Bill 15, Tax Cuts for People and for Small Business Act, 1998

Eves, Hon. Ernie Minister of Finance

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B015_E

Bill 15 1998

An Act to cut taxes for people and for small business and to implement other measures contained in the 1998 Budget

CONTENTS

Part I

Income Tax Act

Partie I

Loi de l'impôt sur le revenu

Part II

Corporations Tax Act

Partie II

Loi sur l'imposition des corporations

Part III

Highway Traffic Act

Partie III

Code de la route

Part IV

Land Transfer Tax Act

Partie IV

Loi sur les droits de cession immobilière

Part V

Ontario Loan Act, 1998

Partie V

Loi de 1998 sur les emprunts de l'Ontario

Part VI

Ontario Lottery Corporation Act

Partie VI

Loi sur la Société des loteries de l'Ontario

Part VII

Retail Sales Tax Act

Partie VII

Loi sur la taxe de vente au détail

Part VIII

Tobacco Tax Act

Partie VIII

Loi de la taxe sur le tabac

Part IX

Commencement and Short Title

Partie IX

Entrée en vigueur et titre abrégé

Schedule A

Ontario Loan Act, 1998

Annexe A

Loi de 1998 sur les emprunts de l'Ontario

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

PART I

INCOME TAX ACT

1. Paragraph 6 of subsection 3 (1) of the Income Tax Act, as enacted by the Statutes of Ontario, 1997, chapter 10, section 1, is repealed and the following substituted:

6. For 1998, the additional income tax shall equal the aggregate of,

i. 20 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $4,057.50, and

ii. 33 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $5,217.50.

7. For 1999 and subsequent taxation years, the additional income tax for each taxation year shall equal the aggregate of,

i. 20 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $3,845, and

ii. 36 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $4,800.

2. Clause 4 (5) (t) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 10, section 2, is repealed and the following substituted:

(t) 42.75 per cent in respect of the 1998 taxation year;

(u) 40.5 per cent in respect of the 1999 and subsequent taxation years.

3. Subsection 8 (18) of the Act, as amended by the Statutes of Ontario, 1993, chapter 29, section 2, is repealed and the following substituted:

Application for tax credit

(18) The Provincial Minister may allow a deduction or an additional deduction under this section to an individual for a taxation year after 1984,

(a) if the individual makes a claim to the Provincial Minister that he or she is entitled to the deduction or additional deduction in excess of the amount of any deduction previously allowed under this section for the taxation year;

(b) if the claim for the deduction or additional deduction is not made in connection with or for the same taxation year as a remission referred to in subsection 28 (1) made under the Financial Administration Act (Canada); and

Same

(19) Where the Provincial Minister allows a deduction or an additional deduction under subsection (18), he or she shall apply the amount of the deduction or additional deduction in the manner described in subsection (10).

4. (1) Subsection 28 (2) of the Act is amended by striking out "when the claim is made more than three years after the end of the taxation year to which the claim relates" in the ninth, tenth and eleventh lines.

(2) Subsection 28 (3) of the Act is repealed.

Commencement

5. (1) Subject to subsection (2), this Part comes into force on the day this Act receives Royal Assent.

(2) Sections 1 and 2 shall be deemed to have come into force on January 1, 1998.

PART II

CORPORATIONS TAX ACT

6. Subsection 11.1 (3) of the Corporations Tax Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 6, is repealed.

7. The definition of "Ontario allocation factor" in subsection 12 (1) of the Act is amended by inserting after "section 13" in the eighth and ninth lines of clause (a) and in the eighth line of clause (b) "or 13.1".

8. (1) Subclause 14 (5) (e) (i) of the Act is amended by striking out "and" at the end of sub-subclause (A) and by adding the following sub-subclause:

(C) under section 13.1 in respect of an amount deducted under clause 11 (10) (a) by the partnership as an Ontario new technology tax incentive, and

. . . . .

(2) Subclause 14 (5) (e) (ii) of the Act, as amended by the Statutes of Ontario, 1992, chapter 3, section 5, is further amended by adding after "subsection 12 (13)" in the seventh line "or section 11.1".

9. (1) Subsection 35 (2) of the Act is amended by striking out "section 12 or 13 or both sections" in the 19th and 20th lines and substituting "any of sections 12, 13 and 13.1".

(2) Subsection 35 (3) of the Act is amended by striking out "section 12 or 13" in the fifth line of clause (c), in the fourth line of clause (d) and in the third line of subclause (d) (ii) and substituting in each case "section 12, 13 or 13.1".

10. (1) Subsection 41 (1) of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 1, Schedule B, section 5, is amended by striking out "ending after June 30, 1994 an amount equal to 6 per cent" in the third and fourth lines and substituting "an amount equal to the percentage described in subsection (1.1)".

