[37] Bill 152 Royal Assent (PDF)

Bill 152

Bill 1522000

An Act to implement the

2000 Budget to establish a

made-in-Ontario tax system

and to amend various Acts

contents

Part I

Part II

Part III

Part IV

Part V

Part VI

Part VII

Part VIII

Part IX

Part X

Part XI

Part XII

Part XIII

Part XIV

Part XV

Schedule

Community Small Business Investment Funds Act

Corporations Tax Act

Electricity Act, 1998

Employer Health Tax Act

Income Tax Act

Land Transfer Tax Act

Mining Tax Act

Ministry of Treasury and Economics Act

Northern Ontario Heritage Fund Act

Northern Services Boards Act

Ontario Guaranteed Annual Income Act

Ontario Home Ownership Savings Plan Act

Retail Sales Tax Act

Tobacco Tax Act

Schedule, Commencement and Short Title

Professional Corporations

______________

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

Part I

community small business

investment funds act

1. (1) Subsection 1 (1) of the Community Small Business Investment Funds Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 76, 1997, chapter 43, Schedule C, sections 2 and 23, 1998, chapter 34, section 12 and 1999, chapter 9, section 50, is further amended by adding the following definitions: "

qualifying trust" has the same meaning as in subsection 127.4 (1) of the Income Tax Act (Canada); ("fiducie admissible") "

research oriented investment fund" means, with respect to a calendar year, a labour sponsored investment fund corporation that meets the requirements set out in subsection 16.1 (2). ("fonds d'investissement ax sur la recherche")

(2) Subsection 1 (1) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 76, 1997, chapter 43, Schedule C, sections 2 and 23, 1998, chapter 34, section 12 and 1999, chapter 9, section 50, is further amended by adding the following definition: "

common-law partner" has the meaning given to it in subsection 248 (1) of the Income Tax Act (Canada). ("conjoint de fait")

2. (1) Sub-subclause 6 (1) (e) (i) (C) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 80, is further amended by inserting "or common-law partner" after "spouse".

(2) Subclause 6 (1) (e) (iii) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 80, is further amended by inserting "or common-law partner" after "spouse" in the portion before sub-subclause (A).

(3) Sub-subclause 6 (1) (e) (iii) (A) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 80, is further amended by inserting "or common-law partner" after "spouse".

(4) Sub-subclause 6 (1) (e) (iii) (C.1) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 17, section 80, is amended by inserting "or common-law partner" after "spouse".

3. (1) The definition of "eligible investor" in subsection 12 (1) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 17, section 82, is repealed and the following substituted: "

eligible investor" means, in respect of a particular Class A share of a corporation registered under this Part,

(a)an individual who subscribes for the share, but not an individual who is a trust,

(b)an individual who is an annuitant (as defined in subsection 146 (1) of the Income Tax Act (Canada)) of a qualifying trust that subscribes for the share, or

(c)a spouse of an individual described in clause (b). ("investisseur admissible")

(2) Clause (c) of the definition of "eligible investor" in subsection 12 (1) of the Act, as enacted by subsection (2), is repealed and the following substituted:

(c)a spouse or common-law partner of an individual described in clause (b).

(3) Subsection 12 (1) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 82, 1997, chapter 43, Schedule C, section 5 and 1999, chapter 9, section 52, is further amended by adding the following definitions: "

eligible investment in a research business" means, with respect to a particular labour sponsored investment fund corporation, an investment described in subsection (3); ("investissement admissible dans une entreprise de recherche") "

scientific research and experimental development expenses" means, with respect to expenses incurred by an entity in a fiscal year, the total of all expenses incurred by the entity in the year that are described in subparagraph 37 (1) (a) (i), (i.1) or (ii) or 37 (1) (b) (i) or (ii) of the Income Tax Act (Canada). ("dpenses affrentes aux activits de recherche scientifique et de dveloppement exprimental")

(4) Section 12 of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 82, 1997, chapter 43, Schedule C, section 5 and 1999, chapter 9, section 52, is further amended by adding the following subsections:

Eligible investment in

a research business

(3) For the purposes of this Part, an eligible investment in a research business by a labour sponsored investment corporation for a particular calendar year is an investment by the corporation in an entity that is a taxable Canadian corporation or a Canadian partnership and with respect to which the circumstances described in one or more of the following paragraphs exist:

1.At least 50 per cent, or such other percentage as may be prescribed, of the total expenses incurred by the entity during the entity's most recent fiscal year ending before the day on which the investment was made and for which financial statements are available are scientific research and experimental development expenses.

2.If the entity was established in the calendar year or in the previous calendar year, or if it first began business in one of those calendar years,

i.the entity undertakes to incur scientific research and experimental development expenses in the fiscal year in which the investment is made, or in the following fiscal year, in an amount equal to at least 50 per cent, or such other percentage as may be prescribed, of its total expenses for the year, and

ii.the labour sponsored investment fund corporation accepts the undertaking.

3.The entity fulfilled an undertaking given in a previous year under paragraph 2.

4.The entity was formed to exploit intellectual property developed by a Canadian institution that is a university, college, research institute, hospital or other prescribed research institution and,

i.at least 10 per cent of the voting equity capital of the entity or 10 per cent of the value of all partnership interests in the entity, as the case may be, are held by a Canadian institution that is a university, college, research institute, hospital or other prescribed research institution, and

ii.the amount of the scientific research and experimental development expenses incurred by the entity in the entity's fiscal year in which the labour sponsored investment fund corporation makes its investment is equal to at least 50 per cent or such other percentage as may be prescribed of the amount invested by the corporation in the entity in the fiscal year.

Date of Class A share redemption

(4) For the purpose of sections 14 and 14.1, when determining the date on which a Class A share of a labour sponsored investment fund corporation that was issued in February or March is redeemed, a redemption that occurs in February or on March 1 shall be deemed to occur on March 31.

Capital available for investment

(5) For the purposes of this Part, a labour sponsored investment fund corporation's capital available for investment at a particular time is the amount, if any, by which "A" exceeds "B" where, "

A"is the total cost of all investments and property held by the corporation at that time, each of which was an eligible investment as defined in section 18 or in subsection 204.8 (1) of the Income Tax Act (Canada) at the time the investment was made or is property maintained in a reserve as defined in subsection 19 (2), and "

B"is 20 per cent of the net value of the corporation's total assets at that time.

4. (1) Sub-subclause 14 (1) (e) (i) (C) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 84, is further amended by inserting "or common-law partner" after "spouse".

(2) Subclause 14 (1) (e) (iii) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 84, is further amended by inserting "or common-law partner" after "spouse" in the portion before sub-subclause (A).

(3) Sub-subclause 14 (1) (e) (iii) (A) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 17, section 84, is amended by inserting "or common-law partner" after "spouse".

(4) Sub-subclause 14 (1) (e) (iii) (B.2) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 17, section 84, is amended by inserting "or common-law partner" after "spouse".

5. (1) Subclause 14.1 (1) (a) (iv) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 7, is amended by inserting "or common-law partner" after "spouse" in the portion before sub-subclause (A).

(2) Clause 14.1 (1) (c) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 7, is amended by inserting "or common-law partner" after "spouse" in the portion before subclause (i).

(3) Sub-subclause 14.1 (1) (c) (ii) (A) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 7, is amended by inserting "or common-law partner" after "spouse".

(4) Sub-subclause 14.1 (1) (c) (ii) (E) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 7, is amended by inserting "or common-law partner" after "spouse".

(5) Section 14.1 of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 7, is amended by inserting the following subsections:

Alternative version of amendment

(1.1) A labour sponsored investment fund corporation may amend its articles to provide that if, in a year, the corporation issues Class A shares as a research oriented investment fund and if tax credit certificates are issued under this Act in respect of those shares, the corporation may redeem such a share only if all of the following circumstances exist:

1.The holder of the share makes a written request to the corporation to redeem the share.

2.The holder of the share meets such other conditions as may be prescribed.

3.The redemption either occurs more than eight years after the date on which the share was issued or it occurs earlier than that in circumstances other than those described in subclause (1) (a) (ii), (iii) or (iv) and,

i.the holder of the share receives an amount on the redemption that does not exceed the amount that would otherwise have been payable on the redemption less 20 per cent, or such other percentage as may be prescribed, of the lesser of,

A.the value of the consideration received by the corporation on the issuance of the share, or

B.the amount that would otherwise have been payable on the redemption of the share, and

ii.the corporation remits to the Minister an amount equal to the amount required under subparagraph i to be deducted from the amount otherwise payable on redemption of the share.

Same

(1.2) The provision described in subsection (1.1) is to be included in the articles of incorporation instead of the provisions described in clause 14 (1) (e) and in addition to the provisions described in subsection (1).

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

Research oriented investment fund

16.1 (1) A labour sponsored investment fund corporation that intends to issue shares as a research oriented investment fund in a calendar year after 2000 shall give notice of its intention to the Minister in a form approved by the Minister and shall do so by the end of the preceding year.

Status of corporation

(2) A labour sponsored investment fund corporation that has given the notice required by subsection (1) for a calendar year is a research oriented investment fund during that year,

(a)if the articles of the corporation contain the provision described in subsection 14.1 (1.1) or are deemed under subsection (4) to do so;

(b)if the corporation complied with the investment requirements and restrictions set out in sections 17 and 18.1 in the preceding year;

(c)if the corporation conducted its business and affairs in accordance with this Act in the preceding year; and

(d)if the aggregate cost of the corporation's investments, each of which is an eligible investment in a research business that was held at the end of the preceding year, is equal to at least 50 per cent, or such other percentage as may be prescribed, of its capital available for investment at the end of that year or if, instead, the corporation gives the undertaking described in subsection (5).

Penalty for unauthorized issuance

(3) If a labour sponsored investment fund corporation issues a Class A share as a research oriented investment fund during a calendar year but did not meet the requirements set out in subsection (2) when it did so, the corporation shall pay a penalty to the Minister equal to 10 per cent of the value of the consideration received on its issuance.

Deemed compliance, articles of incorporation

(4) For the purposes of clause (2) (a), the articles of the labour sponsored investment fund corporation shall be deemed to contain the provision described in subsection 14.1 (1.1) if the corporation gives a written undertaking to the Minister that it will pay a penalty to the Minister equal to 5 per cent of the value of the consideration received on the issuance of a Class A share that was issued when the corporation was a research oriented investment fund but only if the share is redeemed within eight years after the date on which it is issued other than in the circumstances described in subclauses 14.1 (1) (a) (ii), (iii) or (iv).

Undertaking re investments

(5) For the purposes of clause (2) (d), a labour sponsored investment fund corporation that has not made any investments may give the Minister a written undertaking that, before the end of the calendar year referred to in subsection (2), it will make one or more investments, each of which is an eligible investment in a research business and that the cost of those investments will equal at least 50 per cent, or such other percentage as may be prescribed, of the capital available for investment by the corporation at the end of that year.

Failure to comply with undertaking

(6) If a labour sponsored investment fund corporation fails to comply with its undertaking given under subsection (5), the corporation shall pay a penalty to the Minister equal to 10 per cent of the value of the consideration received on its issuance, during the applicable year, of Class A shares as a research oriented investment fund.

7. (1) Subsection 25 (3) of the Act, as amended by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 23, is repealed and the following substituted:

Part III corporation

(3) A labour sponsored investment fund corporation shall apply to the Minister on behalf of each eligible investor who has subscribed for a Class A share of the corporation during the calendar year or within 60 days after the end of the calendar year for a tax credit certificate in respect of an investment corporation tax credit to be claimed by an eligible investor in respect of that share under the Income Tax Act.

(2) Paragraph 6 of subsection 25 (4) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 21, is repealed and the following substituted:

6.The amount of the tax credit deductible in determining the amount of tax payable under the Income Tax Act for the 1998, 1999 or 2000 taxation year is the lesser of,

i.$750, and

ii.an amount equal to 15 per cent of the equity capital received by the corporation from the eligible investor, or from a qualifying trust for the eligible investor, after the end of the preceding taxation year and before the day that is 61 days after the end of the taxation year for Class A shares issued by the corporation, excluding any portion of the equity capital that was taken into consideration in determining the amount of a tax credit for the preceding year.

7.If the corporation is a research oriented investment fund during the calendar year in which it issues the Class A shares referred to in subsection (3), the amount of the tax credit deductible in determining the amount of tax payable under the Income Tax Act for any taxation year after 2000 is the lesser of,

i.$1,000, and

ii.an amount equal to 20 per cent of the equity capital received by the corporation from the eligible investor, or from a qualifying trust for the eligible investor, for Class A shares issued by the corporation that are purchased after the end of the preceding taxation year and before the day that is 61 days after the end of the taxation year, excluding any portion of the equity capital that was taken into consideration in determining the amount of a tax credit for the preceding year.

8.If the corporation is not a research oriented investment fund during the calendar year in which it issues the Class A shares referred to in subsection (3), the amount of the tax credit deductible in determining the amount of tax payable under the Income Tax Act for any taxation year after 2000 is the lesser of,

i.$750, and

ii.an amount equal to 15 per cent of the equity capital received by the corporation from the eligible investor, or from a qualifying trust for the eligible investor, for Class A shares issued by the corporation that are purchased after the end of the preceding taxation year and before the day that is 61 days after the end of the taxation year, excluding any portion of the equity capital that was taken into consideration in determining the amount of a tax credit for the preceding year.

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

Research investment incentive

25.0.1 (1) An eligible investor may apply for a research investment incentive if the investor, or a qualifying trust for the eligible investor, purchases Class A shares issued by a research oriented investment fund after 2000 and before March 2, 2001.

Application by eligible investor

(2) An application for a research investment incentive shall be made to the Minister and shall be in a form approved by the Minister.

Same, by corporation

(3) The Minister may authorize a labour sponsored investment fund corporation to apply on behalf of its shareholders for research investment incentives and may impose conditions with respect to the authorization.

Payment of incentive

(4) Subject to subsection (5), the Minister shall pay the research investment incentive to the eligible investor in an amount that is the lesser of,

(a)$250, and

(b)5 per cent of the amount paid by the eligible investor, or by the qualifying trust for the eligible investor, after 2000 and before March 2, 2001 to the labour sponsored investment fund corporation on the issue of the Class A shares.

Exception

(5) The Minister shall not pay the research investment incentive to the eligible investor if the Minister considers that the labour sponsored investment fund corporation that issued the Class A shares, or its directors, officers or shareholders, are conducting the business and affairs of the corporation in a manner that is contrary to the spirit and intent of this Act, whether or not this Act or the regulations have been contravened.

Commencement

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

Same

(2) Subsection 1 (2), section 2, subsection 3 (2), section 4 and subsections 5 (1), (2), (3) and (4) come into force on January 1, 2001.

Part II

corporations tax act

10. The definition of "member of his or her family" in subsection 1 (2) of the Corporations Tax Act is repealed and the following substituted: "

member of his or her family" means, with respect to an individual referred to in the definition of "family farm corporation" or "family fishing corporation" or in subclause 61 (5) (c) (i),

(a)his or her spouse or common-law partner,

(b)his or her child,

(c)his or her father, mother, grandfather or grandmother,

(d)his or her brother or sister or any lawful descendant of his or her brother or sister,

(e)the brother or sister of his or her father or mother or any lawful descendant of that uncle or aunt,

(f)the father or mother of his or her spouse or common-law partner,

(g)a brother or sister of his or her spouse or common-law partner or any lawful descendant of that brother or sister,

(h)the spouse or common-law partner of his or her child, or

(i)a person adopted by him or her under the Child and Family Services Act or a predecessor of that Act or the spouse, common-law partner or any lawful descendant of that person. ("membre de sa famille")

11. (1) Clause (a) of the definition of "Ontario allocation factor" in subsection 12 (1) of the Act, as amended by the Statutes of Ontario, 1998, chapter 5, section 7, 1998, chapter 34, section 29 and 1999, chapter 9, section 76, is further amended by striking out "any of sections 13, 13.1, 13.2, 13.3 and 13.4" in the amendment of 1999 and substituting "any of sections 13 to 13.5".

(2) Clause (b) of the definition of "Ontario allocation factor" in subsection 12 (1) of the Act, as amended by the Statutes of Ontario, 1998, chapter 5, section 7, 1998, chapter 34, section 29 and 1999, chapter 9, section 76, is further amended by striking out "any of sections 13, 13.1, 13.2, 13.3 and 13.4" in the amendment of 1999 and substituting "any of sections 13 to 13.5".

