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S.M. 2022, c. 45
Bill 45, 4th Session, 42nd Legislature
The Budget Implementation and Tax Statutes Amendment Act, 2022
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Explanatory Note This note was written as a reader's aid to the Bill and is not part of the law. This Bill implements various tax and other measures announced in the 2022 Manitoba Budget. Additional amendments implement and support the summary budget and make various amendments to tax legislation. Amendments to tax statutes The changes to tax statutes include the following: Fuel Tax (Part 1) effective May 1, 2022, exempting fuel from tax if the fuel is used only off-road in peat harvesting operations [s. 2] Health and Post Secondary Education Tax Levy Act (Part 2) increasing the threshold for an exemption from the levy to $2,000,000 and the threshold at which the basic tax rate applies to $4,000,000 [s. 4 and 5] Income Tax (Part 3) clarifying the amount of non-refundable tax credits that may be claimed by a multi-jurisdictional filer [s. 7(a)] clarifying how split income is calculated for the purpose of the Act [s. 7(b) and 8] restricting the education property tax credit to owners and providing a new renters tax credit to tenants [s. 9(1)(a) and (b) and 9(2) to 15] repealing outdated provisions [s. 9(1)(c) and 16] implementing the affordability tax credits [s. 17] clarifying which documents are required to accompany an application for the film and video production tax credit [s. 18] making the community enterprise development tax credit permanent [s. 19] making the small business venture capital tax credit permanent and clarifying the regulation-making power with respect to flow-through entities [s. 20 and 21] clarifying the deadline to file information respecting the research and development tax credit in 2020 [s. 22] Mining Tax (Part 4) allowing a major expansion of an existing mine to be eligible for the tax holiday without the approval of the Lieutenant Governor in Council [s. 24 to 32(1)] allowing a major expansion or modernization of a processing facility to be eligible for an additional processing allowance without the approval of the Lieutenant Governor in Council [s. 32(2)] Property Tax and Insulation Assistance Act (Part 5) eliminating the authority to increase school tax rebates by regulation and repealing the General School Tax Rebate Regulation [s. 34, 37 and 39] clarifying that the Minister of Finance is the minister responsible in relation to any overpayment of rebates [s. 35] providing for a statutory appropriation for school tax rebates paid under Part II.1 [s. 36] making a consequential amendment related to the implementation of the renters tax credit under The Income Tax Act [s. 38] Retail Sales Tax (Part 6) requiring an operator of an online sales platform to collect and remit tax on sales of taxable services made by means of the platform [s. 40 to 45] suspending until April 1, 2022, the requirement that an operator of an online sales platform remit tax on sales of tangible personal property made by means of the platform and permitting the minister to refund amounts remitted but not collected from December 1, 2021 to March 31, 2022 [s. 46] Tax Administration and Miscellaneous Taxes (Part 7) clarifying when information obtained under a tax Act may be disclosed and permitting the disclosure of confidential information for the purpose of confirming that a person is registered under a tax Act to a government department or agency for policy, research and analysis purposes and for the administration of a benefit, program or service [s. 48] Other amendments (Part 8) The changes to implement budget measures and support increased accountability under the summary budget include the following: Efficiency Manitoba Act [Division 1] extending the efficiency plan that came into effect on April 1, 2020 to March 31, 2024, and authorizing the minister to extend an efficiency plan for a one-year period [s. 50 to 53] Manitoba Hydro Act [Division 2] allowing for federal contributions to a Manitoba Hydro capital project to be paid to the province and allowing the province to pay those contributions to Manitoba Hydro [s. 55] Manitoba Public Insurance Corporation Act [Division 3] providing a scheme for establishing, achieving and maintaining capital reserve targets in the statute and repealing the Reserves Regulation [s. 57 and 58] The Special Operating Agencies Financing Authority Act [Division 4] renaming the Act as The Special Operating Agencies Act [s. 60] dissolving the Special Operating Agencies Financing Authority [s. 61 to 71 and 74] making consequential amendments to The Electronic Commerce and Information Act and The Vital Statistics Act [s. 72 and 73] Miscellaneous [Division 5] authorizing board members of the Manitoba Film and Sound Recording Development Corporation, a government agency, to be remunerated at rates set by the Lieutenant Governor in Council [s. 75] validating an amendment to the Securities Regulation to authorize certain filing fees that must be paid by international dealers and advisors to the Manitoba Securities Commission and to validate the fees required to be paid since October 12, 2018 [s. 76] |
(Assented to November 3, 2022)