(2) Section 41 of the Act, as amended by the Statutes of Ontario, 1996, chapter 1, Schedule B, section 5, is further amended by adding the following subsections:

Same

(1.1) Subject to subsections (1.2) to (1.4), the percentage referred to in subsection (1) is,

(a) 6 per cent, in respect of a taxation year that ends after June 30, 1994 and before May 5, 1998;

(b) 6.5 per cent, in respect of a taxation year that ends after May 4, 1998 and before January 1, 1999;

(d) 7.5 per cent, in respect of a taxation year that ends after December 31, 1999 and before January 1, 2001;

(e) 8 per cent, in respect of a taxation year that ends after December 31, 2000 and before January 1, 2002;

(f) 8.5 per cent, in respect of a taxation year that ends after December 31, 2001 and before January 1, 2003;

(g) 9 per cent, in respect of a taxation year that ends after December 31, 2002 and before January 1, 2004;

(h) 9.5 per cent, in respect of a taxation year that ends after December 31, 2003 and before January 1, 2005;

(i) 10 per cent, in respect of a taxation year that ends after December 31, 2004 and before January 1, 2006;

(j) 10.75 per cent, in respect of a taxation year that ends after December 31, 2005.

Same, 1998

(1.2) Despite clause (1.1) (b), if the taxation year begins before May 5, 1998, the increase from 6 per cent to 6.5 per cent shall be prorated according to the number of days in the taxation year that are after May 4, 1998.

Same, 1999

(1.3) Despite clause (1.1) (c),

(a) if the taxation year begins before May 5, 1998, the reference to 7 per cent in clause (c) shall be read as the percentage equal to the total of,

(i) 6 per cent multiplied by the ratio of the number of days in the taxation year that are before May 5, 1998 to the total number of days in the taxation year,

(ii) 6.5 per cent multiplied by the ratio of the number of days in the taxation year that are after May 4, 1998 and before January 1, 1999 to the total number of days in the taxation year, and

(iii) 7 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 1998 and before January 1, 2000 to the total number of days in the taxation year; and

(b) if the taxation year begins after May 4, 1998 and before January 1, 1999, the increase from 6.5 per cent to 7 per cent shall be prorated according to the number of days in the taxation year that are after December 31, 1998 and before January 1, 2000.

Same, 2000 and later

(1.4) Despite clauses (1.1) (d) to (j), if the taxation year begins on or before the December 31 indicated in the applicable clause, the increase from the percentage set out in the preceding clause to the percentage set out in the applicable clause shall be prorated according to the number of days in the taxation year that are after that December 31.

11. Subsection 41.1 (3) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 14, section 15, is repealed and the following substituted:

Specified rate

(3) For the purposes of this section, a corporation's specified rate for a taxation year ending after May 4, 1998 is the rate calculated using the formula,

(0.04 C/Z) + (0.0433 D/Z) + (0.0467 E/Z) +

(0,04 C/Z) + (0,0433 D/Z) + (0,0467 E/Z) +

(0.05 F/Z) + (0.0533 G/Z) + (0.0567 H/Z) +

(0,05 F/Z) + (0,0533 G/Z) + (0,0567 H/Z) +

(0.06 I/Z) + (0.0633 J/Z) + (0.0667 K/Z) +

(0,06 I/Z) + (0,0633 J/Z) + (0,0667 K/Z) +

(0.0717 L/Z)

(0,0717 L/Z)

in which, "

C" is the number of days in the taxation year that are after April 30, 1992 and before May 5, 1998;

D" is the number of days in the taxation year that are after May 4, 1998 and before January 1, 1999;

E" is the number of days in the taxation year that are after December 31, 1998 and before January 1, 2000;

F" is the number of days in the taxation year that are after December 31, 1999 and before January 1, 2001;

G" is the number of days in the taxation year that are after December 31, 2000 and before January 1, 2002;

H" is the number of days in the taxation year that are after December 31, 2001 and before January 1, 2003;

I" is the number of days in the taxation year that are after December 31, 2002 and before January 1, 2004;

J" is the number of days in the taxation year that are after December 31, 2003 and before January 1, 2005;

K" is the number of days in the taxation year that are after December 31, 2004 and before January 1, 2006;

L" is the number of days in the taxation year that are after December 31, 2005; and

Z" is the number of days in the taxation year.

12. (1) Clause 43 (4) (b) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 14, section 16, is repealed and the following substituted:

(b) the amount calculated using the formula,

(A/0.06 B/C D/Z) + (A/0.065 B/C E/Z) +

(A/0,06 B/C D/Z) + (A/0,065 B/C E/Z) +

(A/0.07 B/C F/Z) + (A/0.075 B/C G/Z) +

(A/0,07 B/C F/Z) + (A/0,075 B/C G/Z) +

(A/0.08 B/C H/Z) + (A/0.085 B/C I/Z) +

(A/0,08 B/C H/Z) + (A/0,085 B/C I/Z) +

(A/0.09 B/C J/Z) + (A/0.095 B/C K/Z) +

(A/0,09 B/C J/Z) + (A/0,095 B/C K/Z) +

(A/0.10 B/C L/Z) + (A/0.1075 B/C M/Z)

(A/0,10 B/C L/Z) + (A/0,1075 B/C M/Z)

in which, "

A" is the amount, if any, of the surtax determined under section 41.1 for the taxation year,

B" is the amount, if any, determined under clause (1) (b) for the taxation year,

C" is the amount, if any, determined under clause (1) (a) for the taxation year,

D" is the number of days in the taxation year that are after April 30, 1992 and before May 5, 1998,

E" is the number of days in the taxation year that are after May 4, 1998 and before January 1, 1999,

F" is the number of days in the taxation year that are after December 31, 1998 and before January 1, 2000,

G" is the number of days in the taxation year that are after December 31, 1999 and before January 1, 2001,

H" is the number of days in the taxation year that are after December 31, 2000 and before January 1, 2002,

I" is the number of days in the taxation year that are after December 31, 2001 and before January 1, 2003,

J" is the number of days in the taxation year that are after December 31, 2002 and before January 1, 2004,

K" is the number of days in the taxation year that are after December 31, 2003 and before January 1, 2005,

L" is the number of days in the taxation year that are after December 31, 2004 and before January 1, 2006,

M" is the number of days in the taxation year that are after December 31, 2005, and

Z" is the number of days in the taxation year.

