no tax is payable on those items if tax was previously paid under section 2 on their fair value:

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

(b) the devices attaching the systems or components referred to in clause (a) to the land or buildings.

72(7)       The part of subsection 3(24) before clause (a) is amended by striking out "and subsection (9)".

72(8)       Subsection 3(25) is replaced with the following:

Purchaser's statement re aircraft

3(25)       When a person purchases an aircraft or parts referred to in subsection (24), or services mentioned in clause 4(1)(d) in respect of such an aircraft, the person must provide the seller with a signed statement certifying that the aircraft and its use meet the conditions in clauses (24)(a) and (b).

72(9)       The following is added after subsection 3(30):

Exemption for equipment for oil and gas exploration or development

3(30.1)     Despite section 2, no tax is payable under this Act in respect of the purchase of

(a) geophysical survey or exploration equipment; or

(b) a drilling or well-servicing rig;

that is designed and used solely for oil or gas exploration or development or for servicing oil or gas wells.

73          Section 21 is replaced with the following:

Definitions

21(1)       The following definitions apply in this section.

"alternate collection method" means the method by which a direct seller or distributor, as authorized by the director, remits to the minister for each reporting period an amount on account of the tax payable by retail purchasers of the direct seller's or distributor's products. (« autre mode de perception »)

"direct seller" means a person who sells his or her products to independent sales contractors. (« démarcheur »)

"distributor" of a direct seller means an independent sales contractor who, in the course of his or her business, sells some or all of the products purchased by him or her from the direct seller to other independent sales contractors of the direct seller. (« distributeur »)

"independent sales contractor" of a direct seller means a person, other than an agent or employee of the direct seller or of a distributor of the direct seller, who

(a) has a right to purchase the direct seller's products from the direct seller or from a distributor of the direct seller;

(b) purchases the products for resale to other independent sales contractors of the direct seller or to purchasers; and

(c) does not sell or offer to sell the products to purchasers primarily at or from a fixed place of business other than his or her private residence. (« entrepreneur indépendant »)

Application to use alternate collection method

21(2)       A direct seller or a distributor may apply to the director for authorization to use the alternate collection method.

Director may authorize alternate collection method

21(3)       The director may, by written notice to the applicant, authorize him or her to use the alternate collection method.  The authorization may include any terms or conditions the director considers appropriate.

Director may revoke approval

21(4)        If a person authorized to use the alternate collection method fails to comply with the authorization, the director may revoke the authorization by written notice to the person.  The revocation takes effect when the notice is served on the person or at any later time specified in the notice.

Independent sales contractor not required to be registered or to remit tax

21(5)       If a direct seller or distributor has remitted, in accordance with the alternate collection method, the amount to be remitted on account of the tax payable on products sold by him or her to an independent sales contractor, the independent sales contractor is not required to

(a) be registered as a vendor; or

(b) remit any tax payable on the products.

74          Subsection 26(3) is amended by adding "and" at the end of clause (a), striking out "and" at the end of clause (b) and repealing clause (c).

S.M. 2005, c. 40 amended

75          Clause 73(1)(c) of the French version of The Budget Implementation and Tax Statutes Amendment Act, 2005, S.M. 2005, c. 40, is amended by striking out "juillet 1999" and substituting "avril 1999".

PART 11

THE TAX ADMINISTRATION AND

MISCELLANEOUS TAXES ACT

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

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

77(1)       The definition "person" in subsection 1(1) is amended by adding ", a trust and the Crown in right of Manitoba" at the end.

77(2)       The following is added after subsection 1(4):

Interpretation of tax Acts

1(5)        For greater certainty, the tax Acts must be interpreted so as not to derogate from the exemption from taxation of property under subsection 87(1) or (2) of the Indian Act (Canada).

78          The following is added after subsection 25(3):

Operator to provide proof of identity

25(4)       The operator of a vehicle stopped under subsection (2) or (3) must produce for inspection by the tax officer, upon request, his or her driver's licence or any other proof of identity acceptable to the officer.

79          The following is added after section 31;

Operator to provide proof of identity

31.1        The operator of a vehicle stopped under section 30 or subsection 31(2) must produce for inspection by the tax officer, upon request, his or her driver's licence or any other proof of identity acceptable to the officer.

80          Subsection 36(1) is amended by striking out "20" and substituting "five".

81          The following is added after section 43:

Non-director functioning as corporate director

43.1(1)     If the director has reason to believe that a person performed some or all of the functions of a director of a corporation, the director may, by written notice, request the person and the corporation to provide the records and information required by the director to confirm or rebut that belief.