HIS MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
PART 1
THE FUEL TAX ACT
1 The Fuel Tax Act is amended by this Part.
2 The following is added after clause 9(1)(g):
Peat harvesting
(g.1) by the holder of a valid peat harvesting licence under The Peatlands Stewardship Act and for use only in operating an engine exclusively off-road in the course of harvesting peat or any of the following associated activities:
(i) preparing peatlands for harvesting,
(ii) constructing or maintaining a peat harvesting road,
(iii) transporting peat within a peatland or from a peatland to a processing facility,
(iv) activities carried out under a peatland management plan approved under that Act,
(v) restoring, rehabilitating or reclaiming peatlands under a peatland recovery plan approved under that Act;
PART 2
THE HEALTH AND POST SECONDARY EDUCATION TAX LEVY ACT
3 The Health and Post Secondary Education Tax Levy Act is amended by this Part.
4(1) Subsection 3(3.10) is amended in the formula in clause (a), and in clauses (c) and (f), by striking out "$1,750,000" and substituting "$2,000,000".
4(2) Subsection 3(3.12) is amended by striking out "$1,750,000" and substituting "$2,000,000".
4(3) Subsection 3(3.14) is amended
(a) by striking out "$1,750,000" wherever it occurs and substituting "$2,000,000"; and
(b) by striking out "$3,500,000" and substituting "$4,000,000".
4(4) Subsection 3(3.16) is amended in the formula in clause (a), and in clauses (b) and (f), by striking out "$1,750,000" and substituting "$2,000,000".
5(1) Subsection 3.2(2) is amended
(a) in the section heading and in the part before the formula, by striking out "$3,500,000" and substituting "$4,000,000"; and
(b) in the formula, by striking out "$1,750,000" and substituting "$2,000,000".
5(2) Subsection 3.2(3) is amended, in the section heading and in the part before clause (a), by striking out "$3,500,000" and substituting "$4,000,000".
PART 3
THE INCOME TAX ACT
6 The Income Tax Act is amended by this Part.
7 Subsection 4(1) is amended
(a) in Rule 6, by striking out ", add the amount" in the part before the formula and substituting "and the individual is resident in Manitoba on the last day of the taxation year, subtract the amount"; and
(b) in Rule 8,
(i) in the part before subclause (b)(i), by adding "Manitoba percentage of" after "the individual's", and
(ii) in subclause (b)(i), by adding "of the individual's Manitoba percentage" after "10.8%".
8 Section 4.4 is amended by adding "for the purposes of the federal Act" at the end.
9(1) Subsection 5(1) is amended
(a) in the part before clause (a) of the English version, by striking out "his or her" and substituting "their";
(b) by replacing clause (a) with the following:
(a) the individual's education property tax credit, if any, determined under section 5.4;
(a.1) the individual's school tax credit, if any, determined under section 5.5;
(a.2) the individual's seniors school tax rebate, if any, determined under section 5.5.1;
(a.3) the individual's renters tax credit, if any, determined under section 5.6.1;
9(2) Subsection 5(2) is amended
(a) in the part before clause (a), by striking out "clause (1)(a) or (b)" and substituting "any of clauses (1)(a) to (b)";
(b) in clause (a) of the English version, by striking out "he or she" and substituting "they"; and
(c) in clause (b) of the English version, by striking out "he or she is" and substituting "they are".