(2) Clause 43 (4) (b) of the Act, as re-enacted by subsection (1), applies in respect of taxation years ending after May 4, 1998.

13. (1) Subsection 43.5 (4) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 24, section 27 and amended by 1997, chapter 43, Schedule A, section 19, is further amended by striking out the portion before clause (a) and substituting the following:

Eligible credit, first-time production

(4) A qualifying production company's eligible credit for a taxation year in respect of a first-time production for which principal photography commences before November 1, 1997 is the lesser of,

. . . . .

(2) Sub-subclause 43.5 (4) (a) (i) (A) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 24, section 27, is repealed and the following substituted:

(A) the amount by which $240,000 exceeds the company's qualifying labour expenditure, if any, for the production for the previous taxation year, and

. . . . .

(3) Section 43.5 of the Act, as enacted by the Statutes of Ontario, 1996, chapter 24, section 27 and amended by 1996, chapter 29, section 50 and 1997, chapter 43, Schedule A, section 19, is further amended by adding the following subsection:

Same, first-time production commenced after October 31, 1997

(4.1) A qualifying production company's eligible credit for a taxation year in respect of a first-time production for which principal photography commences after October 31, 1997 is the sum of,

(a) 30 per cent of the lesser of,

(i) the amount by which $240,000 exceeds the company's qualifying labour expenditure, if any, for the production for the previous taxation year, and

(ii) the company's qualifying labour expenditure for the taxation year for the production less its qualifying labour expenditure, if any, for the production for the previous year; and

(b) 20 per cent of the amount, if any, by which the company's qualifying labour expenditure for the taxation year for the production exceeds the sum of,

(i) the lesser of the amounts, if any, determined under subclauses (a) (i) and (ii), and

(ii) the company's qualifying labour expenditure, if any, for the production for the previous taxation year.

(4) Subsection 43.5 (6) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 24, section 27 and amended by 1997, chapter 43, Schedule A, section 19, is further amended by striking out the portion before clause (a) and substituting the following:

Eligible credit, other productions

(6) A qualifying production company's eligible credit for a taxation year in respect of an eligible Ontario production for which principal photography commences before November 1, 1997 is, if the production is not a first-time production, the lesser of,

. . . . .

(5) Section 43.5 of the Act,as enacted by the Statutes of Ontario, 1996, chapter 24, section 27 and amended by 1996, chapter 29, section 50 and 1997, chapter 43, Schedule A, section 19, is further amended by adding the following subsections:

Same, productions commenced after October 31, 1997

(6.1) A qualifying production company's eligible credit for a taxation year in respect of an eligible Ontario production for which principal photography commences after October 31, 1997 is, if the production is not a first-time production, 20 per cent of the amount by which the company's qualifying labour expenditure for the taxation year in respect of the production exceeds its qualifying labour expenditure, if any, for the production for the previous taxation year.

Exception

(6.2) Despite subsections (4) to (6.1), a qualifying production company's eligible credit for a taxation year in respect of an eligible Ontario production is nil if the company claims a tax credit for any taxation year under section 43.10 in respect of the production.

(6) Subsection 43.5 (9) of the Act, as enacted by the Statutes of Ontario 1996, chapter 24, section 27, is repealed and the following substituted:

Certificate

(9) If the particular production is an eligible Ontario production for the purposes of this section, the Ontario Film Development Corporation or the person designated by the Minister of Citizenship, Culture and Recreation shall issue to the qualifying production company a certificate and any amended certificates, with each certificate,

(a) certifying that the particular production is an eligible Ontario production for the purposes of this section;

(b) certifying the estimated amount of the corporation's eligible credit for the production, for the purposes of this section; and

(c) if principal photography for the production commences before November 1, 1997, certifying the amount of the company's Ontario film and television tax credit limit to be allocated to the particular production.

(7) Subsection 43.5 (11) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 19, is repealed and the following substituted:

Tax credit limit

(11) The Ontario film and television tax credit limit of a qualifying production company and all corporations associated with the company in respect of eligible Ontario productions for which principal photography commences in a production year and before November 1, 1997 is the amount determined under the following rules:

1. The Ontario film and television tax credit limit in respect of all eligible Ontario productions for which principal photography is commenced by the company or a corporation associated with the company in the 1996 production year is $2,000,000.

2. The Ontario film and television tax credit limit in respect of all eligible Ontario productions for which the principal photography is commenced by the company or a corporation associated with the company in the 1997 production year and before November 1, 1997 is $2,666,667.

(8) Subsection 43.5 (12) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 24, section 27 and amended by 1997, chapter 43, Schedule A, section 19, is repealed and the following substituted:

Same

(12) No person shall issue certificates under subsection (9) in respect of productions for which principal photography commences before November 1, 1997, in which the total of the amounts certified in respect of eligible Ontario productions commenced in the same production year and before November 1, 1997 by the qualifying production company and all corporations associated with the company in the year would exceed the amount of the Ontario film and television tax credit limit applicable to that production year.