Decision of director

43.1(2)     Subject to subsection (3), the director may decide that a person performed some or all of the functions of a director of a corporation if

(a) the person or the corporation that has been requested to provide records or information to the director under subsection (1) fails or refuses to comply with the request within 30 days after being served with the request; or

(b) the records or information provided to the director under this section confirm that the person performed some or all of the functions of a director of the corporation.

Restrictions on director's decision

43.1(3)     A decision under clause (2)(b) that a person performed some or all of the functions of a director of the corporation must not be based solely on

(a) the person's participating in the corporation's management under the direction or control of a shareholder, one or more directors or a senior officer of the corporation;

(b) the person's being a lawyer, accountant or other professional whose primary participation in the management of the corporation was the provision of professional services to the corporation;

(c) the corporation's being bankrupt and the person being a trustee in bankruptcy who participates in the management of the corporation or exercises control over its property, rights and interests primarily for the purposes of the administration of the bankrupt's estate; or

(d) the person's being a receiver, receiver manager or secured creditor who participates in the management of the corporation or exercises control over any of its property, rights and interests primarily for the purposes of enforcing a debt obligation of the corporation.

Deemed director

43.1(4)     If the director decides under subsection (2) that a person performed some or all of the functions of a director of a corporation, the person is deemed to be a director of the corporation for the purposes of this Part for the period during which he or she performed those functions.

Notice of decision

43.1(5)     Immediately after making a decision under subsection (2), the director must serve a written notice of the decision on the corporation and the person to whom the decision relates.

82          The definition "tax debt" in subsection 45(1) is repealed.

83          The part of subsection 53(2) before clause (a) is replaced with the following:

Refund of overpayment by collector

53(2)       Subject to the provisions of a tax Act, a collector or deputy collector is entitled to a refund, without interest, of an amount remitted by him or her to the minister as or on account of tax if

84          The following is added after clause 65(1)(b):

(b.1) the name of the tax Act under which the tax debt arose;

85          Subsection 77(1) is amended

(a) by repealing clause (f); and

(b) by adding "or" at the end of clause (g) and adding the following after clause (g):

(h) blends motive fuel with any petroleum product that is not subject to tax under The Motive Fuel Tax Act on resale, and sells the resulting product as motive fuel contrary to the provisions of that Act.

86          Clause 79(1)(b) of the French version is amended by striking out "n'a pas été importé dans la province ni acquis auprès" and substituting "a été importé dans la province ou acquis autrement qu'auprès".

87(1)       Subsection 80(2) is amended

(a) in the section heading, by adding ", purchase" after "possession";

(b) by repealing clauses (b) and (e); and

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

(f) is in possession of tobacco contrary to section 3.7 or subsection 4(1) or (2) of The Tobacco Tax Act;

(g) sells or offers to sell tobacco contrary to subsection 4(3) or (5) of The Tobacco Tax Act; or

(h) purchases or offers to purchase tobacco contrary to subsection 4(4.1) of The Tobacco Tax Act.

87(2)       Clause 80(4)(b) of the English version is amended by adding ", purchase" after "possession".

87(3)       Subsection 80(7) is repealed.

88          The following is added after section 95 as part of Part I:

DIVISION 9

ADMINISTRATION AND ENFORCEMENT

OF BAND TAXES

Definitions

95.1(1)     The following definitions apply in this section.

"band" and "reserve" have the same meaning as in the Indian Act (Canada). (« bande » et « réserve »)

"band law" means a band council by-law that

(a) was made under the authority of the First Nations Goods and Services Tax Act (Canada); and

(b) imposes a tax on a purchase of goods or services on a reserve that, in the opinion of the minister, is the same as or substantially similar to a tax imposed under a tax Act. (« texte législatif de bande »)

"tax administration agreement" means an agreement between a band council and the government respecting the administration and enforcement of a band law and the collection of tax under that law. (« accord d'administration fiscale »)

Minister may enter into tax administration agreement

95.1(2)     The minister may enter into a tax administration agreement with a band council if the minister is satisfied that

(a) the agreement authorizes the director, as agent for the band, to collect the tax imposed by a band law; and

(b) the band law applies the provisions of Divisions 1 to 7 to the administration and enforcement of the band law, with such changes as are necessary or acceptable to the minister.