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

Educational technology tax incentive

13.5 (1) In this section, "

eligible course" means a course of study offered by an eligible educational institution that provides credit towards a post-secondary degree, diploma, certificate or an apprentice training program approved by the Director of Apprenticeships under the Apprenticeship and Certification Act, 1998 or the Trades Qualification and Apprenticeship Act\; ("cours admissible") "

eligible educational institution" means,

(a)a university or college of applied arts and technology in Ontario, whose enrolment is counted for the purposes of calculating its entitlement to annual operating grants from the Government of Ontario,

(b)the Michener Institute of Applied Health Sciences, or

(c)the Ontario College of Art and Design; ("tablissement d'enseignement autoris") "

eligible equipment" means the equipment described in subsection (14) and excludes the things described in subsection (15); ("matriel admissible") "

eligible learning technology" means,

(a)custom or pre-packaged computer programs for use primarily in delivering an eligible course to students or instructors,

(b)custom computer programs for use primarily in providing digital library services to students or instructors, or

(c)instructional aids consisting of collections of images, sounds or animated pictures that are archived and shared through the Internet and can be accessed and used in eligible courses; ("technologie d'apprentissage admissible") "

notional price" means, in respect of eligible equipment that is donated or sold or eligible learning technology that is donated, sold or licensed in a taxation year to an eligible educational institution,

(a)the lowest amount that the corporation would normally have charged in the year on a sale or licensing of the equipment or technology to a person dealing at arm's length with the corporation, if the corporation carries on a business of selling eligible equipment or selling or licensing eligible learning technology in the taxation year, or

(b)the cost to the corporation of the equipment or technology, in any other case; ("prix thorique") "

Ontario allocation factor" of a corporation for a taxation year has the meaning assigned by subsection 12 (1); ("coefficient de rpartition de l'Ontario") "

systems software" means a combination of computer programs and associated procedures, related technical documentation and data that,

(a)performs compilation, assembly, mapping, management or processing of other programs,

(b)facilitates the functioning of a computer system by other programs,

(c)provides service or utility functions such as media conversion, sorting, merging, system accounting, performance measurement, system diagnostics or programming aids,

(d)provides general support functions such as data management, report generation or security control, or

(e)provides general capability to meet widespread categories of problem solving or processing requirements where the specific attributes of the work to be performed are introduced mainly in the form of parameters. ("logiciel de systmes")

Incentive

(2) In computing its income from a business for a taxation year, a corporation may deduct an educational technology tax incentive in respect of eligible equipment that is donated or sold or eligible learning technology that is donated, sold or licensed to an eligible educational institution during the taxation year and after May 2, 2000.

Amount of incentive

(3) The amount of a corporation's educational technology tax incentive for a taxation year is the total of all amounts each of which is calculated, in respect of eligible equipment that is donated or sold or eligible learning technology that is donated, sold or licensed to an eligible educational institution in the taxation year, using the formula,

[ (A - B) ÷ C ] 0.15

in which, "

A"is the corporation's notional price for the equipment or technology, "

B"is the fair market value of the consideration, if any, paid or payable by the institution for the equipment or technology, and "

C"is the corporation's Ontario allocation factor for the taxation year.

Corporate partner

(4) A corporation that is a member of a partnership at the end of the corporation's taxation year may deduct the amount described in paragraph 3 in computing its income from a business for the taxation year in the circumstances described in paragraphs 1 and 2:

1.In a fiscal period of the partnership that ends in the taxation year of the corporation, the partnership donates or sells eligible equipment or donates, sells or licenses eligible learning technology to an eligible educational institution.

2.If the donation or sale had been made or the licence had been given by a corporation, the corporation would be entitled to claim a deduction under this section.

3.The amount deductible by the corporation is the amount that may reasonably be considered to be the corporation's share of the amount that the partnership would be entitled to deduct in respect of the donation, sale or licence, if the partnership were a corporation and if the partnership used the corporation's Ontario allocation factor for the taxation year.

Limited partner

(5) Despite subsection (4), no amount may be deducted under this section by a corporation with respect to a sale or donation of eligible equipment or a sale, donation or licence of eligible learning technology by a partnership in which the corporation is a limited partner.

Certificate

(6) An eligible educational institution shall issue a certificate to a corporation or partnership that donates or sells eligible equipment or that donates, sells or licenses eligible learning technology to it, stating that the equipment or technology is eligible equipment or eligible learning technology for the purposes of this section.

Same

(7) The certificate must be issued in a form and be given to the corporation or partnership in a manner approved by the Minister.

Status of certificate

(8) Unless otherwise directed by the Minister, the certificate forms part of the records and books of account required to be kept under section 94 by the corporation or partnership making the donation or sale or giving the licence.

Same

(9) A corporation is not entitled to claim a deduction under this section in respect of a donation, sale or licence unless the corporation retains a copy of the certificate in its records.

Minister's direction and order

(10) If an eligible educational institution issues one or more incorrect certificates,

(a)the Minister may direct the institution to cease issuing certificates under this section; and

(b)the Minister may order that all or some of the equipment that is donated or sold to the institution or all or some of the technology that is donated, sold or licensed to the institution is not eligible equipment or eligible learning technology for the purposes of this section.

Revocation

(11) The Minister may revoke a direction or order, or both, made under subsection (10) if the Minister is satisfied that the eligible educational institution will comply with the Minister's directions with respect to the accuracy, form and content of certificates given under this section.

Conditions

(12) The Minister may impose such conditions on the revocation of the direction and order under subsection (11) as he or she considers reasonable.

Effect of revocation

(13) Upon the revocation of a direction and order, the equipment or technology that would have otherwise been eligible equipment or eligible learning technology is, to the extent approved by the Minister, eligible equipment or eligible learning technology for the purposes of this section and may be certified as such by the educational institution.

Eligible equipment

(14) The following types of equipment are eligible equipment for the purposes of the educational technology tax incentive:

1.Computer, electronic and telecommunications equipment that has never been used before, including any systems software essential to the operation of the equipment, and that is to be used primarily to enhance and expand delivery of an eligible course by enabling better communication between instructors and students or between students, either inside or outside the classroom.

2.Instructional equipment or tools that have never been used before, including any specialized supplies and systems software essential to the operation of the equipment or tools, and that are to be used primarily for the delivery of an eligible course.

Exclusions from eligible equipment

(15) The following things are not eligible equipment for the purposes of the educational technology tax incentive:

1.Office or classroom furniture.

2.Fixtures, wiring or components that are part of a building or structure.

3.Fibre optic cable.

4.A personal or laptop computer that a student will own after completing the eligible course.

5.Maintenance equipment.

6.Books.

13. Sub-subclause 14 (5) (e) (i) (E) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 79, is repealed and the following substituted:

(E)under section 13.4 in respect of the corporation's share of the capital costs incurred by the partnership in the fiscal period,

(F)under section 13.5 in respect of the corporation's share of the amount described in subsection 13.5 (4), as determined under that subsection, and

. . . . .

14. (1) Clause 35 (1) (a) of the Act, as amended by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 16, 1998, chapter 34, section 37 and 1999, chapter 9, section 80, is further amended by striking out "13.3 and 13.4" in the amendment of 1999 and substituting "13.3, 13.4 and 13.5".

(2) Subsection 35 (2) of the Act, as amended by the Statutes of Ontario, 1998, chapter 5, section 9, 1998, chapter 34, section 37 and 1999, chapter 9, section 80, is further amended by striking out "13.3 and 13.4" in the amendment of 1999 and substituting "13.3, 13.4 and 13.5".

(3) Subsection 35 (3) of the Act, as amended by the Statutes of Ontario, 1998, chapter 5, section 9, 1998, chapter 34, section 37 and 1999, chapter 9, section 80, is further amended by striking out "13.3 and 13.4" wherever it appears and substituting in each case "13.3, 13.4 and 13.5".

15. Section 43 of the Act, as amended by the Statutes of Ontario, 1992, chapter 3, section 10, 1994, chapter 14, section 16, 1998, chapter 5, section 12 and 2000, chapter 10, section 6, is further amended by adding the following subsection:

Transition, electricity corporation

(1.1) Despite subsection (1), for a corporation that generates electrical energy for sale or produces steam for use in the generation of electrical energy for sale, the amount that may be deducted by the corporation for a taxation year ending after December 31, 1998 on its eligible Canadian profits from the generation of electrical energy for sale or the production of steam for use in the generation of electrical energy for sale is the amount that would be determined under subsection (1) if the reference in that subsection to "2 per cent" were read as the total of,

(a)0.5 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;

(b)1 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 1999 and before January 1, 2001 to the total number of days in the taxation year;

(c)1.5 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2000 and before January 1, 2002 to the total number of days in the taxation year; and

(d)2.0 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2001 to the total number of days in the taxation year.

16. (1) Subsection 43.5 (4.1) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 5, section 13, is amended by striking out "and" at the end of clause (a), by inserting "and" at the end of clause (b) and by adding the following clause:

(c)if the production is a regional Ontario production, 10 per cent of the amount by which "A" exceeds "B" where, "

A"is that portion of the company's qualifying labour expenditure for the taxation year for the production that is related to expenditures that are incurred after May 2, 2000 and included in the Ontario labour expenditure for the taxation year in respect of the production, and "

B"is that portion of the company's qualifying labour expenditure for the previous taxation year for the production that is related to expenditures that are incurred after May 2, 2000 and included in the Ontario labour expenditure for the previous taxation year in respect of the production.

(2) Subsection 43.5 (5) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 19, is repealed and the following substituted:

Exception, first-time production

(5) Subject to subsection (5.1), if the total amount of the qualifying labour expenditures for a first-time production is $50,000 or less, the total amount of all eligible credits in respect of the production is the lesser of the total amount of the qualifying labour expenditures for the production and $15,000.

Same, regional Ontario production

(5.1) If the total amount of the qualifying labour expenditures for a first-time production that is a regional Ontario production is $50,000 or less, the total amount of all eligible credits in respect of the production for a taxation year ending after May 2, 2000 is the lesser of,

(a)the total amount of the qualifying labour expenditures for the production; and

(b)the amount calculated under subsection (5.2).

Same

(5.2) The amount referred to in clause (5.1) (b) is the amount calculated using the formula,

[ $20,000 ( A / B ) ] + [ $15,000 ( C / B ) ]

in which, "

A"is that portion of the company's expenditures, if any, incurred in the taxation year and after May 2, 2000 that are included in the amount of the company's Ontario labour expenditure for the taxation year in respect of the production, "

B"is the company's total Ontario labour expenditure for the taxation year, and "

C"is that portion of the company's expenditures, if any, incurred in the taxation year and before May 3, 2000 that are included in the amount of the company's Ontario labour expenditure for the taxation year in respect of the production.

(3) Subsection 43.5 (6.1) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 5, section 13, is repealed and the following substituted:

Same, productions commenced after October 31, 1997

(6.1) Subject to subsection (6.1.1), the eligible credit of a qualifying production company for a taxation year in respect of an eligible Ontario production that is not a first-time production and for which principal photography commences after October 31, 1997 is 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.

Same, regional Ontario production

(6.1.1) The eligible credit of a qualifying production company for a taxation year that ends after May 2, 2000 in respect of an eligible Ontario production that is a regional Ontario production and that is not a first-time production is the sum of "A" and "B" where, "

A"is 30 per cent of the amount by which the company's qualifying labour expenditure for the taxation year for the production exceeds its qualifying labour expenditure, if any, for the previous taxation year, as determined in relation to expenditures that are incurred after May 2, 2000 and included in the Ontario labour expenditure for the taxation year in respect of the production, and "

B"is 20 per cent of the amount by which the company's qualifying labour expenditure for the taxation year for the production exceeds its qualifying labour expenditure, if any, for the previous taxation year, as determined in relation to expenditures that are incurred before May 3, 2000 and included in the Ontario labour expenditure for the taxation year in respect of the production.

(4) Subsection 43.5 (6.2) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 5, section 13, is amended by striking out "subsections (4) to (6.1)" and substituting "subsections (4) to (6.1.1)".

(5) Subsection 43.5 (19) 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 adding the following definitions: "

film studio" means a building in which sets are used for the purposes of making film or television productions and sound, light and human access are controlled; ("studio") "

Greater Toronto Area" means the geographic area composed of the City of Toronto and the regional municipalities of Durham, Halton, Peel and York; ("Grand Toronto") "

location day" means, in respect of an eligible Ontario production, a day on which principal photography for the production is done in Ontario outside a film studio; ("jour de tournage en extrieur") "

regional Ontario production" means an eligible Ontario production,

(a)for which the principal photography in Ontario is done entirely outside the Greater Toronto Area, or

(b)for which the principal photography in Ontario is done in whole or in part outside a film studio, but only if,

(i)the number of Toronto location days for the production does not exceed 15 per cent of the total number of location days in respect of the production, and

(ii)the number of location days for the production is at least five or, in the case of a production that is a television series, is at least equal to the number of episodes in the production; ("production rgionale ontarienne") "

Toronto location day" means, in respect of an eligible Ontario production, a day on which principal photography for the production is done outside a film studio and within the Greater Toronto Area. ("jour de tournage en extrieur Toronto")

17. (1) Subsection 43.7 (3) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21 and amended by 1998, chapter 5, section 15, is repealed and the following substituted:

Amount of tax credit

(3) The amount of a corporation's Ontario book publishing tax credit for a taxation year is the sum of all amounts each of which is the amount of the available credit for the taxation year in respect of the publication of an eligible literary work, as determined using the formula,

A + B

in which, "

A"is the amount that is the lesser of,

(a)30 per cent of the qualifying expenditures made by the corporation after May 6, 1997 and before May 3, 2000 in respect of the publication of the literary work, to the extent that the expenditures were not included in determining the available credit relating to the publication of the literary work that was included in an Ontario book publishing tax credit claimed by the corporation for a prior taxation year, and

(b)$10,000 less the total of all amounts, if any, each of which is the available credit relating to the publication of the same literary work that was included in an Ontario book publishing tax credit claimed by the corporation for a prior taxation year; and "

B"is the amount that is the lesser of,

(a)30 per cent of the qualifying expenditures made by the corporation after May 2, 2000 and before the end of the taxation year in respect of the publication of the literary work, to the extent that the expenditures were not included in determining the available credit relating to the publication of the literary work that was included in an Ontario book publishing tax credit claimed by the corporation for a prior taxation year, and

(b)$30,000 less the sum of the amount of "A" for the taxation year in respect of the eligible literary work and the total of all amounts, if any, each of which is the available credit relating to the publication of that literary work that was included in an Ontario book publishing tax credit claimed by the corporation for a prior taxation year.

(2) Subsection 43.7 (4) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is repealed and the following substituted:

Same, book containing more than one literary work

(4) A book that contains more than one literary work shall be deemed to be one literary work for the purposes of subsection (3), and the amount of a corporation's Ontario book publishing tax credit for a taxation year in respect of the book shall not exceed the amount determined under subsection (3).

(3) Paragraph 1 of subsection 43.7 (12) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is repealed and the following substituted:

1.The literary work is written by an eligible Canadian author or, if it is written by more than one author, all or substantially all of the work is the work of eligible Canadian authors.

(4) The French version of paragraph 2 of subsection 43.7 (12) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is amended by striking out "autoris" and substituting "admissible".

(5) Clause 43.7 (13) (j) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is amended by striking out "first-time Canadian authors" and substituting "eligible Canadian authors".

(6) Subparagraph 1 i of subsection 43.7 (14) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is repealed and the following substituted:

i.non-refundable monetary advances to the eligible Canadian author of the literary work, and

. . . . .

(7) Subparagraph 3 i of subsection 43.7 (14) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is amended by striking out "first-time Canadian author" and substituting "eligible Canadian author".

(8) Section 43.7 of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21 and amended by 1998, chapter 5, section 15, is further amended by adding the following subsection:

Exception, second and subsequent literary works

(14.1) An expenditure incurred before May 3, 2000 is not a qualifying expenditure of an Ontario book publishing company unless the expenditure relates to the first literary work published by an eligible Canadian author in an eligible category of writing.

(9) Subsection 43.7 (16) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is amended by adding the following definition: "

eligible Canadian author" means, with respect to a literary work, an individual,

(a)who, when he or she and an Ontario book publishing company enter into a contract to publish the literary work, is ordinarily resident in Canada and is a Canadian citizen or is a permanent resident within the meaning of the Immigration Act (Canada), and

(b)who has not written more than two literary works of the same eligible category of writing that have been previously published, other than a literary work published in an anthology containing two or more literary works by different authors. ("auteur canadien admissible")

(10) The definition of "first-time Canadian author" in subsection 43.7 (16) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is repealed.

18. (1) Subsection 43.10 (4) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 5, section 17, is repealed and the following substituted:

Eligible credit

(4) A qualifying corporation's eligible credit for a taxation year in respect of an eligible production is the total of,

(a)11 per cent of its qualifying Ontario labour expenditure in respect of the production for the taxation year; and

(b)in the case of a regional Ontario production, 3 per cent of the portion of its Ontario labour expenditure in respect of the production for the taxation year, determined on the basis only of expenditures included in the Ontario labour expenditure in respect of the production incurred after May 2, 2000.

(2) Subsection 43.10 (16) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 5, section 17, is amended by adding the following definition: "

regional Ontario production" has the meaning given to that expression in subsection 43.5 (19) if the reference to "eligible Ontario production" in that definition were read as a reference to an "eligible production". ("production rgionale ontarienne")

19. (1) Subsection 43.11 (3) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 42, is amended by striking out "qualifying labour expenditure" and substituting "qualifying expenditure".

(2) Subsection 43.11 (4) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 42, is repealed and the following substituted:

Qualifying expenditure

(4) The qualifying expenditure of a qualifying corporation for a taxation year is the total of its eligible labour expenditure and eligible marketing and distribution expenditure for eligible products for the taxation year.

(3) Section 43.11 of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 42, is amended by adding the following subsections:

Eligible marketing and distribution expenditure

(5.1) The eligible marketing and distribution expenditure of a qualifying corporation for an eligible product for a taxation year is the amount that is the lesser of "A" and "B" where, "

A"is the amount, if any, by which $100,000 exceeds the total of all amounts, if any, each of which is the corporation's eligible marketing and distribution expenditure for the eligible product that was included in the determination of the corporation's tax credit under this section for a prior taxation year, and "

B"is the amount calculated under subsection (5.2).