(9) Subsection 43.5 (13) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 24, section 27 and amended by 1997, chapter 43, Schedule A, section 19, is further amended by striking out the portion before clause (a) and substituting the following:

Maximum certified amount

(13) The amount that may be certified under subsection (9) and allocated to a particular eligible Ontario production for which principal photography commences before November 1, 1997 shall not exceed,

. . . . .

(10) Subsection 43.5 (16) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 24, section 27, is repealed and the following substituted:

Revocation of certificate

(16) A certificate or amended certificate issued under subsection (9) may be revoked,

(a) if an omission or incorrect statement was made for the purpose of obtaining the certificate;

(b) if the production is not an eligible Ontario production;

(d) if the corporation is issued a certificate in respect of the production under subsection 43.10 (8).

14. The definition of "government assistance" in subsection 43.6 (14) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 20, is amended by adding the following paragraph:

6.1 An Ontario production services tax credit under section 43.10.

15. (1) Clause 43.7 (3) (a) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is repealed and the following substituted:

(a) 30 per cent of the qualifying expenditures made by the corporation after May 6, 1997 and before the end of the taxation year in respect of the publishing of the literary work, to the extent the expenditures were not included in determining the available credit relating to the publishing of the literary work that was included in an Ontario book publishing tax credit claimed by the corporation for a prior taxation year; and

. . . . .

(2) Section 43.7 of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is amended by adding the following subsections:

Revocation of certificate

(11.1) A certificate issued under subsection (10) may be revoked if an omission or incorrect statement was made for the purpose of obtaining the certificate, if the corporation is not an Ontario book publishing company, or if the literary work is not an eligible literary work for the purposes of this section.

Same

(11.2) A certificate that is revoked shall be deemed never to have been issued.

16. (1) Clause 43.8 (16) (b) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 22, is repealed and the following substituted:

(b) the amount by which 48 per cent of the prescribed cost of eligible computer animation and special effects activities incurred by the corporation in the taxation year in respect of the eligible production exceeds the amount of all government assistance, if any, in respect of eligible computer animation and special effects activities the cost of which is included in the cost or capital cost of the eligible production that, at the time the corporation's return is required to be delivered under subsection 75 (1) for the taxation year for which the tax credit is claimed, the corporation has received, is entitled to receive or may reasonably be expected to be entitled to receive.

(2) The definitions of "eligible production", "Ontario labour expenditure" and "prescribed cost" in subsection 43.8 (17) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 22, are repealed and the following substituted:

eligible production" means a film or television production that satisfies the following conditions:

1. The production is produced for commercial exploitation.

2. The production is not described in any of subparagraphs (b) (i) to (xi) of the definition of "excluded production" in subsection 1106 (1) of Schedule 1 to Ontario Regulation 322/97 ("Ontario Film and Television Tax Credit") made under this Act.

3. It is not a production for which, in the opinion of the Minister of Citizenship, Culture and Recreation, public financial support would be contrary to public policy.

4. If principal photography for the production commences before November 1, 1997, it is not a variety production, educational or instructional production or programming in a magazine format.

5. If the production is a television production that is not directed primarily at children, the production is suitable for initial broadcast in a standard television time slot of at least 30 minutes or, if the production consists of two or more episodes, each episode of the production is suitable for initial broadcast in a standard television time slot of at least 30 minutes; ("production admissible") "

Ontario labour expenditure" of a qualifying corporation in respect of an eligible production means the amount determined under the rules prescribed by the regulations; ("dépense de main-d'oeuvre en Ontario")

prescribed cost" means, in respect of an eligible production, the amount determined under the rules prescribed by the regulations. ("coût prescrit")

(3) The definition of "government assistance" in subsection 43.8 (17) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 22, is amended by adding the following clause:

(a.1) an Ontario production services tax credit under section 43.10.

17. The Act is amended by adding the following section:

Ontario production services tax credit

43.10 (1) A corporation that is a qualifying corporation for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable under this Part for the taxation year, after making all deductions claimed under sections 39, 40, 41, 43 and 43.2 to 43.9 for the taxation year, an amount not exceeding the amount of its Ontario production services tax credit for the taxation year.

Same

(2) A corporation that is a qualifying corporation for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable for the year under Parts III and IV of the Act an amount not exceeding the amount by which its Ontario production services tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corporation for the year under subsection (1).

Amount of tax credit

(3) The amount of a qualifying corporation's Ontario production services tax credit for a taxation year is the sum of the corporation's eligible credits for the taxation year in respect of eligible productions.

Eligible credit

(4) A qualifying corporation's eligible credit for a taxation year in respect of an eligible production is 11 per cent of its qualifying Ontario labour expenditure in respect of the production for the taxation year.

Exception

(5) Despite subsection (4), a qualifying corporation's eligible credit for a taxation year in respect of an eligible production is nil if the corporation claims a tax credit for any taxation year under section 43.5 in respect of the production, unless no tax credit under section 43.5 in respect of the production is allowed.

Application for certificate

(6) In order to be eligible to deduct or claim an amount in respect of an Ontario production services tax credit under this section with respect to a particular production, a qualifying corporation shall apply to the Ontario Film Development Corporation, or to another person designated by the Minister of Citizenship, Culture and Recreation, for certification that the production is an eligible production for the purposes of this section.