10(1) Subsection 5.3(1) is amended
(a) in the definition "applicable percentage", by striking out "and" at the end of clause (b) and replacing clause (c) with the following:
(c) for the 2022 taxation year, 62.5%, and
(d) for the 2023 and subsequent taxation years, 50%;
(b) in clause (b) of the definition "family income",
(i) by renumbering subclause (i) as subclause (i.1) and adding the following before subclause (i.1):
(i) deducted under paragraph 20(1)(ww) of the federal Act (split income),
(ii) by striking out "or" at the end of subclause (ii), adding "or" at the end of subclause (iii) and adding the following after subclause (iii):
(iv) deducted under paragraph 60(z) of the federal Act (repayment of registered disability savings plan payments);
(c) in the definition "principal residence",
(i) in clause (a), by striking out "cohabiting",
(ii) by replacing clause (b) with the following:
(b) the primary residence of the individual or the individual's cohabiting spouse or common-law partner throughout the year or that part of the year,
(iii) in clause (c), by striking out "subsections (2) to (4)" and substituting "subsections (2) and (4)";
(d) by repealing the definitions "dwelling unit cost" and "occupancy cost"; and
(e) by adding the following definitions:
"eligible school taxes" of an individual for a taxation year means the amount of school taxes, if any, paid by the individual or their spouse or common-law partner with respect to a residential dwelling unit for the year or part of the year throughout which the dwelling unit is
(a) the principal residence of the individual, and
(b) owned by the individual or the spouse or common-law partner; (« taxes scolaires admissibles »)
"primary residence" means the residential dwelling unit that is the primary residence of an individual as evidenced by such indicators as
(a) the amount of time spent by the individual at the dwelling unit in relation to the amount of time spent at any other dwelling unit,
(b) the address of the individual shown on their income tax return, driver's licence, motor vehicle registration, registration cards for health and health insurance, bank and credit card statements and statements of account for utilities, and
(c) any other prescribed indicators; (« résidence première »)
10(2) Subsection 5.3(1.1) is repealed.
10(3) The following is added as subsection 5.3(1.2):
Extended meaning of "owned" and "owner"
5.3(1.2) For the purpose of subsection (1) and subsections 5.4(1), 5.5(1) and 5.6.1(2), an individual is deemed to own a residential dwelling unit if they own a life interest in the dwelling unit.
10(4) Clause 5.3(2)(a) is replaced with the following:
(a) on the form on which the education property tax credit, the school tax credit, the seniors school tax rebate or the renters tax credit is claimed by the individual;
10(5) Subsection 5.3(3) is repealed.
11 Section 5.4 is replaced with the following:
Eligibility for education property tax credit
5.4(1) An individual whose principal residence is owned by them or their spouse or common-law partner is eligible for an education property tax credit for a taxation year, subject to the following conditions:
1.An individual is not eligible for the credit for the taxation year if, on the last day of the taxation year, they are not resident in Manitoba or are less than 16 years old.
2.An individual is not eligible for the credit for the taxation year if at any time in the taxation year
(a) they are exempt from tax under paragraph 149(1)(a) or (b) of the federal Act (employee of a country other than Canada); or
(b) they are not a Canadian citizen and are on active military service as a member of the armed forces of a country other than Canada, or are a member of the family of such an individual.
3.An individual is not eligible for the credit for the taxation year if they were, throughout the year, the cohabiting spouse or common-law partner of another person who claimed the credit for the year or any part of the year.
4.An individual is not eligible for the credit for a residential dwelling unit for any period for which any other individual claims an education property tax credit for that dwelling unit.
5.An individual is not eligible for the credit for any period during which neither the individual nor their spouse or common-law partner owns the individual's principal residence.
5.4(2) Subject to subsection (3), an individual's education property tax credit for a taxation year is the amount, if any, by which
(a) the applicable percentage of the lesser of the individual's eligible school taxes for the year and the amount determined by the following formula:
$700 × De/Dy
In this formula,
Deis the number of days in the taxation year during which the individual is eligible for the credit,
Dyis the number of days in the year;
exceeds
(b) the total of all amounts each of which is the school tax reduction given in respect of a principal residence of the individual for the year or a part of the year.