Same

(5.2) The variable "B" in subsection (5.1) is the amount calculated using the formula,

C - ( D + E + F )

in which, "

C"is the total of all amounts, if any, each of which is a marketing and distribution expenditure in respect of the eligible product incurred by the qualifying corporation in the taxation year or in a prior taxation year that was incurred,

(a)in the month in which the eligible product is completed, and

(b)in the period of 24 months before, or in the period of 12 months after, the month in which the eligible product is completed, "

D"is the total amount of all government assistance, if any, for the marketing and distribution expenditures described in the definition of "C" for the eligible product that, when the qualifying corporation's return is required to be delivered under subsection 75 (1) for the taxation year, the qualifying corporation or any other person or partnership has received, is entitled to receive or can reasonably expect to receive, to the extent that the government assistance has not been repaid pursuant to a legal obligation to do so, "

E"is the total of all amounts, if any, each of which is an eligible marketing and distribution expenditure for the eligible product that was included in the determination of the qualifying corporation's tax credit under this section for a prior taxation year, and "

F"is the total of all marketing and distribution expenditures described in the definition of "C" for the eligible product that are Ontario labour expenditures.

. . . . .

Same, expenditures after May 2, 2000

(14.1) This section, as it reads on May 3, 2000, applies with respect to expenditures incurred after May 2, 2000 that are included in the eligible marketing and distribution expenditure of a qualifying corporation for an eligible product and with respect to expenditures incurred after June 30, 1998 that are included in the Ontario labour expenditure of a qualifying corporation for an eligible product.

(4) Subsection 43.11 (15) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 42, is amended by adding the following definition: "

marketing and distribution expenditure" means the amount determined under the rules prescribed by the regulations. ("dpense de commercialisation et de distribution")

20. Clause 68 (1) (a) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 90, is repealed and the following substituted:

(a)neither the corporation's total assets at the end of the taxation year nor its gross revenue for the taxation year, as recorded in its books and records, exceeds $1 million for a taxation year ending before January 1, 2001 or $1.5 million for a taxation year ending after December 31, 2000; or

. . . . .

Commencement

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

Same

(2) Sections 10 and 20 come into force on January 1, 2001.

Same

(3) Sections 11, 12, 13, 14 and 16, subsections 17 (1) to (3) and (5) to (10) and sections 18 and 19 shall be deemed to have come into force on May 3, 2000.

Same

(4) Section 15 shall be deemed to have come into force on January 1, 1999.

Part III

electricity act, 1998

22. Subsection 63 (4) of the Electricity Act, 1998 is amended by striking out "section 87" and substituting "section 84.1".

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

Repeal

84.1 (1) This Part is repealed on a day to be named by proclamation of the Lieutenant Governor.

Dissolution of Financial Corporation

(2) On the day this Part is repealed, the Financial Corporation is dissolved and its assets and liabilities are transferred to Her Majesty in right of Ontario.

Restriction on proclamation

(3) No proclamation shall be issued under this section unless, in the opinion of the Minister of Finance, substantially all the debts and other liabilities of the Financial Corporation have been retired or defeased.

Determination final

(4) The determination of the Minister of Finance that substantially all the debts and other liabilities of the Financial Corporation have been retired or defeased is final and conclusive and shall not be stayed, varied or set aside by any court.

24. The Act is amended by inserting the following headings immediately before section 85:

part v.1

debt retirement charge

The Residual Stranded Debt

and the Debt Retirement Charge

25. (1) Subsection 85 (1) of the Act is amended by striking out "In this section" at the beginning and substituting "In this Part" and by adding the following definitions: "

collector" means a person appointed as a collector under subsection 85.3 (1); ("percepteur") "

debt retirement charge" means, with respect to a user, the debt retirement charge payable by the user under subsection 85 (4); ("redevance de liquidation de la dette") "

inspector" means a person appointed as an inspector under subsection 85.28 (1); ("inspecteur") "

person" includes Her Majesty in right of Ontario, a partnership, a municipal corporation (including a district or regional municipality), a local board as defined in the Municipal Affairs Act, a police village, or a board, commission or authority established under an Act of the Assembly; ("personne") "

self-generating user" means a person who generates electricity for his, her or its own consumption or for consumption by another person at the expense of the person who generates it; ("usager autoproducteur") "

user" means,

(a)a person who purchases or acquires electricity for his, her or its own consumption or for consumption by another person at the expense of the person who purchases or acquires it,

(b) a person who purchases or acquires electricity on behalf of, or as agent for, a principal who wishes to acquire electricity for consumption by the principal or by other persons at the principal's expense, and

(c)a self-generating user. ("usager")

(2) Subsections 85 (4) and (5) of the Act are repealed and the following substituted:

Duty to pay debt retirement charge

(4) Every user shall pay to the Financial Corporation a debt retirement charge in respect of the amount of electricity consumed in Ontario, to be calculated at the prescribed rate or rates.

Determination re amount consumed

(4.1) For the purposes of subsection (4), the amount of electricity consumed in Ontario is to be determined in accordance with the regulations.

Time and manner of payment

(5) The user shall pay the debt retirement charge at the time and in the manner specified by the regulations.

Exemption from payment

(5.1) Such users or classes of users as may be prescribed are exempted from paying the debt retirement charge in such circumstances as may be prescribed.

Same, under other Acts

(5.2) No person otherwise subject to the debt retirement charge is exempt from paying it by reason of an exemption granted to the person, or granted in respect of the personal or real property of the person, by or under any other Act unless the other Act expressly mentions this Act.

26. The Act is amended by adding the following sections:

Duty to meter consumption

85.1 Such users or classes of users as may be prescribed shall meter their consumption of electricity and shall do so in accordance with the regulations.

Exemptions

85.2 Such users or classes of users as may be prescribed are exempted from such obligations as are specified in the regulation in the circumstances described in the regulation.

Registration

Appointment of collectors

85.3 (1) Such persons as may be prescribed are appointed as collectors of the debt retirement charge.

Registration of collectors

(2) Every collector shall register with the Minister of Finance in accordance with the prescribed requirements and shall maintain his, her or its registration.

Duties of collectors

(3) Every collector shall do the following:

1.Levy and collect the debt retirement charge in accordance with the regulations.

2.Remit, in accordance with the regulations, the debt retirement charge collectable and payable by the collector.

3.Keep the prescribed records in accordance with the prescribed requirements.

4.Submit returns to the Minister of Finance in accordance with the prescribed requirements.

Status

(4) Every collector is an agent of the Financial Corporation for the purpose of levying and collecting the debt retirement charge.

Registration of self-generating users

85.4 (1) Every self-generating user shall register with the Minister of Finance in accordance with the prescribed requirements and shall maintain his, her or its registration.

Duties

(2) Every self-generating user shall do the following:

1.Remit, in accordance with the regulations, the debt retirement charge payable by the self-generating user.

2.Keep the prescribed records in accordance with the prescribed requirements.

3.Submit returns to the Minister of Finance in accordance with the prescribed requirements.

27. The Act is amended by adding the following sections:

Assessment and Reassessment

of Amounts Owing

Assessment payable by collector

85.5 (1) At any time the Minister of Finance considers reasonable, he or she may assess or reassess the debt retirement charge collected by a collector for which the collector has not accounted,

(a)if the collector fails to submit a return or remittance as required by this Part; or

(b)if the collector's returns are not substantiated by the collector's records.

Assessment upon inspection

(2) If it appears to an inspector that a collector has not complied with this Part, the Minister of Finance may assess or reassess the amount of the debt retirement charge collected by the collector or the amount of the penalty authorized by subsection 85.6 (4), based on the inspector's calculation that is described in subsection (3).

Calculation of amount

(3) For the purposes of an assessment or reassessment under subsection (2), the inspector shall calculate the amount of the debt retirement charge or the amount of the penalty and shall make the calculation in the manner and form and using such procedures as the Minister of Finance considers adequate and expedient.

Deemed charge

(4) The amount assessed or reassessed by the Minister of Finance under this section shall be deemed to be a debt retirement charge collected by the collector.

Administrative penalty, collector

85.6 (1) If a collector fails to submit a return to the Minister of Finance as required under this Part, the Minister of Finance may assess a penalty against the collector in an amount equal to the sum of 10 per cent of the amount collectable by the collector in respect of the period for which the return should have been submitted and 5 per cent of the amount payable by the collector in respect of that period.

Same, failure to pay

(2) If a collector submits a return to the Minister of Finance as required under this Part but fails to remit the full amount shown on the return as collectable or payable by the collector, the Minister of Finance may assess a penalty against the collector in an amount equal to the sum of 10 per cent of the amount collectable and not remitted by the collector and 5 per cent of the amount payable and not remitted by the collector.

Same, wilful non-compliance

(3) If the Minister of Finance makes an assessment or reassessment under subsection 85.5 (1) or (2) and if the Minister of Finance is satisfied that the non-compliance that gave rise to the assessment or reassessment was attributable to neglect, carelessness, wilful default or fraud, the Minister of Finance may assess a penalty against the collector equal to the greater of,

(a)$100; or

(b)25 per cent of the amount assessed or reassessed under subsection 85.5 (1) or (2), as the case may be.

Same, failure to collect

(4) If a collector fails to collect a debt retirement charge that the collector is required under this Part to collect, the Minister of Finance may assess a penalty against the collector in an amount equal to the amount that should have been collected.

Exception

(5) The Minister of Finance shall not assess a penalty under subsection (4) against the collector if the Minister of Finance has made an assessment or reassessment under section 85.7 against the user from whom the collector should have collected the amount.

Time limit

(6) The Minister of Finance shall not assess a penalty under subsection (4) with respect to an amount that should have been collected by the collector more than four years before the date of the assessment.

Exception, where misrepresentation, etc.

(7) Subsection (6) does not apply if the Minister of Finance establishes that the collector has made a misrepresentation that is attributable to neglect, carelessness or wilful default or has committed any fraud in making a return or supplying information under this Part or in omitting to disclose information.

Administrative penalty, wilful failure to collect

(8) If a collector fails to collect a debt retirement charge that the collector is required under this Part to collect and if the Minister of Finance is satisfied that the failure is attributable to neglect, carelessness, wilful default or fraud, the Minister of Finance may assess a penalty against the collector,

(a)in an amount equal to the greater of $25 and 25 per cent of the amount that should have been collected, if a penalty has been assessed against the collector under subsection (4) for the failure to collect; or

(b)in an amount equal to the greater of $25 and 125 per cent of the amount that should have been collected, if no penalty has been assessed against the collector under subsection (4) for the failure to collect.

Assessments payable by users

85.7 (1) The Minister of Finance may assess or reassess any debt retirement charge payable by a user.

Time limit

(2) The assessment or reassessment under subsection (1) must be made,

(a)in the case of a user that is not a self-generating user, within four years after the date on which the debt retirement charge became payable; and

(b)in the case of a self-generating user, within four years after the end of the calendar year during which the debt retirement charge became payable.

Exception, where misrepresentation, etc.

(3) Subsection (2) does not apply if the Minister of Finance establishes that the user has made any misrepresentation that is attributable to neglect, carelessness or wilful default or has committed any fraud in making a return or supplying information under this Part or in omitting to disclose information.

Assessment upon inspection

(4) If it appears to an inspector that a user has not complied with this Part, the Minister of Finance may assess or reassess the amount of the debt retirement charge payable by the user, based on the inspector's calculation that is described in subsection (5).

Calculation of amount

(5) For the purposes of an assessment or reassessment under subsection (4), the inspector shall calculate the amount payable by the user and shall make the calculation in the manner and form and using such procedures as the Minister of Finance considers adequate and expedient.

Administrative penalty, user

85.8 If the Minister of Finance makes an assessment or reassessment under section 85.7 and if the Minister of Finance is satisfied that the non-compliance that gave rise to the assessment or reassessment was attributable to neglect, carelessness, wilful default or fraud, the Minister of Finance may assess a penalty against the user equal to the greater of,

(a)$100; or

(b)25 per cent of the amount assessed or reassessed under section 85.7.

Administrative penalty, self-generating user

85.9 (1) If a self-generating user fails to submit a return to the Minister of Finance as required under this Part, the Minister of Finance may assess a penalty against the user in an amount equal to 5 per cent of the debt retirement charge payable by the user in respect of the period for which the return should have been submitted.

Same, failure to remit payment

(2) If a self-generating user submits a return to the Minister of Finance but fails to remit the full amount shown on the return as payable by the user, the Minister of Finance may assess a penalty against the user in an amount equal to 5 per cent of the amount payable and not remitted.

Liability of corporate directors

85.10 (1) This section applies if a corporation fails to collect a debt retirement charge, fails to remit a debt retirement charge that it has collected or fails to pay any interest or penalty under this Part relating to such a charge.

Same

(2) The individuals who were directors of the corporation when the corporation failed to collect or remit the debt retirement charge or failed to pay the interest or penalty are jointly and severally liable, together with the corporation, to pay the charge, interest or penalty to the Financial Corporation.

Assessment

(3) The Minister of Finance may assess or reassess any individual for any amount payable by him or her under subsection (2).

Same

(4) Section 43 of the Retail Sales Tax Act applies, with necessary modifications, with respect to the liability of individuals under subsection (2), assessments or reassessments by the Minister of Finance under this section and the collection of amounts payable.

Assessment of interest payable

85.11 (1) The Minister of Finance may assess interest that is payable on a debt owing to the Financial Corporation under this Part and interest that is payable on a penalty imposed under this Part.

Calculation, re debt

(2) The interest on a debt is payable from the date on which the debt is due to the date on which the amount of the debt plus the interest is received by the Financial Corporation and it is to be calculated at the prescribed rate and in the prescribed manner.

Same, re penalty

(3) The interest on a penalty is payable from the date of the default to which the penalty relates to the date on which the amount of the penalty plus the interest is received by the Financial Corporation and it is to be calculated at the prescribed rate and in the prescribed manner.

Calculation of debt owing

(4) For the purposes of subsection (1), the amount of a debt owing by a person to the Financial Corporation on a particular date is the amount by which "A" exceeds "B" where, "

A"is the aggregate of,

(a)the amount of the debt retirement charge collectable by the person as a collector or payable by the person as a user under this Part before that date,

(b)all amounts or penalties or both assessed under this Part against the person before that date, and

(c)the total of all amounts of interest assessed and payable under this section against the person in respect of a period of time before that date, and "

B"is the aggregate of,

(a)the amount of the debt retirement charge remitted or paid by the person under this Part before that date,

(b)all amounts or penalties or both assessed under this Part and paid by the person before that date, and

(c)the total of all amounts of interest credited to the person in respect of a period of time before that date.

Notice of assessment

85.12 The Minister of Finance shall give a written notice of assessment or reassessment to a user, collector or individual who is assessed or reassessed under this Part.

Effect of information and returns

85.13 (1) The Minister of Finance is not bound by information given or by a return made by or on behalf of a person under this Part and may make assessments under this Part even though no information is given or return is made or even though the information or return is incomplete or incorrect.

Liability

(2) A person's liability to pay a debt retirement charge is not affected by an incorrect or incomplete assessment or by the fact that no assessment has been made.

Payments, Refunds and Rebates

Payment of assessed amounts

85.14 (1) Every person against whom an assessment is made under this Part shall pay to the Financial Corporation the amount assessed, whether or not an objection to the assessment or an appeal from the assessment is outstanding.

Status of assessment

(2) An assessment by the Minister of Finance under this Part shall be deemed to be valid and binding despite any error, defect or omission either in the assessment or in any proceeding under this Part relating to the assessment and the amount assessed shall be deemed to be conclusively established as a debt owing to the Financial Corporation.

Same

(3) Subsection (2) does not prevent the assessment from being varied or vacated on an objection or an appeal and does not prevent a reassessment being made.

Penalty

(4) If a person purports to pay or remit an amount owing under this Part by delivering anything other than legal tender within the meaning of subsection 8 (1) of the Currency Act (Canada) and if, as a result, the Financial Corporation fails to receive full and unconditional payment or settlement, the person is liable to pay to the Financial Corporation the additional fee that is prescribed and the Minister of Finance may assess the additional fee as a penalty.

Same

(5) A penalty assessed under subsection (4) cannot be appealed under this Part and an objection to it cannot be initiated under this Part.

Refunds and rebates

85.15 (1) An amount paid under this Part that is not payable as a debt retirement charge and that was not paid to discharge a liability under an assessment made under this Part shall be refunded.

Rebate

(2) A rebate of a debt retirement charge shall be paid in such circumstances and in accordance with such requirements as may be prescribed.

Interest on refund or rebate

(3) Interest is payable on the amount refunded or the amount of the rebate and shall be calculated at the prescribed rate and in the prescribed manner for the period beginning 21 days after the date on which the Minister of Finance receives the application for the refund or rebate to the date of the refund or rebate.

Time limit for refund

(4) A person is not entitled to a refund under subsection (1) unless application for the refund is made to the Minister of Finance within four years after the date on which the person paid the amount to be refunded or within such longer period as may be permitted by regulation.

Disallowance

(5) If an application for a refund or rebate is made in accordance with this Part and if the application is refused, in whole or in part, the Minister of Finance shall give the applicant a written statement of disallowance specifying the amount that is disallowed and the reasons for disallowing it.

Refund by collector

(6) A collector may refund to a user, in accordance with the regulations, all or part of a debt retirement charge collected from the user by the collector if the user was not required to pay the debt retirement charge and if the refund is made within four years after the user paid it.

Same

(7) The collector may deduct from subsequent remittances under this Part any amount refunded under subsection (6), if the collector makes the deduction within four years after making the refund to the user.

Error in refund or rebate

(8) If a person receives a refund or rebate to which the person is not entitled under this Part, the Minister of Finance may assess or reassess the amount to which the person was not entitled and shall give the person a written statement describing the reasons that the person was not entitled to the amount assessed or reassessed.

Refund of overpayment

85.16 (1) If it is established in a manner described in subsection (2) that a person has paid more than the person is required to pay as or on account of the debt retirement charge under this Part, the amount of the overpayment shall be refunded together with interest calculated at the prescribed rate and in the prescribed manner from the date on which the overpayment arose.