Same

(7) A qualifying corporation that applies for certification shall provide the information specified for the purposes of this section by the Ontario Film Development Corporation or the person designated by the Minister of Citizenship, Culture and Recreation to the person who specified that it be provided.

Certificate

(8) The Ontario Film Development Corporation or the person designated by the Minister of Citizenship, Culture and Recreation shall issue to the qualifying corporation a certificate and any amended certificates,

(a) if the particular production is an eligible production for the purposes of this section; and

(b) if the qualifying corporation,

(i) has not claimed a tax credit in respect of the production under section 43.5, or

(ii) has claimed a tax credit in respect of the production under section 43.5 which was not allowed on assessment or reassessment by the Minister, and the corporation has not objected to the assessment or reassessment on the issue of the disallowance of the tax credit under section 43.5 in respect of the production.

Same

(9) Each certificate issued under subsection (8) must certify that the particular production is an eligible production for the purposes of this section and certify the estimated amount of the corporation's eligible credit for the production for the purposes of this section.

Certificate to be delivered with return

(10) In order to deduct or claim an amount under this section for a taxation year in respect of a particular production, a qualifying corporation must deliver to the Minister with its return for the taxation year the certificate most recently issued in respect of the production or a certified copy of the certificate.

Deemed tax payment

(11) A qualifying corporation shall be deemed to pay on account of its tax payable under this Act for a taxation year an amount claimed by the corporation not exceeding the amount, if any, by which the corporation's Ontario production services tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corporation under subsections (1) and (2) in determining its tax payable under this Act for the taxation year.

Time of deemed payment

(12) A qualifying corporation shall be deemed to make the payment referred to in subsection (11) and the Minister shall be deemed to apply the deemed payment on the day on or before which the corporation would be required under clause 78 (2) (b) to pay any balance of tax payable for the taxation year.

Revocation of certificate

(13) A certificate or amended certificate issued under subsection (8) may be revoked,

(a) if an omission or incorrect statement was made for the purpose of obtaining the certificate;

(b) if the production is not an eligible production;

(d) if a certificate in respect of the production is issued to the corporation under subsection 43.5 (9).

Same

(14) A certificate that is revoked shall be deemed never to have been issued.

Application

(15) This section applies with respect to qualifying Ontario labour expenditures incurred after October 31, 1997.

Definitions

(16) In this section, "

eligible production" means a film or television production that satisfies the conditions prescribed by the regulations; ("production admissible")

qualifying corporation" means a corporation that satisfies the conditions prescribed by the regulations; ("corporation admissible")

qualifying Ontario labour expenditure" means the amount determined under the rules prescribed by the regulations. ("dépense de main-d'oeuvre admissible en Ontario")

18. (1) Subsection 44.1 (4) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 24, section 27 and amended by 1996, chapter 29, section 51 and 1997, chapter 43, Schedule A, section 24, is further amended by adding the following paragraph:

9. An Ontario production services tax credit under section 43.10.

(2) Subsection 44.1 (5) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 24 is repealed and the following substituted:

When assistance received

(5) For the purposes of this Act, other than sections 43.3 to 43.10, the following amounts are assistance deemed to be received by a corporation from a government immediately before the end of a taxation year:

1. All amounts that the corporation deducts under sections 43.3 to 43.10 in determining the amount of its tax payable under this Act for the taxation year.

2. All amounts that the corporation is deemed under those sections to have paid on account of its tax payable under this Act for the taxation year.

19. Clause 62 (1) (c) of the Act, as amended by the Statutes of Ontario, 1994, chapter 14, section 26, 1997, chapter 19, section 4 and 1997, chapter 43, Schedule A, section 32, is further amended by striking out "(d) and (e)" in the fifth line and in the thirteenth line and substituting in each case "(d), (e) and (f)".

20. (1) Clause 66.1 (4) (a) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 36, is amended by striking out "qualifying small business corporation or qualifying small business" in the fourth, fifth and sixth lines and substituting "qualifying small business corporation, qualifying small business or community small business investment fund corporation".

(2) Paragraph 2 of subsection 66.1 (4.8) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 36, is repealed and the following substituted:

2. Where the investment was issued for consideration not exceeding $100,000, the tax credit amount in respect of the investment is the amount determined in accordance with the following formula:

A = { B 20 % + [ B 55 % the greater

A = B 20 % + [B x 55 % 0 ou

of zero and ( 1 * C / $250,000 * E /

(1 * C/250 000 $ * E/50 000 $), selon le plus

$50,000 ) ] } ( 1 * D / $4,000,000 )

élevé de ces montants] (1 * D/4 000 000 $)

(3) Subsection 66.1 (4.10) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 36, is amended by,

(a) striking out "does not exceed" in the third line of paragraph 1 and substituting "is less than"\; and

(b) striking out "may not exceed" in the fifth line of paragraph 2 and substituting "must be less than".