Education property tax credit for seniors
5.4(3) If an individual or their cohabiting spouse or common-law partner is at least 65 years of age at the end of a taxation year, the individual's education property tax credit for the taxation year is the amount determined by the following formula:
A − B
In this formula,
Ais the applicable percentage of the lesser of the individual's eligible school taxes for the year and the amount determined by the following formula:
($1,100 − C) × De/Dy
In this formula,
Cis the lesser of $400 and 1% of the individual's family income for the year,
Deis the number of days in the taxation year during which the individual is eligible for the credit,
Dyis the number of days in the year;
Bis the total of all amounts each of which is the school tax reduction given in respect of a principal residence of the individual for the year or a part of the year.
12(1) Subsection 5.5(1) is amended
(a) in clause (b), by striking out everything after "individual's principal residence"; and
(b) in clause (d), by adding "and has not claimed an education property tax credit for that year" at the end.
12(2) Subsection 5.5(2) is amended
(a) in the part before clause (a), by adding "the applicable percentage of" after "taxation year is";
(b) in clause (a),
(i) in the part before subclause (i), by striking out "occupancy cost" and substituting "eligible school taxes", and
(ii) in subclause (iii) of the English version, by striking out "the seniors' school tax rebate" and substituting "the seniors school tax rebate"; and
(c) in clause (b), in the part before the formula, by striking out "the applicable percentage of".
13 In the following provisions of the English version, "seniors' school tax rebate" is struck out and "seniors school tax rebate" is substituted:
(a) subsection 5.5.1(3), in the part before item 1 and in item 6;
(b) clause 5.5.1(4)(a);
(c) subsection 5.5.1(5), in the section heading and in the part before the formula, with necessary grammatical changes.
14 The following is added after section 5.6 and before the centred heading that follows it:
Renters Tax Credit
5.6.1(1) The following definitions apply in this section.
"eligible rental cost" of an individual's rented residence for a taxation year is
(a) the total of the rental and other payments (other than payments for meals or board) paid for any period in the year for a rented residence by or on behalf of the individual; or
(b) in the case of a rented residence that is a room in a personal care home, the amount equal to 50% of the portion of the per diem charges that were paid to the personal care home for any period in the year by or on behalf of the individual and that were not claimed by any taxpayer as a medical expense under subsection 4.6(17). (« frais de loyer admissibles »)
"rented residence" of an individual means the principal residence of the individual that is rented by them or their spouse or common-law partner from another person. (« résidence louée »)
Eligibility for renters tax credit
5.6.1(2) An individual with a rented residence is eligible for a renters tax credit for a taxation year subject to the following conditions:
1.An individual is not eligible for the credit for the taxation year if, on the last day of the taxation year, they are not resident in Manitoba or are less than 16 years old.
2.An individual is not eligible for the credit for the taxation year if at any time in the taxation year
(a) they are exempt from tax under paragraph 149(1)(a) or (b) of the federal Act (employee of a country other than Canada); or
(b) they are not a Canadian citizen and are on active military service as a member of the armed forces of a country other than Canada, or are a member of the family of such an individual.
3.An individual is not eligible for the credit for a residential dwelling unit
(a) for any period for which any other individual claims a renters tax credit for that dwelling unit; or
(b) for any period for which the dwelling unit is the primary residence of an owner of the dwelling unit or the cohabiting spouse or common-law partner of the owner.
4.An individual is not eligible for the credit for any period during which the individual does not have a rented residence.
5.6.1(3) Subject to subsection (4), an individual's renters tax credit for a taxation year is the lesser of
(a) the individual's eligible rental cost for the year; and
(b) $43.75 multiplied by the number of months in the year that the individual is eligible for the credit.
Renters tax credit for seniors
5.6.1(4) If an individual or their cohabiting spouse or common-law partner is at least 65 years of age at the end of a taxation year, the individual's renters tax credit for the taxation year is the lesser of the individual's eligible rental cost for the year and the amount determined by the following formula:
($825 − A) × M/12
In this formula,
Ais the lesser of $300 and 0.75% of the individual's family income for the year;
Mis the number of months in the year that the individual is eligible for the credit.