Same

(2) An overpayment may be established as a consequence of an assessment or reassessment under this Part or as a consequence of a final decision of a court in proceedings commenced as a result of an appeal under this Part.

Objections and Appeals

Objections and appeals

85.17 (1) Any of the following persons may object to, or appeal from, an assessment or a reassessment made under this Part, a statement of disallowance given under this Part or a penalty imposed under this Part:

1.A collector.

2.A user.

3.An individual against whom an assessment has been made under section 85.10.

Same

(2) Sections 24, 25, 26, 27, 28, 29 and 30 of the Retail Sales Tax Act apply, with necessary modifications, with respect to objections and appeals under this section.

Collection of Amounts Owing

Funds held in trust

85.18 (1) An amount collectable or collected by a collector as a debt retirement charge or on account of such a charge shall be deemed, despite any security interest in the amount,

(a)to be held in trust for the Financial Corporation;

(b)to be held separate and apart from the collector's property; and

(c)to be held separate and apart from property held by any secured creditor that, but for any security interest, would be the collector's property.

Same

(2) Section 22 of the Retail Sales Tax Act applies, with necessary modifications, with respect to an amount described in subsection (1).

Method of collection

85.19 Any amount payable to the Financial Corporation under this Part that remains unpaid after it becomes due and payable may be collected by the Minister of Finance on behalf of the Financial Corporation and, for that purpose, sections 23 and 36, subsections 37 (1) and (2) and sections 38 and 39 of the Retail Sales Tax Act apply, with necessary modifications.

Offences

Offences

85.20 (1) Every person who contravenes or fails to comply with any of the following provisions is guilty of an offence and, on conviction, is liable to a fine of not less than $100 for each day during which the offence continues:

1.Section 85.1 (duty to meter consumption).

2.Subsection 85.3 (2) (registration of collectors) or paragraph 4 of subsection 85.3 (3) (duty to submit returns, collectors).

3.Subsection 85.4 (1) (registration of self-generating users) or paragraph 3 of subsection 85.4 (2) (duty to submit returns, self-generating users).

4.Subsection 85.28 (3) (prohibition re inspection).

Same, re failure to collect

(2) Every collector who is required by paragraph 1 of subsection 85.3 (3) to levy and collect a debt retirement charge and who fails to do so is guilty of an offence and, on conviction, is liable to a fine equal to the sum of,

(a)the amount of the debt retirement charge that should have been collected, as determined under subsection (3); and

(b)an amount that is not less than $50 and not more than $2,000.

Determination of amount

(3) For the purposes of clause (2) (a), the Minister of Finance shall determine the amount of the debt retirement charge that should have been collected and shall issue a certificate setting out that amount.

Same

(4) The determination made under subsection (3) shall be based upon such information as is available to the Minister of Finance and, unless he or she considers that the collector has engaged in deliberate evasion of this Part, the Minister of Finance shall not consider information respecting a period of more than four years in making the determination.

Effect of certificate

(5) A certificate issued under subsection (3) is proof, in the absence of evidence to the contrary, of the amount of the debt retirement charge that should have been collected and of the authority of the person signing the certificate without any proof of appointment or signature.

Offence, re failure to remit

(6) Every collector who fails to remit an amount collected as, or on account of, a debt retirement charge as required by paragraph 2 of subsection 85.3 (3) is guilty of an offence and, on conviction, is liable to either or both of the following penalties in addition to any other penalty imposed under this Part:

1.A fine in an amount that is,

i.not less than the greater of $100 and 25 per cent of the amount collected and not remitted, and

ii.not more than the greater of $100 and double the amount collected and not remitted.

2.Imprisonment for a term of not more than two years.

Offence, re records

(7) Every collector who is required by paragraph 3 of subsection 85.3 (3) to keep records and who fails to do so in accordance with the regulations is guilty of an offence and on conviction is liable to a fine of not less than $50 and not more than $5,000.

Same, self-generating user

(8) Every self-generating user who is required by paragraph 2 of subsection 85.4 (2) to keep records and who fails to do so in accordance with the regulations is guilty of an offence and on conviction is liable to a fine of not less than $50 and not more than $5,000.

Offence, directors of a corporation

85.21 (1) Any officer, director or agent of a corporation or any other person who directs, authorizes, assents to, acquiesces in or participates in an action or omission by the corporation that is an offence under this Part is guilty of an offence.

Penalty upon conviction

(2) A person convicted of an offence under subsection (1) is liable to the penalty provided for the offence by the corporation, whether or not the corporation has been prosecuted for or convicted of the offence.

Offence, confidentiality

85.22 Every person who contravenes subsection 85.29 (1), (2), (5) or (6) is guilty of an offence and on conviction is liable to a fine of not more than $2,000.

Offence, false statements, etc.

85.23 (1) Every person who engages in any of the following acts or omissions is guilty of an offence:

1.Making, participating in, assenting to or acquiescing in the making of a false or deceptive statement in a return, statement or other document or in an answer required or submitted under this Part.

2.Destroying, altering, mutilating, hiding or otherwise disposing of information or records of a user or collector, for the purpose of evading payment of an amount under this Part.

3.Making, assenting to or acquiescing in the making of a false or deceptive entry of a material particular in a record of a user or collector.

4.Omitting to make or assenting to or acquiescing in the omission of an entry of a material particular in a record of a user or collector.

5.For the purpose of evading a payment under this Part, destroying, altering or otherwise causing a meter to inaccurately measure the consumption of electricity or to cease measuring the consumption of electricity or replacing a meter with another meter that is calculated to mislead.

6.Wilfully evading or attempting to evade, in any manner, payment of an amount under this Part or compliance with an obligation under this Part.

Penalty upon conviction

(2) A person convicted of an offence under subsection (1) is liable to either or both of the following penalties in addition to any other penalty imposed under this Part:

1.A fine in an amount that is,

i.not less than the greater of $1,000 and 50 per cent of the amount that should have been remitted or that the person sought to evade, and

ii.not more than the greater of $1,000 and double the amount that should have been remitted or that the person sought to evade.

2.Imprisonment for a term of not more than two years.

Offence, obtaining refund or rebate by fraud

(3) Every person who, by deceit, falsehood or any other fraudulent means, obtains or attempts to obtain a refund or rebate under this Part to which the person is not entitled is guilty of an offence and, on conviction, is liable to either or both of the following penalties:

1.A fine of not less than $500 and not more than double the amount of the refund or rebate sought.

2.Imprisonment for a term of not more than two years.

General offence

85.24 Every person who contravenes, by any act or omission, a requirement imposed under this Part is guilty of an offence and, on conviction, is liable, where no other penalty is provided for the offence, to a fine of not less than $50 and not more than $5,000.

Imprisonment, failure to pay fine

85.25 If a fine is imposed on an individual under section 85.20, 85.21, 85.22, 85.23 or 85.24 as a result of his or her conviction of an offence under this Part, a sentence of imprisonment for not more than one year in default of payment of the fine may also be imposed on the individual.

Limitation period

85.26 (1) A proceeding to prosecute an offence under this Part must be commenced within six years after the date on which the matter of the offence arose.

Onus of proof

(2) In a prosecution for a failure to pay, collect or remit a debt retirement charge, as the case may be, the accused has the onus of proving that the debt retirement charge was paid, collected or remitted.

Payment of fines

85.27 Fines imposed under sections 85.20, 85.21, 85.22, 85.23 and 85.24 are payable to the Minister of Finance on behalf of the Crown in right of Ontario.

Administration

Inspection

85.28 (1) The Minister of Finance may appoint one or more inspectors who are authorized to exercise any of the powers and perform any of the duties of a person authorized by the Minister of Finance under subsection 31 (1) of the Retail Sales Tax Act for any purpose related to the administration and enforcement of this Part.

Same

(2) Subsections 31 (1), (2) and (2.1) of the Retail Sales Tax Act apply, with necessary modifications, with respect to the administration and enforcement of this Part.

Prohibition

(3) No person shall prevent or interfere with, or attempt to prevent or interfere with, an inspector doing anything that he or she is authorized to do under this section.

Confidentiality

85.29 (1) Except as authorized by this section, no person employed by the Government of Ontario shall,

(a)knowingly communicate or knowingly allow to be communicated to any person any information obtained by or on behalf of the Minister of Finance for the purposes of this Part; or

(b)knowingly allow any person to inspect or have access to any record or thing obtained by or on behalf of the Minister of Finance for the purposes of this Part.

Testimony

(2) No person employed by the Government of Ontario shall be required, in connection with any legal proceedings,

(a)to give evidence relating to any information obtained by or on behalf of the Minister of Finance for the purposes of this Part; or

(b)to produce any record or thing obtained by or on behalf of the Minister of Finance for the purposes of this Part.

Exception

(3) Subsections (1) and (2) do not apply in respect of,

(a)criminal proceedings under an Act of the Parliament of Canada;

(b)proceedings in respect of the trial of any person for an offence under an Act of the Legislature; or

(c)proceedings relating to the collection of the debt retirement charge under this Part.

Communication

(4) A person employed by the Government of Ontario may, in the course of duties in connection with the administration or enforcement of this Part,

(a)communicate or allow to be communicated to another person employed by the Government of Ontario in the administration or enforcement of any law, information obtained by or on behalf of the Minister of Finance for the purposes of this Part; and

(b)allow another person employed by the Government of Ontario in the administration or enforcement of any law, to inspect or have access to any record or thing obtained by or on behalf of the Minister of Finance for the purposes of this Part.

Reciprocal communication

(5) A person who receives information or obtains access to any record or thing under subsection (4) has a duty to communicate or furnish to the Minister of Finance on a reciprocal basis any information, record or thing obtained by the person that affects the administration or enforcement of this Part.

Use of information

(6) Any information, record or thing communicated or furnished under this Part may be used only for the administration or enforcement of this Part or an Act that is administered or enforced by the person receiving the information, record or thing.

Methods of giving notice

85.30 (1) When the Minister of Finance is required under this Part to give a person a document or to give notice to a person, he or she may do so by sending the document or notice by prepaid mail to the person at the person's last known address or by serving the document or notice on the person.

Same, partnership

(2) If the document or notice is to be given to a partnership, the document or notice may be sent to or served on a partner, manager, agent or representative of the partnership.

Same, corporation

(3) If the document or notice is to be given to a corporation, the document or notice may be sent to or served on the president, secretary or another director or on a manager, agent or representative of the corporation.

Proof of compliance

85.31 (1) An affidavit of the Minister of Finance, a person employed in the Ministry of Finance or a person employed by the Financial Corporation about whether this Part has, or has not, been complied with is proof in the absence of evidence to the contrary of the facts set out in the affidavit, without proof of the signature or office of the person making the affidavit.

Status

(2) An affidavit described in subsection (1) may be introduced into evidence without notice, despite section 35 of the Evidence Act.

Right to cross-examine

(3) A party against whom an affidavit described in subsection (1) is adduced may, with the leave of the court, require the deponent to attend court to be cross-examined.

Evidence re collectors

85.32 (1) A copy of a person's application for registration as a collector that is filed with the Minister of Finance under this Part is proof, in the absence of evidence to the contrary, that the person is a collector and is required to remit to the Minister of Finance the debt retirement charge under this Part.

Same

(2) Subject to subsection (4), if a collector is described as a partnership on an application for registration as a collector that is filed with the Minister of Finance under this Part, a copy of the application is proof, in the absence of evidence to the contrary, that the persons named in it are members of the partnership.

Same

(3) Subject to subsection (4), a copy of a return filed by a person or a partnership as a collector is proof, in the absence of evidence to the contrary, that the person or partnership collected the debt retirement charge specified in the return.

Certification

(4) The copy of the application or return must be certified by an official of the Ministry of Finance who has access to the records that are maintained by the Ministry of Finance about the collector, and it may be a copy of an application or return made electronically and reproduced from original data stored electronically.

Evidence re self-generating users

(5) Subsections (1), (2) and (4) apply, with necessary modifications, with respect to applications and returns of a self-generating user.

Evidence re other documents

85.33 (1) For any purpose relating to the administration or enforcement of this Part, the Minister of Finance or a person authorized by him or her may reproduce from original data stored electronically any document previously issued under this Part or any information previously submitted in any form by a collector or a self-generating user, and the reproduction is admissible in evidence and has the same probative force as the original document or information would have had if it had been proved in the ordinary way.

Same

(2) If a book, record or other document is examined or produced under section 85.28 (inspection), the person by whom it is examined or to whom it is produced may make (or cause to be made) one or more copies of it, and a document purporting to be certified by the person to be a copy made under the authority of this subsection is admissible in evidence and has the same probative force as the original document would have had if it had been proved in the ordinary way.

Affidavits, etc.

85.34 (1) Any of the following documents may be sworn by any person who has authority to administer an oath or any person authorized for the purposes of this section by the Lieutenant Governor in Council:

1.A declaration or affidavit relating to a return made under this Part.

2.A statement of information given under section 85.28 (inspection).

Same

(2) A person authorized for the purposes of this section by the Lieutenant Governor in Council shall not charge a fee for swearing a document described in subsection (1).

Forms

85.35 The Minister of Finance may approve the use of forms for any purpose of this Part and the forms may provide for such information to be furnished as the Minister of Finance may require.

28. (1) Clauses 86 (1) (e), (f), (g), (h), (i), (j), (k) and (l) of the Act are repealed and the following substituted:

(e)prescribing one or more rates for the purposes of subsections 85 (4) and 85 (4.1), including rates applicable to particular users, classes of users or uses of electricity, prescribing the amount of electricity with respect to which a rate is applied and prescribing one or more methods for determining the amount of electricity consumed;

(f)exempting particular users or classes of users from paying a debt retirement charge, specifying the circumstances in which the exemption applies and imposing conditions or restrictions with respect to an exemption;

(g)providing for the rebate of the debt retirement charge in whole or in part, prescribing the circumstances in which and conditions under which rebates may be made and prescribing the method of determining the amount of a rebate;

(h)respecting any other matter that the Lieutenant Governor in Council considers necessary or advisable in connection with this Part.

(2) Section 86 of the Act is amended by adding the following subsections:

Regulations, Minister of Finance

(1.1) The Minister of Finance may make regulations,

(a)determining anything that the Minister of Finance is permitted or required by this Part to determine;

(b)defining, for the purposes of this Part, any word or expression used in this Part;

(c)exempting particular users or classes of users from one or more obligations under this Part, other than the obligation to pay a debt retirement charge, specifying the circumstances in which the exemption applies and imposing conditions or restrictions with respect to an exemption;

(d)prescribing the time or times at which a particular user or class of users is required to pay a debt retirement charge;

(e)prescribing, for the purpose of section 85.1, the users or classes of users that are required to meter the consumption of electricity and prescribing methods, procedures and requirements with respect to the metering of electricity;

(f)governing the appointment, registration and duties of collectors;

(g)governing the registration and duties of self-generating users;

(h)prescribing methods of collecting and remitting a debt retirement charge and establishing requirements relating to the collection and remittance, including requirements about invoicing;

(i)requiring the debt retirement charge to be paid or remitted in instalments, specifying when the instalments are to be paid or remitted, and requiring the payment of interest or administrative penalties or both for late payments;

(j)prescribing the additional fee referred to in subsection 85.14 (4);

(k)governing refunds by collectors;

(l)prescribing procedures to be followed by collectors and users in connection with refunds and rebates under this Part;

(m)prescribing, for the purpose of subsection 85.15 (4), a time limit for applying for a refund;

(n)governing payments to a collector when the collector pays a debt retirement charge on behalf of a user and the user then defaults on paying the debt retirement charge to the collector;

(o)prescribing a rate of interest or a method of determining a rate of interest for debts owing under this Part to the Financial Corporation and for amounts owing to a person as a refund or rebate under this Part;

(p)prescribing the records to be kept by a collector or a self-generating user for the purposes of this Part.

. . . . .

Retroactivity

(3) A regulation is, if it so provides, effective with reference to a period before it was filed.

29. Subsections 87 (2), (3) and (4) of the Act are repealed.

30. The definition of "municipal electricity utility" in section 88 of the Act is amended by striking out "or" at the end of clause (c) and by striking out clause (d) and substituting the following:

(d)a corporation established pursuant to section 142 or a subsidiary of such a corporation, if a municipal corporation holds an interest, directly or indirectly, in one or more shares of such a corporation or subsidiary,

(e)a police village that generates, transmits, distributes or retails electricity directly or indirectly, or a corporation or other entity owned by the members of a police village for the purpose of generating, transmitting, distributing or retailing electricity, or

(f)a person or entity prescribed by the regulations.

31. Subsection 89 (2) of the Act is amended by striking out "section 87" and substituting "section 84.1".

32. Subsection 90 (2) of the Act is amended by striking out "section 87" and substituting "section 84.1".

33. Subsection 91 (3) of the Act is amended by striking out "section 87" and substituting "section 84.1".

34. Subsection 92 (3) of the Act is amended by striking out "section 87" and substituting "section 84.1".

35. Subsection 93 (3) of the Act is amended by striking out "section 87" and substituting "section 84.1".

36. (1) Subsection 94 (1) of the Act is repealed and the following substituted:

Municipal electricity property: transfer tax

(1) A municipal corporation or municipal electricity utility shall not transfer to any person any interest in real or personal property that has been used in connection with generating, transmitting, distributing or retailing electricity unless, before the transfer takes effect, it pays to the Financial Corporation the amount determined by multiplying the fair market value of the interest by the prescribed percentage or furnishes security in that amount to the Financial Corporation that meets such requirements as may be prescribed and that is satisfactory to the Financial Corporation.