Agreement may provide for commission or fee

95.1(3)     A tax administration agreement may provide for a commission, fee or charge to be paid to the government for the tax administration and enforcement services it provides under the agreement.

Band tax to be paid into Consolidated Fund

95.1(4)     Despite The Financial Administration Act, amounts collected by the director as or on account of a tax imposed by a band law must be paid into the Consolidated Fund.

Payments to band

95.1(5)     The amounts payable to a band under a tax administration agreement may be paid out of the Consolidated Fund without any legislative authority other than this section.

Exemption to prevent double taxation

95.1(6)     While a tax administration agreement is in effect in relation to a band law, an amount that would, but for this subsection, be payable or deemed to have been collected as or on account of tax under a tax Act is deemed not to be payable and not to have been collected under that Act to the extent that it is payable or is deemed to have been collected, as the case may be, as or on account of the tax imposed by the band law.

Confidentiality of information

95.1(7)     Subject to subsection (8), section 6 applies, with necessary changes,

(a) to a person employed in the administration or enforcement of a band law under a tax administration agreement; and

(b) to any information obtained under a tax administration agreement or under the band law.

Disclosure of information with band council

95.1(8)     Information referred to in clause (7)(b) may be disclosed to the band council in accordance with the tax administration agreement entered into with the band council.

89          The definition "person" in section 96 is amended by adding ", a trust and the Crown in right of Manitoba" at the end.

90          Subsection 99(1) is amended

(a) in clause (b), by adding "or cooling" after "heating"; and

(b) in clause (c), by striking out "operating a grain dryer" and substituting "producing heat by means of a grain dryer".

91          Section 100 is replaced with the following:

Qualifying manufacturer

100(1)      For the purposes of this section, a person is a qualifying manufacturer at any particular time if he or she is carrying on a manufacturing business in Manitoba at that time and meets the following conditions in relation to the last fiscal year that ended before that time:

(a) the total of

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

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

is more than 50% of the total of

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

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

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

How to determine costs

100(2)      The costs referred to in clause (1)(a) are to be determined in accordance with section 5202 of the Income Tax Regulations (Canada), with the following changes:

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

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

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

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

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

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

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

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

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

(i) scientific research and experimental development,

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

Rate reduction for mining and manufacturing

100(3)      With the approval of the minister, the tax otherwise payable on electricity purchased by a qualifying manufacturer from a dealer and used by the qualifying manufacturer for operating manufacturing machinery or equipment may be reduced by 80%.

"Manufacturing machinery or equipment" defined

100(4)      For the purpose of subsections (3) and (8), "manufacturing machinery or equipment" means machinery or equipment the cost of which is included in the manufacturer's cost of manufacturing and processing capital under clause (1)(a).

Minister may approve tax reduction

100(5)      The minister, on application by a qualifying manufacturer, may approve the rate reduction referred to in subsection (3).

If rate reduction approved

100(6)      If the minister approves the rate reduction,

(a) the minister must notify the manufacturer and the dealer of the rate reduction; and

(b) the reduction applies to the manufacturer for each billing period that begins after the application and all additional information required to satisfy the minister that the manufacturer qualified for reduction was received by the minister.

When rate reduction ends

100(7)      The rate reduction ceases to apply to a person when he or she ceases to be a qualifying manufacturer.

Notice of change

100(8)      When a person to whom the rate reduction applies ceases to be a qualifying manufacturer or to use electricity for operating manufacturing machinery or equipment, the person must immediately notify the minister and the dealer of that fact.

PART 12

THE TOBACCO TAX ACT

C.C.S.M. c. T80

92          The Tobacco Tax Act is amended by this Part.

93          Subsection 1(1) is amended

(a) by replacing the definition "person" with the following:

"person" includes a partnership, a trust and the Crown in right of Manitoba; (« personne »)

(b) in subclauses (a)(ii) and (b)(ii) of the definition "unit", by striking out "400 grams" and substituting "200 grams".

94          Subsection 2(1) is amended by replacing clauses (c) to (e) with the following:

(c) 15¢ for every gram or fraction of a gram of raw leaf tobacco;

(d) 16.5¢ for every gram or fraction of a gram of tobacco not referred to in any of clauses (a) to (c).