5.6.1(5) For the purpose of subsections (3) and (4), a month means a calendar month more than half of the days of which the individual is eligible to claim the renters tax credit with respect to a residence.
15 Clause 5.7(1)(a) is replaced with the following:
(a) the individual is
(i) less than 16 years old at the end of the year,
(ii) exempt from tax under paragraph 149(1)(a) or (b) of the federal Act (employee of a country other than Canada), or
(iii) not a Canadian citizen and is on active military service as a member of the armed forces of a country other than Canada, or a member of the family of such an individual;
16 Section 5.14 and the centred heading before it are repealed.
17 The following is added as sections 6.1 to 6.6:
2022 Affordability Tax Credits
6.1 The following definitions apply in sections 6.2 to 6.4.
"2021 adjusted income", of an individual for the 2021 taxation year, means the total of all amounts each of which would be the income for the year of the individual or of the person who was the individual's cohabiting spouse or common-law partner on July 31, 2022, if in computing that income
(a) no amount were included
(i) under paragraph 56(1)(q.1) or subsection 56(6) of the federal Act, or
(ii) in respect of any gain from a disposition of property to which section 79 of the federal Act applies;
(b) no amount were deductible under paragraph 20(1)(ww) or 60(y) or (z) of the federal Act; and
(c) subsection 122.61(3) of the federal Act was applicable. (« revenu rajusté pour 2021 »)
"cohabiting spouse or common-law partner" and "family income" have the same meaning as in subsection 5.3(1). (« conjoint ou conjoint de fait visé » et « revenu familial »)
"qualified dependant" and "return of income" have the same meaning as in section 122.6 of the federal Act. (« déclaration de revenu » et « personne à charge admissible »)
Eligibility for tax credit for families
6.2(1) Subject to subsection (2), an individual is eligible for an affordability tax credit under this section for the 2022 taxation year if
(a) the individual is resident in Manitoba on December 31, 2022;
(b) the individual is an eligible individual (as defined in section 122.6 of the federal Act) in respect of one or more qualified dependants on August 31, 2022, or would have been an eligible individual if subsection 122.62(1) of the federal Act did not apply;
(c) the individual's 2021 adjusted income is less than $175,000; and
(d) the individual and their cohabiting spouse or common-law partner, if any, filed their return of income for the 2021 taxation year before January 1, 2023.
6.2(2) An individual is not eligible for the credit in respect of a qualified dependant if the credit in respect of that dependant was paid to or claimed by the individual's cohabiting spouse or common-law partner.
Affordability tax credit amount — families
6.2(3) The affordability tax credit under this section of an individual for the 2022 taxation year is the total of
(a) $250 for the first qualified dependant of the individual on August 31, 2022; and
(b) $200 for each additional qualified dependant of the individual on August 31, 2022.
Eligibility for tax credit for seniors
6.3(1) An individual is eligible for an affordability tax credit under this section for the 2022 taxation year if
(a) the individual or their cohabiting spouse or common-law partner is at least 65 years of age on December 31, 2021;
(b) the individual
(i) has received an education property tax credit under section 5.4 greater than nil or a school tax reduction under section 5.6 for the 2021 taxation year, or
(ii) would have been eligible for an education property tax credit under section 5.4 greater than nil for the 2021 taxation year if section 5 were read without reference to clause (1)(a) (education property tax credit reduced by shelter allowance benefit) and subsection (2) (limited credits for recipients of social assistance);
(c) the individual's family income for the 2021 taxation year is less than $40,000;
(d) the individual is resident in Manitoba on December 31, 2022;
(e) the individual filed their return of income for the 2021 taxation year before January 1, 2023; and
(f) the individual's cohabiting spouse or common-law partner, if any, filed their return of income for the 2021 taxation year before January 1, 2023, and has not claimed a credit under this section or received an advance payment of the credit described in subsection 6.4(1).