Forms of property

(1.1) For the purposes of subsection (1), real or personal property that has been used in connection with generating, transmitting, distributing or retailing electricity includes cash, amounts receivable, investments, customer lists, licences, goodwill and other intangible property used in connection with those activities.

(2) Paragraphs 1 and 2 of subsection 94 (3) of the Act are repealed and the following substituted:

1.Any amount payable and paid by the municipal electricity utility under section 93 in respect of the part of the taxation year before the date of the transfer or in respect of a previous taxation year.

2.Any amount payable and paid by the municipal electricity utility under Part II, II.1 or III of the Corporations Tax Act in respect of the part of the taxation year before the date of the transfer or in respect of a previous taxation year.

(3) Subsection 94 (4) of the Act is repealed and the following substituted:

Same

(4) Subject to subsections (5) and (6.1), the amount payable under subsection (1) in a taxation year by a municipal corporation may be reduced by the following amounts:

1.Any amount payable and paid by a municipal electricity utility under section 93 in respect of the part of the taxation year before the date of the transfer or in respect of a previous taxation year, but only if the municipal electricity utility is related to the municipal corporation immediately before the transfer.

2.Any amount payable and paid by a municipal electricity utility under Part II, II.1 or III of the Corporations Tax Act in respect of the part of the taxation year before the date of the transfer or in respect of a previous taxation year, but only if the municipal electricity utility is related to the municipal corporation immediately before the transfer.

(4) Section 94 of the Act is amended by adding the following subsection:

Exception

(6.1) Despite subsection (6), if two or more municipal corporations hold an interest in a municipal electricity utility at the time of the transfer, the amount determined under paragraphs 1 and 2 of subsection (4) in respect of the transfer is the amount calculated in respect of each corporation using the formula,

A B/C

in which, "

A"is the total of the amounts,

(a)that are payable and paid by the municipal electricity utility under section 93 in respect of the part of the taxation year before the date of the transfer or in respect of a previous taxation year, and

(b)that are payable and paid by the municipal electricity utility under Part II, II.1 or III of the Corporations Tax Act in respect of the part of the taxation year before the date of the transfer or in respect of a previous taxation year, "

B"is the fair market value of the municipal corporation's interest in shares of the municipal electricity utility at the time of the transfer, and "

C"is the aggregate fair market value of all issued and outstanding shares of the municipal electricity utility at the time of the transfer.

(5) Subsection 94 (10) of the Act is amended by striking out "section 87" and substituting "section 84.1".

(6) Section 94 of the Act is amended by adding the following subsection:

Status of police village

(10.1) A police village shall be deemed to be a municipal corporation for the purposes of this section.

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

Order to remit, Financial Corporation

95.1 (1) On the recommendation of the Minister of Finance, the Lieutenant Governor in Council may order the Financial Corporation to remit an amount payable under Part V.1 or VI if the Lieutenant Governor in Council considers it to be in the public interest to do so.

Scope of remission

(2) A remission ordered under subsection (1) may be total or partial, conditional or unconditional and may be made,

(a)before, after or pending any suit or proceeding for the recovery of the amount in respect of which the remission is granted;

(b)before or after any payment of the amount payable under Part V.1 or VI has been made or enforced by process or execution; or

(c)in any particular case or class of cases and before the liability to pay arises.

Form of remission

(3) A remission ordered under subsection (1) may be made,

(a)by forbearing to institute a suit or proceeding for the recovery of the amount in respect of which remission is granted;

(b)by delaying, staying or discontinuing any suit or proceeding already instituted;

(c)by forbearing to enforce, staying or abandoning any execution or process upon any judgment;

(d)by the entry of satisfaction upon any judgment; or

(e)by repaying any sum of money paid to or recovered by the Financial Corporation.

Conditional remission

(4) If a remission ordered under subsection (1) is made subject to a condition and the condition is not performed, the amount remitted or to be remitted may be collected or all proceedings may be had as if there had been no remission.

Effect of remission

(5) An unconditional remission and, upon performance of the condition, a conditional remission have effect as if the remission was made after the amount in respect of which it was granted had been sued for and recovered.

38. Subsection 96 (1) of the Act is amended by adding the following clauses:

(0.a)prescribing persons and entities for the purposes of clause (f) of the definition of "municipal electricity utility" in section 88;

. . . . .

(e.1)prescribing requirements relating to security for the purposes of subsection 94 (1).

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

Participation by affiliates

in successor pension plans

104.1 (1) A successor employer may permit an affiliate to be a participating employer under a successor pension plan with respect to such employees of the affiliate, for such period and on such terms as the successor employer determines in its sole discretion acting in its capacity as an employer.

Contributions by participating affiliates

(2) The participating affiliate shall contribute to the pension fund for the plan for a year the amount determined by multiplying the rate described in subsection (4) by the pensionable earnings of the members of the plan who are employees of the affiliate, other than their pensionable earnings, if any, as employees of the successor employer.

Reduction in contributions of successor employer

(3) Despite subsection 104 (1), a successor employer who permits an affiliate to be a participating employer under the plan shall contribute to the pension fund for the plan for a year the amount determined by multiplying the rate described in subsection (4) by the pensionable earnings of the members of the plan who are employees of the successor employer, other than their pensionable earnings, if any, as employees of a participating affiliate.

Rate for employer contributions

(4) The rate for a year is determined by calculating the amount by which the normal cost in respect of all members of the plan exceeds the contributions made for the year to the pension fund for the plan by all members and dividing that amount by the pensionable earnings of all members of the plan for the year, as determined by the actuary of the plan.

Reduction, etc., in contributions

(5) If the plan has a surplus or a prior year credit balance or both, the successor employer, in its sole discretion acting in its capacity as an employer, may permit the participating affiliate to reduce or suspend its contributions to the pension fund to the extent permitted under the Pension Benefits Act, and the affiliate, in its sole discretion acting as employer, may do so.

Status of plan

(6) The plan shall be deemed not to be a multi-employer pension plan for the purposes of the Pension Benefits Act.

Definitions

(7) In this section, "

affiliate" means, in relation to a successor employer,

(a)a corporation that is a subsidiary of the successor employer within the meaning of the Business Corporations Act, or

(b)a corporation or partnership that is controlled by the successor employer, by the person who controls the successor employer or by a person who is controlled by the successor employer, as described in subsection (8); ("membre du mme groupe") "

participating affiliate" means, with respect to a successor employer and a successor pension plan, an affiliate permitted under subsection (1) to be a participating employer under the plan. ("membre du mme groupe participant")

Interpretation, control

(8) For the purposes of clause (b) of the definition of "affiliate" in subsection (7), a corporation or partnership is controlled by another person or by the successor employer if the person or successor employer holds the following, directly or indirectly, other than by way of security:

1.Voting securities carrying more than 50 per cent of the votes for the election of directors of the corporation.

2.An ownership or other interest that confers on the holder more than 50 per cent of the voting interest or other governance rights in the partnership or more than 50 per cent of the income of the partnership.

40. Subsection 106 (3) of the Act is amended by striking out "section 105" and substituting "sections 104.1 and 105".

41. Section 111 of the Act is amended by adding the following subsection:

Tax exemption

(5.1) The Land Transfer Tax Act and the Retail Sales Tax Act do not apply with respect to the transfer of assets.

42. Subsection 126 (1) of the Act is amended by striking out "and" at the end of clause (a) and by adding the following clauses:

(c)that any liability or obligation that is transferred by the order may be transferred to one or more transferees on a joint and several basis, as specified in the order; and

(d)that any liability or obligation that is transferred by the order may be allocated among two or more transferees on the basis set out in the order.

43. (1) Section 138 of the Act is amended by adding the following subsections:

Financial Corporation

(1.1) The Lieutenant Governor in Council may make orders transferring the following assets, liabilities, rights and obligations to the Generation Corporation, the Services Corporation, the IMO, the Electrical Safety Authority or any other person:

1.Assets, liabilities, rights and obligations of, or relating to, the Ontario Hydro Pension and Insurance Plan and the Pension and Insurance Fund of Ontario Hydro.

2.Assets, liabilities, rights and obligations of, or relating to, the Ontario Hydro Financial Corporation Pension Plan and the Ontario Hydro Financial Corporation Pension Fund.

3.Assets, liabilities, rights and obligations of the Financial Corporation relating to an act or omission by the Financial Corporation in connection with its rights or duties under Part VII or by any other person in connection with the person's rights or duties under that Part.

Restriction on scope of order

(1.2) An order under subsection (1.1) shall not contain a provision that conflicts with a provision of an agreement entered into under section 111.

(2) Subsection 138 (2) of the Act is repealed and the following substituted:

Applications of this Part

(2) This Part, except section 137, applies with necessary modifications to an order made under subsection (1) or (1.1) and, for that purpose,

(a)a reference in this Part to a transfer order shall be deemed to be a reference to an order made under subsection (1) or (1.1), as the case may be;

(b)a reference in this Part to Ontario Hydro in connection with an order made under subsection (1) shall be deemed to be a reference to the subsidiary of the Financial Corporation established under section 110; and

(c)a reference in this Part to Ontario Hydro in connection with an order made under subsection (1.1) shall be deemed to be a reference to the Financial Corporation.

Commencement

44. (1) Subject to subsections (2), (3), (4) and (5), this Part comes into force on the day this Act receives Royal Assent.

Same

(2) Subsection 25 (2) and sections 26 and 27 come into force on a day to be named by proclamation of the Lieutenant Governor.

Same

(3) Section 30 and subsection 36 (6) shall be deemed to have come into force on November 30, 2000.

Same

(4) Sections 39 and 40 shall be deemed to have come into force on April 1, 1999.

Same

(5) Subsection 36 (1) shall be deemed to have come into force on November 7, 1998.

Part IV

employer health tax act

45. The Employer Health Tax Act is amended by adding the following section:

Exclusion of certain stock option benefits

from remuneration

2.2 (1) This section applies with respect to an employer if an amount is deemed to be remuneration paid by the employer to an employee under subsection 2 (3.1), (3.2) or (3.3) during a year.

Status of benefit

(2) Despite any other provision of this Act, a benefit described in subsection 2 (3.1), (3.2) or (3.3) is not deemed to be remuneration paid by the employer to the employee during a year,

(a)if the employee is entitled to the benefit by virtue of an eligible agreement described in subsection (3);

(b) if the event giving rise to the benefit occurs after May 2, 2000; and

(c)if the employer meets all of the conditions described in subsection (4) with respect to the year.

Eligible agreement

(3) An agreement between an employee and his or her employer or between an employee and a corporation with which his or her employer does not deal at arm's length, within the meaning of section 251 of the Income Tax Act (Canada), is an eligible agreement referred to in clause (2) (a),

(a)if they entered into the agreement in the course of, or because of, the employee's employment relationship with the employer;

(b)if the agreement entitles the employee to acquire a security of the employer or of a corporation with which the employer does not deal at arm's length; and

(c)if the employee is entitled to deduct an amount under paragraph 110 (1) (d) or (d.1) of the Income Tax Act (Canada) in respect of a benefit relating to the agreement in computing his or her taxable income for a taxation year.

Preconditions

(4) The following are the conditions referred to in clause (2) (c) that the employer must meet:

1.The employer must carry on business through a permanent establishment in Ontario in the taxation year of the employer preceding the taxation year that ends in the year (the "preceding taxation year").

2.The employer must directly undertake scientific research and experimental development within the meaning of subsection 248 (1) of the Income Tax Act (Canada) at a permanent establishment in Ontario in the preceding taxation year.

3.The employer's eligible expenditures for the preceding taxation year must not be less than $25 million or 10 per cent of the employer's total expenses for that taxation year, whichever is less.

4.The employer's specified eligible expenditures for the preceding taxation year must not be less than $25 million or 10 per cent of the employer's adjusted total revenue for that taxation year, whichever is less.

Interpretation, start-ups

(5) For the purposes of subsection (4), if the taxation year of an employer that ends in the year referred to in subsection (2) is the first taxation year of the employer after it is incorporated or is the first taxation year in which the employer carries on business, references to the preceding taxation year are to be read as references to that first taxation year.

Interpretation, eligible expenditures

(6) For the purposes of paragraph 3 of subsection (4) and subsection (9), the amount of an employer's eligible expenditures for a taxation year is calculated using the formula,

A + B C

in which, "

A"is the total amount of the expenditures incurred by the employer in the taxation year at a permanent establishment in Ontario each of which would be a qualified expenditure under subsection 12 (1) of the Corporations Tax Act and is,

(a)an amount described in subparagraph 37 (1) (a) (i) or 37 (1) (b) (i) of the Income Tax Act (Canada), or

(b)a prescribed proxy amount of the employer for the taxation year referred to in paragraph (b) of the definition of "qualified expenditure" in subsection 127 (9) of the Income Tax Act (Canada), "

B"is the reduction, if any, in the amount of "A" required under subsections 127 (18) to (20) of the Income Tax Act (Canada) in respect of a contract payment, and "

C"is the total of all amounts each of which is paid or payable by the employer in the taxation year that is included in the amount of "A" and that would be a contract payment as defined in subsection 127 (9) of the Income Tax Act (Canada) made to the recipient of the amount.

Same

(7) For the purposes of subsection (4), in determining the share of the eligible expenditures of a partnership to be attributed to a partner who is a specified member of the partnership within the meaning of subsection 248 (1) of the Income Tax Act (Canada), the eligible expenditures, total expenses and total revenue of the partnership shall be deemed to be nil.

Interpretation, total expenses

(8) For the purposes of paragraph 3 of subsection (4), the employer's total expenses are as determined in accordance with generally accepted accounting principles, but they exclude expenses that are extraordinary items and the consolidation and equity methods of accounting are not to be used in determining the total expenses.

Interpretation, specified eligible expenditures

(9) For the purposes of paragraph 4 of subsection (4), the amount of an employer's specified eligible expenditures for a taxation year is the amount that is the total of,

(a)the employer's eligible expenditures for the taxation year;

(b)the employer's proportionate share of any expenditures incurred by a partnership of which the employer is a member during a fiscal period of the partnership that ends in the taxation year that would be eligible expenditures if they had been incurred by the employer; and

(c)all expenditures each of which is incurred by a corporation that is associated with the employer throughout the taxation year and that has a permanent establishment in Canada for any taxation year of the associated corporation that ends in the employer's taxation year, including the associated corporation's proportionate share of any expenditures incurred by a partnership of which the corporation is a member during a fiscal period of the partnership that ends in the associated corporation's taxation year, that would be eligible expenditures if they had been incurred by the employer.

Interpretation, adjusted total revenue

(10) For the purposes of paragraph 4 of subsection (4), the adjusted total revenue of an employer for a taxation year is the amount that is the total of,

(a)the employer's total revenue for the taxation year;

(b)the employer's proportionate share of the total revenue of a partnership of which the employer is a member during a fiscal period of the partnership that ends in the taxation year; and

(c)the total revenue of each corporation that is associated with the employer throughout the taxation year and that has a permanent establishment in Canada for any taxation year of the associated corporation that ends in the employer's taxation year, including the associated corporation's share of the total revenue of any partnership of which the corporation is a member for a fiscal period of the partnership ending in the associated corporation's taxation year.

Same, total revenue

(11) For the purposes of clauses (10) (a) and (c), an entity's total revenue for a taxation year is the amount that would be its gross revenue for the taxation year, as determined in accordance with generally accepted accounting principles (except that the consolidation and equity methods must not be used), if the gross revenue excluded revenue from transactions with,

(a)corporations that are associated with the entity throughout the taxation year and that have a permanent establishment in Canada in the taxation year; or

(b)partnerships in which the entity or a corporation described in clause (a) is a member.

Same

(12) For the purposes of clauses (10) (b) and (c), the total revenue of a partnership for a fiscal period is the amount that would be the gross revenue of the partnership for the fiscal period, as determined in accordance with generally accepted accounting principles (except that the equity method must not be used), if the gross revenue excluded revenue of the partnership from transactions with,

(a)the employer; or

(b)corporations that are associated with the employer throughout the employer's taxation year in which the fiscal period ends and that have a permanent establishment in Canada in that taxation year.

Short or multiple taxation years

(13) In determining the amount of an employer's eligible expenditures, total expenses and total revenue for a taxation year for the purposes of this section, the following rules apply:

1.If the taxation year is less than 51 weeks and is the only taxation year ending in a calendar year, the eligible expenditures, total expenses and total revenue for the taxation year are the amounts otherwise determined, multiplied by the ratio of 365 to the number of days in the taxation year.

2.If the taxation year is not the only taxation year of the employer ending in the same calendar year, the amount of the employer's eligible expenditures, total expenses and total revenue for the taxation year is the total of those amounts for all taxation years ending in that calendar year, as otherwise determined, multiplied by the ratio of 365 to the total number of days in those taxation years.

3.If the taxation year of a corporation that is associated with the employer is less than 51 weeks and is the only taxation year of the associated corporation ending in the employer's taxation year, the corporation's eligible expenditures, total expenses and total revenue for that taxation year are the amounts otherwise determined, multiplied by the ratio of 365 to the number of days in the taxation year.

4.If a fiscal period of a partnership of which the employer or the associated corporation is a member is less than 51 weeks and is the only fiscal period of the partnership ending in the taxation year of the employer or the associated corporation, as the case may be, the eligible expenditures, total expenses and total revenue of the partnership for that fiscal period are the amounts otherwise determined, multiplied by the ratio of 365 to the number of days in the fiscal period.

5.If a corporation who is associated with the employer has two or more taxation years ending in the employer's taxation year, the eligible expenditures, total expenses and total revenue of the associated corporation for the taxation year ending in the employer's taxation year are the total of those amounts for all of its taxation years ending in the employer's taxation year, as otherwise determined, multiplied by the ratio of 365 to the total number of days in all of those taxation years.