21. Subsection 76 (6) of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 1, Schedule B, section 10 and amended by 1996, chapter 1, Schedule B, section 10, 1996, chapter 24, section 28 and 1997, chapter 43, Schedule A, section 44, is further amended by adding the following clause:

(j) the amount, if any, by which,

(i) the amount that would be deemed by section 43.10 to be paid for the year by the corporation if that amount were calculated by reference to the amount of the tax credit claimed by the corporation for the year under that section as a payment made on account of its tax for the year,

exceeds,

(ii) the maximum amount that the corporation is entitled to claim for the year under section 43.10 as a deemed payment on account of its tax payable for the year.

22. (1) Clause 78 (5) (b) of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 24, section 29 and amended by 1997, chapter 43, Schedule A, section 45, is further amended by striking out "any of sections 43.2 to 43.9" in the amendment of 1997 and substituting "any of sections 43.2 to 43.10".

(2) Clause 78 (6) (a) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 45, is repealed and the following substituted:

(a) the tax payable by the corporation for the taxation year is less than $2,000 after deducting all amounts, if any, deemed under any of sections 43.2 to 43.10 to be tax paid by the corporation for the taxation year and the amount, if any, of its capital gains refund as determined under section 48 for the taxation year.

23. Clause 80 (1) (b.1) of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 24, section 30 and amended by 1997, chapter 43, Schedule A, section 46, is further amended by striking out "43.8 or 43.9" in the amendment of 1997 and substituting "43.8, 43.9 or 43.10".

Commencement

24. (1) Subject to subsection (2), this Part comes into force on the day this Act receives Royal Assent.

(2) The following provisions come into force on the date indicated:

1. Subsection 13 (2) shall be deemed to have come into force on May 8, 1996.

2. Section 7 and subsections 15 (1), 16 (1) and (2) and 20 (1) and (2) shall be deemed to have come into force on May 7, 1997.

3. Subsection 8 (2) shall be deemed to have come into force on September 1, 1997.

4. Subsections 13 (1) and (3) to (10), section 14, subsection 16 (3) and sections 17, 18, 21, 22 and 23 shall be deemed to have come into force on November 1, 1997.

5. Sections 10, 11 and 12 shall be deemed to have come into force on May 5, 1998.

PART III

HIGHWAY TRAFFIC ACT

25. (1) Section 53 of the Highway Traffic Act, as amended by the Statutes of Ontario, 1997, chapter 12, section 7, is further amended by adding the following subsection:

Same

(2.1) Where a person who has previously been convicted of an offence under subsection (1.1) is convicted of the same offence within five years after the date of the previous conviction, the offence for which he or she is last convicted shall be deemed to be a subsequent offence for the purpose of clause (1.1) (b).

(2) Subsection 53 (3) of the Act is amended by inserting "or (1.1)" after "subsection (1)" in the second line.

26. Section 144 of the Act, as amended by the Statutes of Ontario, 1994, chapter 27, section 138 and 1996, chapter 33, section 14, is further amended by adding the following subsection:

Penalty for disobeying red or amber light

(31.2) Every person who contravenes subsection (15) or (18) is guilty of an offence and on conviction is liable to a fine of not less than $150 and not more than $500.

27. Section 146 of the Act is amended by adding the following subsection:

Penalty for disobeying red or amber light

(6.1) Every person who contravenes subsection (3) or (4) is guilty of an offence and on conviction is liable to a fine of not less than $150 and not more than $500.

Commencement

28. This Part comes into force on a day to be named by proclamation of the Lieutenant Governor.

PART IV

LAND TRANSFER TAX ACT

29. Section 1 of the Land Transfer Tax Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 4, 1996, chapter 18, section 7, 1996, chapter 29, section 16 and 1997, chapter 10, section 8, is further amended by adding the following subsections:

Reduction of consideration, land taken under statutory authority

(2) Where it is established to the satisfaction of the Minister that land is being acquired by a person for the purpose of replacing land that was taken from the person under statutory authority, that was sold by the person to a person by whom notice of an intention to take the land under statutory authority was given, or that was sold by the person to a person having the power to take the land under statutory authority, and it is reasonable to assume in the case where the land is sold that, had the land not been sold, it would have been taken under statutory authority by the person to whom it is sold, the value of the consideration for the land being acquired shall be reduced by an amount equal to the compensation or proceeds of sale reasonably attributable to the land that was taken or sold.

Same, leasehold and freehold interests

(3) Where a person entitled to the leasehold interest in land acquires the freehold interest therein, the value of the consideration for the conveyance to the person of the freehold interest may be reduced by the amount of the value of the consideration for the conveyance by which the person acquired the leasehold interest if the value of that consideration was determined under clause (c) of the definition of "value of the consideration" in subsection (1) and tax was computed and paid with respect to the value of that consideration so determined, but the reduction shall not exceed the value of the consideration for the conveyance of the freehold interest.

30. (1) Subsection 9.2 (2) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 10, section 17, is amended,

(a) by striking out "March 31, 1998" in the seventh line and substituting "March 31, 1999"\; and

(b) by striking out "December 31, 1998" in the last line and substituting "December 31, 1999".

(2) Subsection 9.2 (5) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 10, section 17, is amended by striking out "December 31, 1999" at the end and substituting "December 31, 2000".

Commencement

31. (1) Subject to subsections (2) and (3), this Part comes into force on the day this Act receives Royal Assent.

(2) Section 29 shall be deemed to have come into force on May 7, 1997.

(3) Section 30 shall be deemed to have come into force on April 1, 1998.