Affordability tax credit amount — seniors
6.3(2) The affordability tax credit under this section of an individual for the 2022 taxation year is $300.
6.4(1) A payment to an individual of the amount of the individual's anticipated affordability tax credit under section 6.2 or 6.3, without application by the individual, is deemed to be paid on account of the affordability tax credit to which the individual may be entitled.
Application for credit if not received in 2022
6.4(2) An individual who has not received their affordability tax credit under section 6.2 or 6.3 in 2022 ceases to be eligible for it unless they apply for the credit to the Minister of Finance for Manitoba, in the form and manner acceptable to the minister, before March 1, 2023.
Application for credit of deceased individual
6.4(3) If
(a) an individual dies in 2022, is resident in Manitoba immediately before death and would have been eligible for an affordability tax credit but for their death;
(b) a tax credit has not been paid to the deceased individual as an advance payment described in subsection (1);
(c) the deceased individual did not apply for the credit under subsection (2);
(d) the deceased individual had a cohabiting spouse or common-law partner immediately before death; and
(e) the surviving spouse or common-law partner is resident in Manitoba on December 31, 2022;
the surviving spouse or common-law partner may apply to the Minister of Finance for Manitoba, in the form and manner acceptable to the minister, for the affordability tax credit that the deceased individual would have been entitled to under section 6.2 or 6.3. The application must be made before March 1, 2023.
Payment of affordability tax credit
6.4(4) If, on application under subsection (2) or (3), the Minister of Finance for Manitoba is satisfied that an affordability tax credit is payable, the minister must pay the amount of the credit to the applicant.
6.4(5) A payment under this section is deemed to be a refund of an amount paid on account of tax.
6.5(1) The Minister of Finance for Manitoba must promptly notify an applicant in writing if the minister is not satisfied that an affordability tax credit is payable to the applicant.
6.5(2) An individual may request that the Minister of Finance for Manitoba, in the form and manner acceptable to the minister, reconsider the individual's application under subsection 6.4(2) or 6.4(3) within 30 days of being provided notice of a decision under subsection (1).
6.5(3) After considering the individual's application under subsection (2), the minister may confirm or vary the decision. The minister must give the individual notice of the decision under this subsection.
6.5(4) There is no appeal from a decision of the minister made under subsection (3).
Federal provisions do not apply
6.5(5) For certainty, section 165 of the federal Act (objections) does not apply in respect of the affordability tax credits.
6.6 If the Minister of Finance for Manitoba determines that a payment in respect of an affordability tax credit was paid to a person who was not eligible for it, the amount of the payment is recoverable from the person and is a debt due by the person to His Majesty in right of Manitoba.
18 Clause 7.6(7)(a) is replaced with the following:
(a) either
(i) an advance certificate of eligibility issued under subsection 7.7(2), or
(ii) in the case of a completed production, the certificate of completion issued under subsection 7.7(3); and
19(1) Paragraph 11.8(2)(b)(i)(A) is amended by striking out ", and before 2023".
19(2) Subsection 11.8(2.1) is amended by striking out "and before 2023".
20(1) Subsection 11.13(3) is amended
(a) in subclauses (a)(ii) and (b)(ii), by striking out "flow-through investment vehicle" and substituting "flow-through entity"; and
(b) in clause (b.1),
(i) in subclause (i), by striking out everything after "in the taxation year" and substituting "and after April 6, 2021, or", and
(ii) by replacing subclause (ii) with the following:
(ii) the investor's share, as determined under the regulations, of the cost to a flow-through entity of an eligible investment issued to it in the investor's taxation year and after April 6, 2021;
20(2) Clause 11.13(4)(a) is amended by adding "or flow-through entity has" after "the eligible investor".