6.If a partnership of which the employer or the associated corporation is a member has two or more fiscal periods ending in the taxation year of the employer or the associated corporation, as the case may be, the eligible expenditures, total expenses and total revenue for the fiscal period of the partnership ending in the taxation year of the employer or the associated corporation, as the case may be, are those amounts for all of its fiscal periods ending in the taxation year, as otherwise determined, multiplied by the ratio of 365 to the total number of days in all of the fiscal periods.

Associated corporation

(14) For the purposes of this section, an employer and a corporation are associated if they would be associated for the purposes of the Income Tax Act (Canada).

Interpretation

(15) In this section, "

fiscal period" means, in respect of a partnership, its fiscal period for the purposes of the Income Tax Act (Canada); ("exercice") "

taxation year" means, in respect of an employer or a corporation, the employer or corporation's taxation year for the purposes of the Income Tax Act (Canada). ("anne d'imposition")

Commencement

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

Same

(2) Section 45 shall be deemed to have come into force on May 3, 2000.

Part V

income tax act

47. (1) The French version of the definition of "corporation" in subsection 1 (1) of the Income Tax Act is amended by adding "Le terme «socit» a un sens correspondant.".

(2) Clause (b) of the definition of "Provincial Minister" in subsection 1 (1) of the Act, as re-enacted by the Statutes of Ontario, 1998, chapter 34, section 65, is amended by adding the following subclauses:

(i.1)section 8.4.1,

(i.2)Division C.1 of Part II and provisions of this Act and the Federal Act that apply in respect of provisions in that Division.

(3) Subsection 1 (1) of the Act, as amended by the Statutes of Ontario, 1993, chapter 29, section 1, 1996, chapter 1, Schedule C, section 1, 1996, chapter 24, section 11, 1998, chapter 34, section 65, 1999, chapter 9, section 115 and 2000, chaper 10, section 11, is further amended by adding the following definitions: "

bankrupt" has the meaning assigned by the Bankruptcy and Insolvency Act (Canada); ("failli") "

common-law partner" and "common-law partnership" have the meanings given to those expressions by subsection 248 (1) of the Federal Act. ("conjoint de fait", "union de fait")

48. Section 2.1 of the Act, as enacted by the Statutes of Ontario, 1996, chapter 1, Schedule C, section 2 and amended by 1998, chapter 34, section 66, is repealed and the following substituted:

Tax on qualifying environmental trust

2.1 (1) Every trust that is a qualifying environmental trust at the end of a taxation year is liable to a tax for the year.

Same

(2) The tax payable by a qualifying environmental trust for a taxation year is only the amount determined for the year under section 4.1.

49. Paragraph 9 of subsection 3 (1) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 12, is repealed and the following substituted:

9.The additional tax for the 2001 and each subsequent taxation year is 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 $3,560, and

ii.36 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $4,491.

50. (1) The definitions of "first threshold" and "second threshold" in subsection 4 (1) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 13, are repealed.

(2) Subsection 4 (3) of the Act, as re-enacted by the Statutes of Ontario, 2000, chapter 10, section 13, is repealed and the following substituted:

Amount of tax after 1999

(3) The amount of tax payable for a taxation year ending after December 31, 1999 by an individual described in section 2 is the amount determined under the applicable following paragraph, less the deductions permitted under this section and plus the additional taxes, if any, payable under sections 3 and 4.3 to 4.8:

1.If the individual's taxable income for the year does not exceed $30,004, the amount of tax payable by the individual is calculated by multiplying the individual's taxable income for the year by the lowest tax rate for the year.

2.If the individual's taxable income for the year exceeds $30,004 but does not exceed $60,009, the amount of tax payable by the individual is calculated using the formula,

A + B

in which, "

A"is the amount calculated by multiplying $30,004 by the lowest tax rate for the year, and "

B"is the amount calculated by subtracting $30,004 from the individual's taxable income for the year, and then multiplying the resulting amount by the middle tax rate for the year.

3.If the individual's taxable income for the year exceeds $60,009, the amount of tax payable by the individual is calculated using the formula,

A + C + D

in which, "

A"is the amount calculated by multiplying $30,004 by the lowest tax rate for the year, "

C"is the amount calculated by multiplying $30,005 by the middle tax rate for the year, and "

D"is the amount calculated by subtracting $60,009 from the individual's taxable income for the year, and then multiplying the resulting amount by the highest tax rate for the year.

4.Despite paragraphs 1, 2 and 3, the amount of tax payable for the year by a trust to which subsection 122 (1) of the Federal Act applies is calculated by multiplying the trust's taxable income for the year by the highest tax rate for the year.

(3) Subsections 4 (3.1) and (3.2) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 13, are repealed and the following substituted:

Non-refundable credits

(3.1) Subject to the rules in subsection (3.2), an individual may deduct from the amount of tax payable under paragraph 1, 2, 3 or 4 of subsection (3) for a taxation year ending after December 31, 1999 any of the following credits to which the individual is entitled for the taxation year in the amount determined for the year under section 4.0.1:

1.A spouse or common-law partner credit if the individual is entitled to include an amount under paragraph 118 (1) (a) of the Federal Act in the calculation of his or her personal credit for the year under subsection 118 (1) of that Act.

2.A credit for a wholly dependent person if the individual is entitled to include an amount under paragraph 118 (1) (b) of the Federal Act in the calculation of his or her personal credit for the year under subsection 118 (1) of that Act.

3.A single status credit if the individual is entitled to include an amount under paragraph 118 (1) (c) of the Federal Act in the calculation of his or her personal credit for the year under subsection 118 (1) of that Act.

4.A credit for in-home care of a person if the individual is entitled to include an amount in respect of the person under paragraph 118 (1) (c.1) of the Federal Act in the calculation of his or her personal credit for the year under subsection 118 (1) of that Act.

5.A credit for a dependant if the individual is entitled to include an amount in respect of the dependant under paragraph 118 (1) (d) of the Federal Act in the calculation of his or her personal credit for the year under subsection 118 (1) of that Act.

6.A credit in respect of a person described in paragraph 118 (1) (e) of the Federal Act if the individual is entitled to include an amount under that paragraph in the calculation of his or her personal credit for the year under subsection 118 (1) of that Act in respect of the person.

7.An age credit if the individual is entitled to a deduction under subsection 118 (2) of the Federal Act for the year.

8.A credit for Employment Insurance premiums and Canada Pension Plan contributions if the individual is entitled to a deduction under section 118.7 of the Federal Act for the year.

9.A pension credit if the individual is entitled to a deduction under subsection 118 (3) of the Federal Act for the year.

10.A credit in respect of a mental or physical impairment if the individual is entitled to a deduction under subsection 118.3 (1) of the Federal Act for the year.

11.A credit in respect of a disabled dependant if the individual is entitled to a deduction under subsection 118.3 (2) of the Federal Act for the year in respect of the dependant.

12.An amount in respect of unused tuition and education credits if the individual is entitled to a deduction under subsection 118.61 (2) of the Federal Act for the year.

13.A tuition credit if the individual is entitled to a deduction under subsection 118.5 (1) of the Federal Act for the year.

14.An education credit if the individual is entitled to a deduction under subsection 118.6 (2) of the Federal Act for the year.

15.Tuition and education credits transferred to the individual if the individual is entitled to a deduction under section 118.9 of the Federal Act for the year.

16.An amount transferred from a spouse or common-law partner if the individual is entitled to a deduction under section 118.8 of the Federal Act for the year.

17.A medical expense credit if the individual is entitled to a deduction under subsection 118.2 (1) of the Federal Act for the year.

18.A credit for charitable and other gifts if the individual is entitled to a deduction under subsection 118.1 (3) of the Federal Act for the year.

19.A credit for interest on a student loan if the individual is entitled to a deduction under section 118.62 of the Federal Act for the year.

Rules

(3.2) The following rules apply in determining the amount, if any, deductible by an individual under subsection (3.1) for a taxation year:

1.In calculating the total amount an individual may deduct under subsection (3.1), the individual shall deduct the credits to which he or she is entitled in the order in which the credits are listed in that subsection.

2.The total amount of the tax credits an individual may deduct under subsection (3.1) must not exceed the amount of tax payable by him or her under paragraph 1, 2, 3 or 4 of subsection (3) for the taxation year.

3.No pension credit may be deducted by an individual who is subject to tax for the taxation year by reason that he or she is an individual described in clause 2 (b).

4.Subsections 118 (4) to (6) and 118.3 (3) of the Federal Act apply with necessary modifications for the purposes of subsection (3.1).

5.An individual who becomes bankrupt in a calendar year is entitled to deduct only the credits described in the following subparagraphs in computing his or her tax payable for a taxation year that ends in the calendar year:

i.the credits the individual otherwise would be entitled to deduct under paragraphs 8, 9, 13, 14, 17, 18 and 19 of subsection (3.1) for the taxation year that reasonably can be considered wholly applicable to the taxation year, and

ii.the part of the credits the individual otherwise would be entitled to deduct under paragraphs 1 to 7, 10, 11, 15 and 16 of subsection (3.1) for the taxation year that reasonably can be considered applicable to the taxation year.

6.The total of all credits deductible under paragraph 5 for all taxation years of an individual ending in a calendar year must not exceed the total amount that would have been deductible for the calendar year if the individual had not been bankrupt.

7.An individual who is resident in Canada only part of a taxation year is entitled to deduct only the following credits for the taxation year:

i.the credits the individual otherwise would be entitled to deduct under paragraphs 8, 9, 13, 14, 17, 18 and 19 of subsection (3.1) for the taxation year that reasonably can be considered wholly applicable to any period during the year in which the individual was resident in Canada, computed as if that period were the whole taxation year, and

ii.the part of any credits the individual otherwise would be entitled to deduct under paragraphs 1 to 7, 10, 11, 15 and 16 of subsection (3.1) for the taxation year that reasonably can be considered applicable to any period in the year in which the individual was resident in Canada, computed as though the period were the whole taxation year.

8.The total of all amounts deductible under paragraph 7 for the taxation year shall not exceed the total amount that would have been deductible for the taxation year if the individual had been resident in Canada throughout the year.

9.An individual who is not resident in Canada at any time in the taxation year is not entitled to deduct a credit under any of paragraphs 1 to 7, 9, 10, 11, 14, 15, 16 and 17 of subsection (3.1) for the taxation year unless all or substantially all of the individual's income for the year is included in computing his or her taxable income earned in Canada for the year for the purposes of the Federal Act.

10.If a separate return of income with respect to an individual is filed under subsection 70 (2), 104 (23) or 150 (4) of the Federal Act, as it applies for the purposes of this Act, for a particular period and another return of income with respect to the individual is filed under this Act for a period ending in the calendar year in which the particular period ends, the total of all credits under paragraphs 8 to 15 and 17 to 19 of subsection (3.1) claimed in the returns must not exceed the total that could be deducted under those paragraphs for the year with respect to the individual if no separate returns were filed.

11.No amount may be deducted under subsection (3.1), other than a credit under paragraph 18 of that subsection, in determining the amount of tax payable by a trust.

(4) Subsections 4 (3.3) and (3.4) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 13, are repealed and the following substituted:

Minimum tax carry-forward

(3.3) In determining the amount of tax payable for a taxation year ending after December 31, 1999, an individual may deduct an amount not exceeding the lesser of,

(a)the amount of tax payable for the year under paragraph 1, 2, 3 or 4 of subsection (3), less all amounts deductible for the year under subsections (3.1), (3.4), (3.5), (4) and (4.1); and

(b)the amount calculated for the year under subsection (3.3.1).

Calculation

(3.3.1) For the purposes of clause (3.3) (b), the amount is calculated using the formula,

A + B + C D

in which, "

A"is the amount equal to 37.5 per cent of the amount, if any, deducted by the individual under section 120.2 of the Federal Act for the taxation year in respect of a prior taxation year that ends before January 1, 2000 and is one of the seven preceding taxation years, "

B"is the total of all amounts each of which is the amount added under section 4.4 to the individual's tax otherwise payable for a prior taxation year that ends after December 31, 1999 and is one of the seven preceding taxation years, "

C"is the amount equal to 37.5 per cent of that portion, if any, of the amount deducted by the individual under section 120.2 of the Federal Act for the taxation year that is in respect of a prior taxation year if,

(a)the prior taxation year ends after December 31, 1999 and is one of the seven preceding taxation years, and

(b)the individual was not resident in Ontario at the end of the prior taxation year but was resident at that time in another province, and "

D"is the total of all amounts deducted under this subsection in a prior taxation year that are included in the calculation of "A", "B" or "C".

Dividend tax credit

(3.4) In determining the amount of tax payable for a taxation year ending after December 31, 1999, an individual who is resident in Ontario on the last day of the taxation year may deduct an amount equal to the lesser of,

(a)the prescribed percentage of the amount, if any, that is required by paragraph 82 (1) (b) of the Federal Act to be included in his or her income for the year or, if no percentage is prescribed, the amount equal to 25.67 per cent of the amount, if any, that is required by that paragraph of the Federal Act to be included in his or her income for the year; and

(b)the amount of tax payable by the individual for the year under paragraph 1, 2, 3 or 4 of subsection (3), less all amounts deductible for the year under subsection (3.1).

(5) Section 4 of the Act, as amended by the Statutes of Ontario, 1992, chapter 25, section 2, 1996, chapter 1, Schedule C, section 4, 1996, chapter 18, section 2, 1996, chapter 24, section 12, 1997, chapter 10, section 2, 1998, chapter 5, section 2, 1999, chapter 9, section 117 and 2000, chapter 10, section 13, is further amended by adding the following subsection:

Additional deduction

(4.1) In addition to the amount that may be deducted under subsection (4), there may be deducted from the amount of tax otherwise payable by an individual for a taxation year ending after December 31, 1999 an amount calculated using the formula,

G H/I

in which, "

G"is the total of all amounts the individual is entitled to deduct and deducts under this section as a pension credit, dividend tax credit or overseas employment tax credit for the taxation year, "

H"is the amount of the individual's income earned in the taxation year outside Ontario, and "

I"is the amount of the individual's income for the year.

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

Non-refundable credits

4.0.1 (1) The amounts of the non-refundable credits for a taxation year, if any, that may be deducted by an individual under subsection 4 (3.1) are the amounts determined under this section after any adjustments required for the year by section 4.0.2.

Credit, spouse, etc.

(2) The amount of an individual's spouse or common-law partner credit for a taxation year is the amount calculated using the formula,

A [$7,231 + $6,140 (B $614)]

in which, "

A"is the lowest tax rate for the year, and "

B"is the greater of $614 and the income for the year of the individual's spouse or common-law partner or, if the individual and the individual's spouse or common-law partner are living separate and apart at the end of that year by reason of a breakdown of their marriage or common-law partnership, the income of the spouse or common-law partner while married or in the common-law partnership and not separated during the year.

Credit, wholly dependent person

(3) The amount of an individual's credit for a wholly dependent person for a taxation year is the amount calculated using the formula,

A [$7,231 + $6,140 (C $614)]

in which, "

A"is the lowest tax rate for the year, and "

C"is the greater of $614 and the income for the year of the person referred to in paragraph 118 (1) (b) of the Federal Act whom the individual supports.

Single status credit

(4) The amount of an individual's single status credit for a taxation year is the product of the lowest tax rate for the year multiplied by $7,231.

Credit, in-home care

(5) The amount of an individual's credit for a taxation year for in-home care of a person is the amount calculated using the formula,

A ($14,047 D)

in which, "

A"is the lowest tax rate for the year, and "

D"is the greater of $11,661 and the income for the year of the person.

Dependant credit

(6) The amount of an individual's credit for a taxation year in respect of a dependant described in paragraph 118 (1) (d) of the Federal Act is the amount calculated using the formula,

A ($7,231 E)

in which, "

A"is the lowest tax rate for the year, and "

E"is the greater of $4,845 and the dependant's income for the year.

Additional amount

(7) The amount of an individual's credit for a taxation year referred to in paragraph 6 of subsection 4 (3.1) is the amount, if any, in respect of the person calculated using the formula,

A (F G)

in which, "

A"is the lowest tax rate for the year, "

F"is the amount that would be determined for the year in respect of the person under subsection (5) or (6), as the case may be, if paragraph 118 (4) (c) of the Federal Act did not apply for the purposes of subsection 118 (1) of that Act, and "

G"is the amount determined for the year under subsection (3).

Age credit

(8) The amount of an individual's age credit for a taxation year is the amount calculated using the formula,

A ($3,531 H)

in which, "

A"is the lowest tax rate for the year, and "

H"is 15 per cent of the amount, if any, by which the individual's income for the year would exceed $26,284 if no amount were included in his or her income in respect of a gain from a disposition of property to which section 79 of the Federal Act applies.

Credit, EI premiums, etc.

(9) The amount of an individual's credit described in paragraph 8 of subsection 4 (3.1) for a taxation year is the amount that would be determined in respect of the individual for the year under section 118.7 of the Federal Act if the appropriate percentage referred to in that section were the lowest tax rate.

Pension credit

(10) The amount of an individual's pension credit for a taxation year is the amount calculated using the formula,

A I

in which, "

A"is the lowest tax rate for the year, and "

I"is the lesser of $1,000 and,

(a)the amount of the individual's pension income for the year for the purposes of subsection 118 (3) of the Federal Act, if he or she has attained the age of 65 years before the end of the year, or

(b)the amount of the individual's qualified pension income for the year for the purposes of that subsection in any other case.

Credit, impairment

(11) The amount of an individual's credit for a taxation year in respect of a mental or physical impairment is the amount determined by multiplying $4,293 by the lowest tax rate for the year.