PART V

ONTARIO LOAN ACT, 1998

32. The Ontario Loan Act, 1998, as set out in Schedule A, is hereby enacted.

Commencement

33. This Part comes into force on the day this Act receives Royal Assent.

PART VI

ONTARIO LOTTERY CORPORATION ACT

34. The definitions of "video lottery" and "video lottery terminal" in section 1 of the Ontario Lottery Corporation Act, as enacted by the Statutes of Ontario, 1996, chapter 26, section 6, are repealed.

35. (1) Subsection 8.1 (2) of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 26, section 6, and subsections (3) to (5) as enacted by the Statutes of Ontario, 1996, chapter 26, section 6, are repealed and the following substituted:

Exception

(2) A person does not contravene subsection (1),

(a) if the person sells a lottery ticket to a person relying on documentation of a prescribed type; and

(b) if there is no apparent reason to doubt the authenticity of the documentation or to doubt that it was issued to the person producing it.

(2) Subsection 8.1 (7) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 26, section 6, is repealed.

36. (1) Subsection 8.2 (1) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 26, section 6, is amended by striking out "or (2)" in the second line.

(2) Subsection 8.2 (2) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 26, section 6, is amended by striking out "8.1 (3) or (6)" in the second line and substituting "8.1 (6)".

37. Section 8.3 of the Act, as enacted by the Statutes of Ontario, 1996, chapter 26, section 6, is repealed and the following substituted:

Authorized payments

8.3 (1) The Corporation may make the following payments from its revenues:

1. Payments for prizes.

2. Payments for the operating expenses of the Corporation.

3. Payments made under agreements approved by the Minister of Finance for the distribution by the Corporation of proceeds of lottery schemes,

i. to or for the benefit of charitable organizations and non-profit corporations, or

ii. for the support of other activities and programs for the benefit of the people of Ontario.

Required payments

(2) An agreement referred to in paragraph 3 of subsection (1) shall provide that, in each fiscal year of Ontario, the Corporation shall use at least one-half of the net revenue it receives during the year from the table gaming activities described in subsection (4) to make payments described in paragraph 3 of subsection (1).

Same

(3) If, in any fiscal year of Ontario, one-half of the net revenue that the Corporation receives from the table gaming activities described in subsection (4) exceeds the total of the payments described in paragraph 3 of subsection (1) made by the Corporation in the fiscal year, the Corporation shall, in the following fiscal year, pay the excess to or among the organizations, corporations, activities and programs described in paragraph 3 of subsection (1) in such amounts as the Minister of Finance directs, and shall not expend the excess for any other purpose.

Table gaming

(4) For the purposes of subsections (2) and (3), the Minister responsible for the administration of this Act may, by regulation,

(a) prescribe the activities that constitute table gaming; and

(b) prescribe the classes of persons or entities whose table gaming activities are to be considered in calculating the net revenue of the Corporation received from table gaming activities.

38. Section 9 of the Act, as amended by the Statutes of Ontario, 1996, chapter 26, section 6, is repealed and the following substituted:

Net profits

9. (1) The net profits of the Corporation, after payments referred to in section 8.3, shall be paid into the Consolidated Revenue Fund at such times and in such manner as the Minister of Finance may direct and are available for appropriation by the Legislature for any of the following purposes:

1. The promotion and development of physical fitness, sports, recreational and cultural activities and for facilities therefor.

2. The activities of the Ontario Trillium Foundation.

3. The protection of the environment.

4. The provision of health care, including the operating of hospitals.

5. The activities and objectives of charitable organizations and non-profit corporations.

6. The funding of community activities and programs.

Unappropriated amounts

(2) The net profits of the Corporation paid into the Consolidated Revenue Fund in a fiscal year of Ontario under subsection (1) and not appropriated in the fiscal year for one or more of the purposes set out in that subsection shall be applied to, and accounted for in the Public Accounts of Ontario as part of, the money appropriated by the Legislature in the fiscal year for the operation of hospitals.

39. Subsection 10 (1) of the Act is amended by striking out "Treasurer of Ontario" in the second and third lines and substituting "Minister of Finance".

40. Subsection 12 (1) of the Act is repealed and the following substituted:

Annual report

(1) The Corporation shall make a report annually to the Minister upon the affairs of the Corporation.

Same

(1.1) The report must set out all payments made by the Corporation under any agreement referred to in paragraph 3 of section 8.3 and the amount of net revenue that the Corporation received from the table gaming activities described in subsection 8.3 (4).

Same

(1.2) The Minister shall submit the report to the Lieutenant Governor in Council and shall then lay the report before the Assembly if it is in session or, if not, at the next session.

Commencement

41. This Part comes into force on the day this Act receives Royal Assent.

PART VII

RETAIL SALES TAX ACT

42. (1) The definition of "returning resident" in subsection 2.2 (1) of the Retail Sales Tax Act, as enacted by the Statutes of Ontario, 1997, chapter 10, section 31, is amended by striking out the portion after subclause (b) (iii) and substituting the following:

but does not include the holder of a certificate of Indian status issued by the Government of Canada who provides a declaration that the specified tangible personal property is being imported for use or consumption on a reserve (as defined by the Indian Act (Canada)) by an Indian, a band or the council of a band (as those terms are defined by that Act).