21 Clause 11.17(1)(h) is replaced with the following:
(h) enabling eligible investors to earn SBVC tax credits in respect of an eligible investment acquired by a flow-through entity, such as a partnership or trust, to which they have contributed the capital required for the investment, including regulations
(i) respecting the obligations of these entities and their partners or trustees,
(ii) establishing recordkeeping and reporting requirements for these entities,
(iii) extending the application of sections 11.15 and 11.16, with necessary changes, to investments in these entities, and
(iv) imposing a tax or penalty on a flow-through entity or its administrators or investors for any failure to comply with section 11.15 or 11.16 or any regulation made under this section;
Extension of time limit — 2020
22 The time limit of one year referred to in clause 7.3(2.2)(a) is extended by six months or until December 31, 2020, whichever extension is shorter, if the time limit would otherwise expire during the period beginning March 13, 2020, and ending December 30, 2020.
PART 4
THE MINING TAX ACT
23 The Mining Tax Act is amended by this Part.
24 Subsection 1(1) is amended
(a) by adding the following definitions:
"major expansion" means a mine expansion designated by the minister under subsection 4.2(3) as a major expansion; (« expansion majeure »)
"tax holiday" means an exemption for new mines or major expansions from tax under this Act as set out in section 4.1; (« exonération fiscale »)
"tax holiday period" means the period during which a new mine or major expansion is eligible for the tax holiday as determined under section 4.1; (« période d'exonération fiscale »)
(b) by replacing the definition "new mine" with the following:
"new mine" means a mine designated by the minister under subsection 4.2(2) as a new mine; (« nouvelle mine »)
(c) by repealing the definitions "new mine tax holiday" and "new mine tax holiday period"; and
(d) in the definition "tax holiday pool", by adding "or major expansion" after "a new mine".
25 The following is added after subsection 1(3):
Interpretation — major expansion
1(4) For the purposes of this Act, a major expansion is deemed to be a mine separate and distinct from the mine that is expanded by it.
26 Subsections 4(3) and (4) are replaced with the following:
Exception for new mine or major expansion loss
4(3) Subsection (2) does not apply in determining the profit of an operator of a new mine or major expansion in a tax holiday period.
Operator's profit excludes new mine or major expansion
4(4) The profit of an operator referred to in subsection (1) shall not include the operator's profit or loss from a new mine or major expansion that is in a tax holiday period.
27(1) Subsections 4.1(1) and (2) are replaced with the following:
4.1(1) An operator of a new mine or major expansion is eligible for an exemption from tax on the profit from the new mine or major expansion for the period beginning on the date of its designation as a new mine or major expansion and ending in the fiscal year in which the tax holiday pool, calculated in accordance with Formula 5 set out in the Schedule, is nil or negative.
Profit from new mine or major expansion
4.1(2) Subject to subsection (3), the operator's profit in a fiscal year from a new mine or major expansion eligible for the tax holiday
(a) is to be calculated separately as if the new mine or major expansion were the only mine in which the operator had an interest; and
(b) is to be calculated in accordance with Formula 2 set out in the Schedule on the basis of only those revenues and expenses that pertain to the new mine or major expansion and the annual depreciation allowance to be deducted is the lesser of
(i) the amount calculated under clause 7(1)(g) at the rate of 20% of the undepreciated balance of the depreciable assets of the new mine or major expansion, and
(ii) the amount calculated in accordance with Formula 2 for that new mine or major expansion before deducting any depreciation allowance under clause 7(1)(g).
27(2) Subsection 4.1(3) is amended
(a) in the section heading, by striking out "from new mine";
(b) by adding "or major expansion" after "from a new mine"; and
(c) by striking out "new mine tax holiday" and substituting "tax holiday".
28 Section 4.2 is replaced with the following:
4.2(1) An operator may apply to the minister, in the form and manner approved by the minister, to have
(a) a mine designated as a new mine eligible for the tax holiday; or
(b) an expansion of an existing mine designated as a major expansion eligible for the tax holiday.
4.2(2) The minister may designate a mine as a new mine eligible for the tax holiday if the minister is reasonably satisfied that
(a) the ore body to be mined is separate and distinct geologically from an ore body mined by any other mine;
(b) the mine has no common workings or mining operations with any other mine; and
(c) the mine is not a formerly operated mine.