Credit, disabled dependant

(12) The amount of an individual's credit for a taxation year in respect of a disabled dependant is the amount, if any, by which "J" exceeds "K" where, "

J"is the amount the dependant is entitled to deduct for the year under paragraph 10 of subsection 4 (3.1), and "

K"is the amount, if any, equal to the amount of tax that would be payable by the dependant for the year under paragraph 1, 2 or 3 of subsection 4 (3), less the amount that would be the total of the dependant's credits for the year under paragraphs 1 to 9 of subsection 4 (3.1).

Unused tuition and education credits

(13) The amount of an individual's unused tuition and education credits for a taxation year is the lesser of "L" and "M" where, "

L"is the amount calculated under subsection (14) for the year, and "

M"is the amount of tax that would be payable by the individual for the year under subsection 4 (3) if no amount were deductible under paragraphs 13 to 19 of subsection 4 (3.1) or under subsection 4 (3.4) for the year and if no tax were payable under section 3 for the year.

Same

(14) For the purposes of subsection (13), the amount is calculated using the formula,

N + (P Q) (R + S)

in which, "

N"is the amount of the individual's unused tuition and education credits at the end of the taxation year ending immediately before the prior taxation year, "

P"is the total amount of the individual's tuition credit and education credit for the prior taxation year, "

Q"is the lesser of "P" and the amount that would be payable by the individual for the prior taxation year under subsection 4 (3) if no amount were deductible under paragraphs 13 to 19 of subsection 4 (3.1) or under subsection 4 (3.4) for the prior taxation year and no tax were payable under section 3 for that year, "

R"is the amount deducted by the individual under paragraph 12 of subsection 4 (3.1) for the prior taxation year, and "

S"is the tuition and education credits transferred for the prior taxation year by the individual to the individual's spouse, common-law partner, parent or grandparent.

Transitional, unused tuition

and education credits

(15) If an individual was not resident in Ontario on the last day of the prior taxation year, the amount of his or her unused tuition and education credits at the end of that year is the amount determined under the prescribed rules.

Same

(16) Despite subsection (14), the amount of an individual's unused tuition and education credits at the end of the 1999 taxation year equals the amount that would be the individual's unused tuition and education credits at the end of that year under section 118.61 of the Federal Act if the percentage applied under sections 118.5 and 118.6 of that Act in computing the individual's tuition and education credits had been 6.37 per cent instead of the appropriate percentage.

Tuition credit

(17) The amount of an individual's tuition credit for a taxation year is the amount that would be determined for the year under section 118.5 of the Federal Act if the appropriate percentage referred to in that section were the lowest tax rate.

Education credit

(18) The amount of an individual's education credit for a taxation year is the amount calculated using the formula,

A B

in which, "

A"is the lowest tax rate for the year, and "

B"is the total of,

(a)$200 multiplied by the number of months in the year during which the individual is enrolled in a qualifying educational program as a full-time student at a designated educational institution for the purposes of section 118.6 of the Federal Act, and

(b)$60 multiplied by the number of months in the year, other than months described in clause (a), in which the individual is enrolled at a designated educational institution in a specified educational program, for the purposes of section 118.6 of the Federal Act, that provides that each student in the program spend not less than 12 hours in the month on courses in the program.

Tuition credit, etc., transferred

(19) Subject to subsection (22), the amount of the credit, if any, an individual is entitled to deduct under paragraph 15 of subsection 4 (3.1) is the amount calculated using the formula,

T U

in which, "

T"is the lesser of $319 and the sum of the tuition credit and education credit the person transferring the credits would be entitled to deduct for the year, and "

U"is the amount of tax that would be payable under paragraph 1, 2 or 3 of subsection 4 (3) by the person transferring the credits for the year, less the credits the person would be entitled to deduct for the year under paragraphs 1 to 12 of subsection 4 (3.1).

Credits transferred

(20) Subject to subsection (22), the amount of an individual's deduction under paragraph 16 of subsection 4 (3.1) for a taxation year in respect of amounts transferred to the individual by his or her spouse or common-law partner is the amount calculated using the formula,

(V W) + X Y

in which, "

V"is the lesser of $319 and the sum of the tuition and education credits the person transferring the credits would be entitled to deduct for the year, "

W"is the amount of tax that would be payable under paragraph 1, 2 or 3 of subsection 4 (3) by the person transferring the credits for the year, less the credits the person would be entitled to deduct for the year under paragraphs 1 to 12 of subsection 4 (3.1), "

X"is the total of the credits under paragraphs 7, 9, 10 or 11 of subsection 4 (3.1) the person transferring the credits would be entitled to deduct for the year, and "

Y"is the amount, if any, calculated under subsection (21).

Same

(21) For the purposes of subsection (20), the amount is calculated using the formula,

Z B

in which, "

Z"is the amount that would be the tax payable for the year under paragraph 1, 2 or 3 of subsection 4 (3) by the person transferring the credits, less the credits the person would be entitled to deduct for the year under paragraphs 3, 8 and 12 of subsection 4 (3.1), and "

B"is the lesser of,

(a)the total of the tuition and education credits the person transferring the credits would be entitled to deduct for the year, and

(b)the amount that would be the tax payable for the year under paragraph 1, 2 or 3 of subsection 4 (3) by the person transferring the credits, less the credits the person would be entitled to deduct for the year under paragraphs 1 to 12 of subsection 4 (3.1).

Maximum transferred

(22) For the purposes of subsections (19) and (20), the person transferring the credits shall designate the amounts of tuition credit and education credit to be transferred for the year and the maximum amount that may be deducted under paragraphs 15 and 16 of subsection 4 (3.1) by an individual for a year in respect of these transferred credits must not exceed those amounts.

Medical expense credit

(23) The amount of an individual's medical expense credit for a taxation year is the amount calculated using the formula,

[A (B C)] (A/D E F)

in which, "

A"is the lowest tax rate for the year, "

B"is the total of the individual's medical expenses that are included in calculating the amount of his or her medical expense credit for the year under subsection 118.2 (1) of the Federal Act, "

C"is the lesser of $1,637 and 3 per cent of the individual's income for the year, "

D"is the lowest percentage referred to in subsection 117 (2) of the Federal Act that applies in determining the amount of tax payable under Part I of that Act for the year, "

E"is the percentage used in determining the amount of "D" for the year in the formula in subsection 118.2 (1) of the Federal Act, and "

F"is the total of all amounts each of which is the amount, if any, by which the income for the year of a person, other than the individual and the individual's spouse or common-law partner, in respect of whom an amount is included in computing the individual's medical expense credit for the year, exceeds $7,231.

Credit, charitable gifts, etc.

(24) The amount of an individual's credit for charitable and other gifts for a taxation year is the amount calculated using the formula,

(A G) + [H (J G)]

in which, "

A"is the lowest tax rate for the year, "

G"is the lesser of $200 and the amount of the individual's total gifts for the year under section 118.1 of the Federal Act, "

H"is the highest tax rate for the year, and "

J"is the amount of the individual's total gifts for the year under section 118.1 of the Federal Act.

Credit, student loan interest

(25) The amount of an individual's credit for a taxation year for interest on a student loan is the amount that would be determined in respect of the individual for the year under section 118.62 of the Federal Act if the appropriate percentage referred to in that section were the lowest tax rate.

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

Indexing, tax and credits

4.0.2 (1) For each taxation year ending after December 31, 2000, each dollar amount in the following is adjusted to the amount calculated using the formula in subsection (3):

1.Subsections 4 (3), 4.0.1 (2) to (6), (8), (10), (11), (18), (19), (20) and (23).

2.Paragraphs 118.2 (2) (b.1), (l.5) and (l.7) of the Federal Act, as they apply in determining the amount of an individual's medical expense credit deductible under paragraph 17 of subsection 4 (3.1).

Indexing, surtax

(2) For each taxation year ending after December 31, 2001, each dollar amount in paragraph 9 of subsection 3 (1) is adjusted to the amount calculated using the formula in subsection (3).

Formula

(3) The formula referred to in subsections (1) and (2) is,

A + [A (B/C 1)]

in which, "

A"is the dollar amount that applied under the subsection for the previous taxation year, or would have applied if the dollar amount had not been rounded to the nearest whole dollar, "

B"is the Consumer Price Index for Ontario for the 12-month period ending on September 30 of the last calendar year ending before the start of the taxation year, and "

C"is the Consumer Price Index for Ontario for the 12-month period ending the day before the start of the 12-month period described in the definition of "B".

Consumer Price Index

(4) The Consumer Price Index for Ontario for a 12-month period is the amount determined under the following rules:

1.The Consumer Price Index for Ontario for each month in the period, as published by Statistics Canada under the authority of the Statistics Act (Canada) and adjusted in such manner as may be prescribed, are added together.

2.The sum determined under paragraph 1 is divided by 12.

3.The amount determined under paragraph 2 is rounded to three decimal points and if the fourth decimal point is 5, the amount is rounded up to the next thousandth.

Rounding

(5) If an adjusted amount calculated under this section is not a whole dollar amount, the adjusted amount is rounded to the nearest whole dollar or, if the adjusted amount otherwise determined is 50 cents less than a whole dollar amount, the adjusted amount is rounded to that whole dollar amount.

Regulations

(6) The Lieutenant Governor in Council may make regulations prescribing rules governing the adjustment of dollar amounts in provisions of this Act not listed in subsection (1) or (2) or in provisions of the Federal Act that apply in determining amounts for the purposes of this Act.

53. The Act is amended by adding the following sections:

Application of s. 40, ITAR

4.5 (1) This section applies if an individual who resides in Ontario on the last day of a taxation year ending after December 31, 1999 receives in the taxation year a payment described in paragraph 40 (1) (a), (b) or (c) of the Income Tax Application Rules, 1971 (Canada) and is liable to pay an amount as tax for the taxation year under section 40 of the Income Tax Application Rules, 1971 (Canada) in respect of the payment.

Additional tax amount

(2) There must be added to the amount of tax otherwise payable by the individual for the taxation year the amount calculated using the formula,

A B/C

in which, "

A"is the total of all amounts each of which is a payment described in paragraph 40 (1) (a), (b) or (c) of the Income Tax Application Rules, 1971 (Canada) received by the individual in the taxation year, as determined for the purposes of section 40 of the Income Tax Application Rules, 1971 (Canada), "

B"is the total of all amounts each of which is the amount of tax otherwise payable by the individual for one of the three previous taxation years,

(a)under section 4 before making a deduction under subsection 4 (6) or section 8, if the previous taxation year ended before January 1, 2000,

(b)under section 4 before making a deduction under subsection 4 (3.4), (3.5), (4), (4.1) or (6) or under section 8, if the previous taxation year ended after December 31, 1999, and

(c)under the laws of a province other than Ontario, if the individual is subject to tax in a province other than Ontario for the previous taxation year, calculated in a manner comparable to the manner of calculating the amount described in clause (a) if the previous taxation year ended before January 1, 2000 or in clause (b) if the previous taxation year ended after December 31, 1999, and "

C"is the total of the individual's incomes for those three previous years.

Lump-sum payments

4.6 (1) This section applies to an individual for a particular taxation year ending after December 31, 1999 if the individual is resident in Ontario on the last day of the year and properly deducts an amount under subsection 110.2 (2) of the Federal Act in computing his or her taxable income for the year.

Additional tax amount

(2) There must be added to the amount of tax otherwise payable by the individual for the particular taxation year the total of all amounts each of which is the amount, if any, by which "A" exceeds "B" where, "

A"is the amount of the individual's notional tax payable for an eligible taxation year to which a specified portion of a qualifying amount received by the individual relates and in respect of which an amount is deducted under section 110.2 of the Federal Act in computing his or her taxable income for the particular taxation year, and "

B"is the individual's tax payable under section 4 for the eligible taxation year, calculated before the additional taxes, if any, payable under this section and sections 3, 4.3, 4.4 and 4.6 to 4.8.

Notional tax

(3) For the purposes of this section, the amount of an individual's notional tax payable for an eligible taxation year is the amount calculated using the formula,

C + D

in which, "

C"is the amount, if any, calculated under subsection (4), and "

D"is an amount, subject to subsection (5), that would be equal to the amount that would be calculated as interest payable on the amount determined as "C" if the interest were calculated,

(a)for the period that began on May 1 of the year following the eligible taxation year and ended immediately before the particular taxation year, and

(b)at the prescribed rate that is applicable for the purposes of subsection 164 (3) of the Federal Act with respect to that period.

Same

(4) The variable "C" in subsection (3) is the amount, if any, by which "E" exceeds "F" where, "

E"is the amount that would be the individual's tax payable under section 4 for the eligible taxation year,

(a)if the tax were calculated without reference to sections 3, 4.3, 4.4 and 4.6 to 4.8, and

(b)if the total of all amounts, each of which is the specified portion, in relation to the eligible taxation year, of a qualifying amount received by the individual before the end of the taxation year, were added in computing the individual's taxable income for the eligible taxation year, and "

F"is the total of all amounts each of which is an amount, in respect of a qualifying amount received by the individual before the taxation year, that was included because of clause (b) in the definition of "E" in computing the individual's notional tax payable for the eligible taxation year.

Exception

(5) For the purposes of subsection (3), the amount of "D" is nil unless the eligible taxation year ended before the taxation year preceding the particular taxation year.

Interpretation

(6) The definitions of "eligible taxation year", "qualifying amount" and "specified portion" in subsection 110.2 (1) of the Federal Act apply for the purposes of this section.

Calculation, prior years

4.7 If an individual resides in Ontario on the last day of a taxation year and is liable to pay an amount for the taxation year under section 4.3, 4.5 or 4.6, the amount of the payment must be determined as if the individual were resident in Ontario on the last day of each prior taxation year that is relevant to the determination of the amount payable under section 4.3, 4.5 or 4.6.

Tax on split income

4.8 (1) This section applies if an individual who is resident in Ontario on the last day of a taxation year ending after December 31, 1999 is a specified individual in relation to the taxation year and the individual is liable to pay an amount as tax under subsection 120.4 (2) of the Federal Act for the taxation year.

Additional tax

(2) There must be added to the amount of tax payable by the individual for the taxation year the amount determined by multiplying the highest tax rate for the taxation year by the individual's split income for the taxation year.

Maximum tax amount

(3) Despite any other provision of this Act, the tax payable for a taxation year by an individual who is a specified individual in relation to the taxation year must not be less than the amount by which "A" exceeds "B" where, "

A"is the amount added under subsection (2) to the individual's tax payable for the taxation year, and "

B"is the total of all amounts each of which is an amount,

(a)that may be deducted under subsection 4 (3.4) or (6) in computing the individual's tax payable for the taxation year, and

(b)that can reasonably be considered to be in respect of an amount included in computing the individual's split income for the taxation year.

Interpretation

(4) The definitions of "specified individual" and "split income" in subsection 120.4 (1) of the Federal Act apply for the purposes of this section.

54. (1) The definition of "benefit year" in subsection 7.1 (1) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 15, is repealed and the following substituted: "

benefit year" means the 1999 calendar year. ("anne vise")

(2) The definition of "eligible individual" in subsection 7.1 (1) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 15, is repealed and the following substituted: "

eligible individual" means an individual other than a trust. ("particulier admissible")

(3) Subsections 7.1 (2) and (3) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 15, are repealed and the following substituted:

Deemed overpayment of tax

(2) An eligible individual shall be deemed to have made an overpayment on October 6 of the year after the benefit year on account of the tax payable by the individual under this Act for a taxation year ending in or at the same time as the benefit year if the following conditions are satisfied:

1.The individual files a return of income for the taxation year within 12 months after the end of the benefit year.

2.On December 31 of the benefit year or on the day in the benefit year the individual dies, if he or she dies in the benefit year,

i.the individual is resident in Ontario,

ii.the individual is not resident in Canada and has reported for work at a permanent establishment of an employer in Ontario throughout the benefit year, or

iii.the individual is not resident in Ontario, is resident in Canada and has income earned in the taxation year in Ontario, for the purposes of section 4.

3.The amount of tax payable by the individual for the taxation year, as determined on assessment or reassessment by the Provincial Minister, exceeds nil.

Amount

(3) Subject to subsections (3.1) and (4), the amount of the deemed overpayment for a benefit year is the lesser of $200 and the total tax otherwise payable by the eligible individual for all taxation years ending in or at the same time as the benefit year.

Multiple taxation years

(3.1) The following rules apply if an individual has more than one taxation year ending in a benefit year or if more than one return may be filed in respect of his or her income for the benefit year:

1.If the individual is a bankrupt at any time in the benefit year, the amount of the deemed overpayment for the benefit year must not exceed $200 and is determined on the basis of each return of income of the individual, other than a return filed under paragraph 128 (2) (e) of the Federal Act.

2.If the individual dies in the benefit year, the amount of the deemed overpayment for the benefit year must not exceed $200 and is determined without reference to information in any return that may be filed on behalf of the individual under subsection 70 (2), paragraph 104 (23) (d) or subsection 150 (4) of the Federal Act.

(4) Subsection 7.1 (5) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 15, is amended by adding "and" at the end of clause (a) and by striking out clause (b).

(5) Subsection 7.1 (6) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 15, is repealed and the following substituted:

Notice and payment

(6) After making a determination under subsection (5), the Provincial Minister,

(a)may send a notice setting out the amount of the overpayment to an eligible individual who is deemed to have made an overpayment; and

(b)shall pay a rebate to the individual equal to the amount of the deemed overpayment.

Time limit

(6.1) The Provincial Minister shall not pay a rebate under this section after December 31, 2001 and no individual is entitled to receive a rebate under this section unless it is paid to the individual before January 1, 2002.