95          Section 3.4 is repealed.

96          Clause 3.6(c) is replaced with the following:

(c) possesses the tobacco product as a common carrier under contract for the transport of it and reasonably believes that it is being delivered to a person who is lawfully entitled to possess it;

97          The following is added after section 3.6:

Possession limit of five units

3.7         No person shall be in possession of more than five units of tobacco unless the person

(a) holds a subsisting dealer's licence;

(b) is a collector;

(c) possesses the tobacco as a common carrier under contract for the transport of it and reasonably believes that it is being delivered to a person who is lawfully entitled to possess it; or

(d) is exempted by regulation from the application of this section.

98          Subsection 13(3) is repealed.

99           Clause 28(1)(w) is replaced with the following:

(w) establishing a system for the sale of tobacco to purchasers in circumstances where they are not required by law to pay tax, which may include limits, or enable the director to set limits, that may be different for different dealers, on refunds to retail dealers of amounts paid by them on account of tax on sales of tobacco in those circumstances.

Validation of regulation

100         For greater certainty, a regulation that

(a) was made under clause 28(1)(w) of The Tobacco Tax Act before the coming into force of section 99; and

(b) would have been validly made if that section had come into force before the regulation was made;

is validated and declared to have been lawfully made.

PART 13

COMING INTO FORCE

Coming into force

101(1)      Except as otherwise provided in this section, this Act comes into force on the day it receives royal assent.

Part 1: The Corporation Capital Tax Act

101(2)      Section 6 is deemed to have come into force on July 1, 2005.

Part 4: The Gasoline Tax Act

101(3)      Section 24 is deemed to have come into force on March 7, 2006.

Part 5: The Income Tax Act

101(4)      Clause 28(d) is deemed to have come into force on January 1, 2003, and applies to the 2003 and subsequent taxation years except that, in applying Rule 6 as enacted by that clause to a taxation year before 2006, the description of T in the formula is to be read without reference to clause (b).

101(5)      Clause 31(3)(a) and subsections 31(5), (6) and (8) come into force on the day that section 118.01 of the Income Tax Act (Canada), which is proposed to be enacted by An Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006, Bill C-13, comes into force.

101(6)       Section 34 is deemed to have come into force on January 1, 2005.

101(7)      Sections 35 and 38 are deemed to have come into force on January 1, 2006, and apply to the 2006 and subsequent taxation years.

101(8)      Section 36 is deemed to have come into force on January 1, 2001.

101(9)      Section 38 is deemed to have come into force on January 1, 2006.

101(10)     Subsections 39(1), (2) and (5) and 40(1) and section 41 are deemed to have come into force on March 9, 2005.

101(11)     Clause 39(3)(b) and subsection 39(4) are deemed to have come into force on February 23, 2005.

101(12)     Sections 43 and 44 and subsection 45(1) are deemed to have come into force on March 7, 2006.

101(13)     Section 46 is deemed to have come into force on June 16, 2005.

Part 6: The Mining Tax Act

101(14)     Clause 48(a) is deemed to have come into force on March 7, 2006.

Part 7: The Motive Fuel Tax Act

101(15)     Subsection 53(1) is deemed to have come into force on March 7, 2006.

101(16)     Subsection 53(2) is deemed to have come into force on April 1, 2004.

Part 9: The Public Schools Act

101(17)     Part 9 is deemed to have come into force on January 1, 2006, and the amount specified by the finance board under section 183 of The Public Schools Act as the amount to be raised for 2006 by a municipality by an education support levy on assessable property other than farm and residential property is deemed to have been calculated in accordance with section 182 of that Act as enacted by section 63 of this Act.

Part 10: The Retail Sales Tax Act

101(18)      Subsection 68(1), clause 72(1)(g) and subsections 72(5) and (9) are deemed to have come into force on April 1, 2006.

101(19)     Section 69 is deemed to have come into force on March 1, 2006.

101(20)     Clause 3(1)(aaa) of The Retail Sales Tax Act, as enacted by clause 72(1)(i), is deemed to have come into force on March 7, 2006.

101(21)     Subsection 72(2) is deemed to have come into force on April 1, 2004.

101(22)     Subsection 72(6) comes into force on July 1, 2006.

101(23)     Section 75 is deemed to have come into force on March 8, 2005.

Part 11: The Tax Administration and Miscellaneous Taxes Act

101(24)     Section 81 is deemed to have come into force on March 7, 2006.

101(25)     Section 82 comes into force on July 1, 2006.

101(26)     Section 86 is deemed to have come into force on July 1, 2005.

101(27)     Section 88 comes into force on a day to be fixed by proclamation.