Designation of major expansion
4.2(3) The minister may designate an expansion of an existing mine as a major expansion eligible for the tax holiday if the minister is reasonably satisfied that
(a) the expansion is undertaken for the purpose of increasing the potential production of the existing mine;
(b) the expenditures incurred after 2021 by the operator for the acquisition of depreciable assets in the course of and principally for the purpose of the expansion are not less than 10% of the undepreciated balance of depreciable assets of the operator at the beginning of the fiscal year in which the designation is made; and
(c) the mine that is to be expanded is not a new mine in a tax holiday period.
4.2(4) For the purpose of subsection (3),
(a) re-opening a mine that has been abandoned or closed for a continuous period of at least 60 months before the month that the minister makes a designation is deemed to be an expansion of an existing mine undertaken for the purpose of increasing the potential production of the mine; and
(b) the undepreciated balance of depreciable assets of the operator is calculated without reference to assets that pertain to mines that are in a tax holiday period.
29(1) Subsection 4.3(1) is replaced with the following:
Election to exclude from tax holiday
4.3(1) At the time a return is filed under subsection 22(1), an operator of a new mine or major expansion may file an election with the director for the new mine or major expansion to be excluded from the tax holiday.
29(2) Subsection 4.3(2) is amended
(a) in clause (a),
(i) by adding "or major expansion" after "profit from the new mine", and
(ii) by striking out "the new mine tax holiday" and substituting "the tax holiday";
(b) in clause (b), by adding "or major expansion" after "the new mine";
(c) in clause (c), by striking out "the new mine's depreciable assets" and substituting "the depreciable assets of the new mine or major expansion"; and
(d) by replacing clause (d) with the following:
(d) the new mine or major expansion is permanently excluded from the tax holiday.
30 Subsection 10(3.1) is amended
(a) in the section heading, by adding "or major expansion" after "New mine";
(b) in clause (a), by striking out everything after "relate to a new mine" and substituting "or major expansion in the tax holiday period;"; and
(c) in clause (c), by striking out "the new mine tax holiday period" and substituting "the tax holiday period".
31(1) Subsection 11(2.1) is replaced with the following:
Depreciable assets of new mine or major expansion
11(2.1) Where an operator of a new mine or major expansion in the tax holiday period incurs expenditures for depreciable assets for that new mine or major expansion, a depreciation allowance for the fiscal year as calculated under clause 4.1(2)(b), or as calculated under subsection 9(2) where the fiscal year is a short fiscal year, shall be allowed for all such depreciable assets provided that they
(a) relate only to that new mine or major expansion;
(b) are accounted for separately by the operator; and
31(2) Subsection 11(2.2) is replaced with the following:
Undepreciated balance of new mine or major expansion assets
11(2.2) Where in a fiscal year the tax holiday period expires, the undepreciated balance of depreciable assets referred to in subsection (2.1) of the new mine or major expansion shall be added to the operator's undepreciated balance of depreciable assets referred to in clause 7(1)(g) for the next following fiscal year.
32(1) Formulas 5 and 6 in the Schedule are replaced with the following:
FORMULA 5
(Subsection 4.1(1))
Tax holiday pool = H + A − D − P
In this formula
His the balance of the tax holiday pool of the operator relating to a new mine or major expansion at the end of the previous fiscal year;
Ais the expenditures incurred in the current fiscal year and prior to the new mine or major expansion achieving production in reasonable commercial quantities, for the acquisition of depreciable assets, including processing assets, of the new mine or major expansion, in accordance with this Act;
Dis the proceeds of disposal for depreciable assets, including processing assets, of the new mine or major expansion in the current fiscal year, in accordance with this Act; and
Pis the profit of the new mine or major expansion, before depreciation allowance, earned by the operator in the current fiscal year, in accordance with subsection 4.1(2).
FORMULA 6
(Subsection 4.1(3))
Tax holiday profit in the fiscal year the tax holiday period ends = (H + A − D)/P × Q