(2) The definition of "specified tangible personal property" in subsection 2.2 (1) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 10, section 31, is repealed and the following substituted:

specified tangible personal property" means tangible personal property (including such tangible personal property as the Minister may prescribe to be specified tangible personal property) other than,

(a) vehicles, as defined by the Minister,

(b) tangible personal property that, if purchased in Ontario by the returning resident, would be exempt from tax under this Act, or

(c) tangible personal property prescribed by the Minister to be property that is not specified tangible personal property. ("bien meuble corporel précisé")

43. Subsections 2.3 (6) and (7) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 10, section 31, are repealed and the following substituted:

Application for refund

(6) Subject to clause 2.5 (4) (b), a returning resident may apply under subsection 2 (11) for a refund of an amount paid under this section as tax that is not payable as tax.

44. Clause 2.5 (4) (b) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 10, section 31, is repealed and the following substituted:

(b) to refund an amount charged or collected by a collection agent that is in excess of the amount of tax payable in respect of the specified tangible personal property.

45. (1) Paragraph 2.2 of subsection 7 (1) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 18, section 17, is repealed and the following substituted:

2.2 1-800, 1-877 and 1-888 telephone services, except the telephone services that the Minister prescribes as ones that are excluded for the purposes of the exemption under this paragraph.

(2) Subsection 7 (1) of the Act, as amended by the Statutes of Ontario, 1992, chapter 13, section 4, 1994, chapter 13, section 9, 1996, chapter 18, section 17, 1996, chapter 29, section 26, 1997, chapter 10, section 32 and 1997, chapter 41, section 125, is further amended by adding the following paragraph:

28. Local telephone service when purchased with one or more coins at a pay telephone for a total charge not exceeding 25 cents.

(3) Paragraph 38 of subsection 7 (1) of the Act is repealed and the following substituted:

38. Equipment, as defined by the Minister, that is purchased for use exclusively by one of the following, and repairs made to such equipment:

i. The Ontario Cancer Treatment and Research Foundation,

ii. a hospital approved as a public hospital under the Public Hospitals Act,

iii. a hospital approved or established as a community psychiatric hospital under the Community Psychiatric Hospitals Act,

iv. a facility approved or established as a psychiatric facility under the Mental Health Act.

46. (1) Subsection 9 (3) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule D, section 5, is repealed and the following substituted:

Exemption from tax, hospital restructuring

(3) The tax imposed by subsection 2 (1) or section 4.2 is not payable by any of the following hospitals or facilities on its acquisition of tangible personal property from another such hospital or facility as a result of an amalgamation or closure of the hospital or facility or on the transfer of a program from another such hospital or facility:

1. A hospital approved as a public hospital under the Public Hospitals Act.

2. A hospital approved or established as a community psychiatric hospital under the Community Psychiatric Hospitals Act.

3. A facility approved or established as a psychiatric facility under the Mental Health Act.

(2) Subsection 9 (4) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule D, section 5, is amended by inserting after "local board" in the seventh line "or from the Crown or an agency thereof".

47. Clause 48 (3) (m) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 18, section 18 and amended by 1997, chapter 10, section 34, is further amended by striking out "March 31, 1998" in the sixth line and substituting "March 31, 1999".

Commencement

48. (1) Subject to subsections (2), (3) and (4), this Part comes into force on the day this Act receives Royal Assent.

(2) Section 47 shall be deemed to have come into force on April 1, 1998.

(3) Subsection 45 (1) shall be deemed to have come into force on April 5, 1998.

(4) Subsections 45 (2) and 46 (2) shall be deemed to have come into force on May 6, 1998.

PART VIII

TOBACCO TAX ACT

49. Section 4 of the Tobacco Tax Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8, is further amended by adding the following subsections:

Conditions

(1.1) The Minister may impose such conditions and restrictions with respect to a designation under subsection (1) as the Minister considers appropriate.

Termination

(1.2) In addition to any other grounds upon which the Minister may terminate a person's designation under subsection (1), he or she may terminate the designation if the person has not sold or delivered tobacco products for a period of six consecutive months.

Commencement

50. This Part comes into force on the day this Act receives Royal Assent.

PART IX

COMMENCEMENT AND SHORT TITLE

Commencement

51. (1) Subject to subsection (2), this Act comes into force on the day it receives Royal Assent.

Same

(2) Parts I to VIII of this Act provide for their own commencement.

Short title

52. The short title of this Act is the Tax Cuts for People and for Small Business Act, 1998.

SCHEDULE A

ONTARIO LOAN ACT, 1998

Borrowing authorized

1. (1) The Lieutenant Governor in Council may borrow in any manner provided by the Financial Administration Act such sums, not exceeding a total aggregate amount of $4.6 billion, as are considered necessary to discharge any indebtedness or obligation of Ontario, to make any payment authorized or required by any Act to be made out of the Consolidated Revenue Fund or to reimburse the Consolidated Revenue Fund for money expended for any of such purposes.

Other Acts

(2) The authority to borrow conferred by this Act is in addition to that conferred by any other Act.

Expiry

2. No order in council authorizing borrowing under this Act shall be made after December 31, 1999.

Commencement

3. This Act comes into force on the day the Tax Cuts for People and for Small Business Act, 1998 receives Royal Assent.

Short title

4. The short title of this Act is the Ontario Loan Act, 1998.

Office of the Legislative Assembly of Ontario

Toronto, Ontario, Canada.