(6) Section 7.1 of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 15, is amended by adding the following subsection:

Exception

(7.1) No amount is repayable under subsection (7) if the amount of the individual's rebate is reduced by reason of an assessment or reassessment of tax issued after December 31, 2001.

(7) Subsection 7.1 (9) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 15, is repealed and the following substituted:

Deemed refund of tax

(9) For the purposes of section 164 of the Federal Act as it applies for the purposes of this Act, a rebate paid under this section shall be deemed to be a refund of tax under this Act.

Exception

(10) Despite subsection (9), no interest is payable on the amount of a rebate under this section or on an amount repayable under subsection (7).

Repeal

(11) This section is repealed on January 1, 2002.

55. (1) The definitions of "tax payable" and "tax otherwise payable" in subsection 8 (1) of the Act are amended by striking out "without reference to subsections 120.1, 121 and 122.3 of the Federal Act" and substituting "without reference to section 120.1 of the Federal Act and subsections 4 (3.4) and (3.5) of this Act."

(2) Section 8 of the Act, as amended by the Statutes of Ontario, 1992, chapter 18, section 55, 1992, chapter 25, section 3, 1993, chapter 29, section 6, 1994, chapter 17, section 99, 1996, chapter 1, Schedule C, section 8, 1996, chapter 24, section 13, 1996, chapter 29, section 9, 1997, chapter 19, section 9, 1997, chapter 43, Schedule B, section 4, 1998, chapter 5, section 3, 1998, chapter 9, section 81, 1998, chapter 34, section 69 and 1999, chapter 9, section 120, is further amended by adding the following subsection:

Property tax credit extension for 1999,

certain taxpayers

(7.2) For the purpose of clause (3) (a) or (3.1) (a), the amount of an individual's 1999 municipal tax that is due in 2000 and paid by the due date may be used to determine the individual's occupancy cost for 1999 or 2000, if the individual's principal residence in 1999 was in an area of jurisdiction of a school board in a territory without municipal organization.

(3) Subsection 8 (8.1.1) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 24, section 13 and amended by 1997, chapter 43, Schedule B, section 4 and 1998, chapter 34, section 69, is further amended by striking out "and" at the end of clause (d) and by striking out clause (e) and substituting the following:

(e)$750 for each of the 1998, 1999 and 2000 taxation years; and

(f)for the 2001 and each subsequent taxation year, unless otherwise prescribed, the amount equal to the total of,

(i)the lesser of $750 and the amount equal to 15 per cent of the equity capital received from the taxpayer during that taxation year or during the first 60 days of the following year by the corporations on the issue of Class A shares, and

(ii)the lesser of $250 and the amount equal to 5 per cent of the equity capital received from the taxpayer during that taxation year or during the first 60 days of the following year by the corporations on the issue of Class A shares, if the shares were issued by the corporations as research oriented investment funds under subsection 16.1 (2) of the Community Small Business Investment Funds Act.

(4) Section 8 of the Act, as amended by the Statutes of Ontario, 1992, chapter 18, section 55, 1992, chapter 25, section 3, 1993, chapter 29, section 6, 1994, chapter 17, section 99, 1996, chapter 1, Schedule C, section 8, 1996, chapter 24, section 13, 1996, chapter 29, section 9, 1997, chapter 19, section 9, 1997, chapter 43, Schedule B, section 4, 1998, chapter 5, section 3, 1998, chapter 9, section 81, 1998, chapter 34, section 69 and 1999, chapter 9, section 120, is further amended by adding the following subsection:

Educational technology tax credit

(15.4) An individual who is an eligible individual under section 8.4.1 for a taxation year may deduct from the amount of tax otherwise payable under this Act for the taxation year an amount not exceeding the amount of his or her educational technology tax credit determined under that section for the taxation year.

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

Educational technology tax credit

8.4.1 (1) The amount of an eligible individual's educational technology tax credit for a taxation year under subsection 8 (15.4) is the amount determined under subsection (2) in respect of eligible equipment that is donated or sold or eligible learning technology that is donated, sold or licensed to an eligible educational institution by the eligible individual after May 2, 2000 and during the taxation year.

Amount of credit

(2) The amount of an eligible individual's educational technology tax credit for a taxation year is the total of all amounts each of which is calculated, in respect of eligible equipment that is donated or sold or eligible learning technology that is donated, sold or licensed to an eligible educational institution in the taxation year, using the formula,

(A B) 0.05

in which, "

A"is the individual's notional price for the equipment or technology, and "

B"is the fair market value of the consideration, if any, paid or payable by the institution for the equipment or technology.

Partnerships

(3) An eligible individual who is a member of an eligible partnership at the end of a taxation year may claim a tax credit equal to the amount described in paragraph 3 in the circumstances described in paragraphs 1 and 2:

1.In a fiscal period of the partnership that ends in the taxation year, the partnership donates or sells eligible equipment or donates, sells or licensed eligible learning technology to an eligible educational institution.

2.If the donation or sale had been made or the licence had been given by an eligible individual, the individual would be entitled to claim a tax credit under this section.

3.The amount of the tax credit the individual may claim is the amount that may reasonably be considered to be the individual's share of the amount that the partnership would be entitled to deduct in respect of the donation, sale or licence if the partnership were a corporation.

Limited partner

(4) Despite subsection (3), no amount may be claimed under this section by an eligible individual in respect of a donation or sale of eligible equipment or a donation, sale or licence of eligible learning technology by a partnership in which the individual is a limited partner.

Certificate

(5) An eligible educational institution shall issue a certificate to the eligible individual or partnership that donates or sells eligible equipment or that donates, sells or licenses eligible learning technology to it, stating that the equipment or technology is eligible equipment or eligible learning technology for the purposes of this section.

Same

(6) The certificate must be issued in a form and be given to the individual or partnership in a manner approved by the Provincial Minister.

Status of certificate

(7) Unless otherwise directed by the Provincial Minister, the certificate forms part of the records and books of account required to be kept under subsection 230 (1) of the Federal Act by the eligible individual making the donation or sale or giving the licence.

Provincial Minister's direction and order

(8) If an eligible educational institution issues one or more incorrect certificates,

(a)the Provincial Minister may direct the educational institution to cease issuing certificates under this section; and

(b)the Provincial Minister may order that all or some of any equipment donated or sold to the institution or all or some of any technology donated, sold or licensed to the institution is not eligible equipment or eligible learning technology for the purposes of this section.

Revocation

(9) The Provincial Minister may revoke a direction or order, or both, made under subsection (8) if he or she is satisfied that the eligible educational institution will comply with the directions with respect to the accuracy, form and content of certificates given under this section.

Conditions

(10) The Provincial Minister may impose such conditions on the revocation of the direction and order under subsection (9) as he or she considers reasonable.

Effect of revocation

(11) Upon the revocation of a direction and order, the equipment or technology that would have otherwise been eligible equipment or eligible learning technology is, to the extent approved by the Provincial Minister, eligible equipment or eligible learning technology for the purposes of this section and may be certified as such by the educational institution.

Definitions

(12) In this section, "

eligible educational institution" means an educational institution that is an eligible educational institution for the purposes of section 13.5 of the Corporations Tax Act\; ("tablissement d'enseignement autoris") "

eligible equipment" means equipment that is eligible equipment for the purposes of section 13.5 of the Corporations Tax Act\; ("matriel admissible") "

eligible individual" means, in respect of a taxation year, an individual,

(a)who carries on business through a permanent establishment in Ontario in the taxation year, and

(b)who is not exempt from tax under section 6; ("particulier admissible") "

eligible learning technology" means technology that is eligible learning technology for the purposes of section 13.5 of the Corporations Tax Act\; ("technologie d'apprentissage admissible") "

eligible partnership" means, in respect of a fiscal period, a partnership,

(a)that has one or more members, other than limited partners, who are eligible individuals for the taxation year in which the fiscal period ends, and

(b)that carries on business through a permanent establishment in Ontario in the fiscal period; ("socit admissible") "

notional price" means, in respect of eligible equipment that is donated or sold or eligible learning technology that is donated, sold or licensed in a taxation year to an eligible educational institution,

(a)the lowest amount that the individual would normally have charged in the year on a sale or licensing of the equipment or technology to a person dealing at arm's length with the individual, within the meaning of section 251 of the Federal Act, if the individual carries on a business of selling eligible equipment or selling or licensing eligible learning technologies in the taxation year, or

(b)the cost to the individual of the equipment or technology, in any other case. ("prix thorique")

57. (1) Section 8.6 of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 74, is amended by adding the following subsection:

Investigations, refunds

(1.1) Any person authorized by the Provincial Minister for any purpose related to the administration or enforcement of section 8.7 may at all reasonable times enter into any premises or place where any business is carried on, where any property is kept, where anything is done in connection with any business or where any books or records are kept or should be kept that contain information relevant in the administration of that section and,

(a)audit or examine the books and records and any account, voucher, letter, telegram or other document that relates to or may relate to the information that is or should be in the books or records, or that relates to or may relate to any amount taken into consideration in determining an amount under that section or the eligibility of any individual to receive an amount under that section;

(b)examine any property, process or matter, an examination of which may, in the person's opinion, assist in determining the accuracy of an application under that section or in ascertaining the information that is or should be in the books or records or in such application, or the amount of any payment under that section; and

(c)require any person on the premises to give him or her all reasonable assistance with the audit or examination and to answer all questions relating to the audit or examination, either orally or, if he or she so requires, in writing, on oath or by statutory declaration, and for that purpose, he or she may require the person to attend at the premises or place with him or her.

(2) Subsection 8.6 (2) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 74, is amended by striking out the portion before clause (a) and substituting the following:

Demand for information

(2) For any purpose related to the administration or enforcement of this section and section 8.5 or 8.7, the Provincial Minister may require from any person, partnership, syndicate, trust, corporation, delivery agent under section 8.5 or other entity or from any partner, agent, member, director or officer of it, by registered letter, or by a demand served personally or delivered by a courier service, within such reasonable time as is stipulated in the registered letter or demand,

. . . . .

58. Part II of the Act is amended by adding the following Division:

Division C.1 - Tax Overpayments

Ontario research employee stock option

tax overpayment

8.7 (1) An individual other than a trust shall be deemed to have made an overpayment on account of tax payable under this Act for a taxation year in the amount of his or her Ontario research employee stock option tax overpayment, if any, for the year if the following conditions are satisfied:

1.The individual is deemed to receive a benefit under section 7 of the Federal Act in the taxation year in respect of an eligible stock option agreement or has realized a capital gain on the sale of shares acquired on the exercise of rights under an eligible stock option agreement.

2.The individual is resident in Ontario on December 31 of the calendar year in which the taxation year ends, or on the day in that calendar year the individual dies if he or she dies in that year.

3.The individual was resident in Ontario on December 31 of the calendar year in which the eligible stock option agreement was entered into.

4.The individual is not an ineligible individual in respect of the eligible stock option agreement.

5.The individual deducted an amount under paragraph 110 (1) (d) or (d.1) of the Federal Act in respect of a benefit relating to the eligible stock option agreement in computing his or her income for the taxation year or a prior taxation year.

6.The individual has filed a return of income under this Act and the Federal Act for the taxation year.

7.The individual is an eligible employee of an eligible employer at the time the eligible employer or a corporation not dealing at arm's length with the eligible employer enters into the eligible stock option agreement.

Amount

(2) The amount of an individual's Ontario research employee stock option tax overpayment for a taxation year is the amount by which "A" exceeds "B" where, "

A"is the amount of tax payable under this Act by the individual for the taxation year before any refund under this section, and "

B"is the individual's adjusted tax amount for the taxation year.

Ineligible individual

(3) An individual is an ineligible individual in respect of an eligible stock option agreement if,

(a)the individual is a specified shareholder of the eligible employer or the corporation that entered into the agreement or of a corporation that is associated with the eligible employer at any time in the taxation year of the eligible employer in which the agreement is entered into or at any time in its five previous taxation years; or

(b)the individual would be a specified shareholder referred to in clause (a) if the individual were to own every share of the capital stock of the eligible employer or the corporation, as the case may be, that the individual, or a person with whom the individual did not deal at arm's length, had a right at that time to acquire under a contract, either immediately or in the future and either absolutely or contingently.

Adjusted tax amount

(4) An individual's adjusted tax amount for a taxation year is the amount of tax that would be payable by the individual under this Act for the year if the individual's taxable income for the year were equal to the individual's adjusted taxable income under this section.

Adjusted taxable income

(5) An individual's adjusted taxable income for a taxation year is the amount determined by deducting from the individual's taxable income for the year the amount that is the lesser of,

(a)$100,000; and

(b)the sum of all amounts each of which is,

(i)the individual's benefit under section 7 of the Federal Act for the taxation year in respect of an eligible stock option agreement, less any deduction claimed under paragraph 110 (1) (d) or (d.1) of that Act in respect of the benefit in computing the individual's taxable income for the taxation year, or

(ii)the lesser of the individual's taxable capital gain for the taxation year from the disposition of shares of a corporation acquired by the individual on the exercise of rights under an eligible stock option agreement and the amount calculated under subsection (6) in respect of the individual for the taxation year.

Calculate amount

(6) For the purposes of subclause (5) (b) (ii), the amount is calculated using the formula,

A (B + C + D)

in which, "

A"is the net taxable capital gain included in computing the individual's income for the taxation year under paragraph 3 (b) of the Federal Act, "

B"is the allowable business investment loss, if any, deducted in computing the individual's income for the taxation year, "

C"is the net capital loss, if any, deducted in computing the individual's taxable income for the taxation year, and "

D"is the amount, if any, deducted in computing the individual's taxable income for the taxation year under subsection 110.6 (2.1) of the Federal Act.

Eligible employee

(7) For the purposes of this section, an individual is an eligible employee at the time the stock option agreement in respect of the individual is entered into if the following conditions are satisfied:

1.The individual is a full-time or permanent part-time employee of an eligible employer during the taxation year of the employer in which the employer or a corporation not dealing at arm's length with it enters into the stock option agreement.

2.The individual is employed by the eligible employer for a period of at least 6 consecutive months and the period of employment includes at least part of that taxation year.

3.The individual is not an incorporated employee providing services on behalf of a personal services business, within the meaning of subsection 125 (7) of the Federal Act, at any time in that taxation year or in any of the eligible employer's five previous taxation years to,

i.the eligible employer,

ii.the corporation that entered into the agreement,

iii.a corporation associated with the eligible employer, or

iv.a partnership of which the eligible employer, the corporation that entered into the agreement or a corporation associated with the eligible employer is a member.

4.The individual's R & D work time percentage or R & D wage percentage is at least 30 per cent for that taxation year.

R & D work time percentage

(8) An individual's R & D work time percentage for an eligible employer's taxation year is the percentage calculated using the formula,

E/F 100%

in which, "

E"is the number of hours during the taxation year in which the individual provided employment services by directly undertaking or supervising in Ontario the prosecution of scientific research and experimental development, if

(a)the salary or wages for the employment services are expenditures directly attributable to the prosecution of scientific research and experimental development under paragraph 2900 (2) (b) of the Federal Regulations, and

(b)the employment services are provided to the employer, a corporation associated with the employer or a partnership of which the employer or a corporation associated with the employer is a partner, and "

F"is the total number of hours in the taxation year in which the individual provided employment services to the employer, a corporation associated with the employer or a partnership of which the employer, or a corporation associated with the employer, is a partner.

R & D wage percentage

(9) An individual's R & D wage percentage for an eligible employer's taxation year is the percentage calculated using the formula,

E/F 100%

in which, "

E"is the individual's total salary or wages for the employer's taxation year for providing employment services by directly undertaking or supervising in Ontario the prosecution of scientific research and experimental development if,

(a)the salary or wages for the employment services are expenditures directly attributable to the prosecution of scientific research and experimental development under paragraph 2900 (2) (b) of the Federal Regulations, and

(b)the employment services are provided to the employer, a corporation associated with the employer or a partnership of which the employer or a corporation associated with the employer is a partner, and "

F"is the individual's total salary or wages for the employer's taxation year for providing employment services to the employer, a corporation associated with the employer or a partnership of which the employer, or a corporation associated with the employer, is a partner.

Eligible employer

(10) For the purposes of this section, an employer is an eligible employer at the time a stock option agreement is entered into by the employer or by a corporation not dealing at arm's length with the employer if the following conditions are satisfied:

1.The employer is a corporation.

2.Throughout the taxation year of the employer in which the stock option agreement is entered into, the employer carries on business through a permanent establishment in Ontario, either directly or as a member of a partnership.

3.In the taxation year before the year in which the stock option agreement is entered into, the employer undertakes scientific research and experimental development at a permanent establishment in Ontario, either directly or as a member of a partnership that directly undertakes the research and development.

4.The employer's eligible expenditures for the taxation year before the year in which the stock option agreement is entered are not less than $25 million or 10 per cent of the employer's total revenue for that taxation year, whichever is less.

Research by associated corporation

(11) For the purposes of paragraph 3 of subsection (10), scientific research and experimental development directly undertaken by a person at a permanent establishment in Ontario during a taxation year of the employer shall be deemed to be directly undertaken by the employer if,

(a)the person is a corporation associated throughout the taxation year with the employer; and

(b)the person undertakes the research and development directly or as a member of a partnership that directly undertakes the research and development.

Eligible expenditures

(12) Subject to subsection (16), an eligible employer's eligible expenditures for a taxation year include,

(a)the employer's proportionate share of any expenditures incurred by a partnership of which it is a member during a fiscal period of the partnership that ends in the particular taxation year that would be eligible expenditures if incurred by a corporation; and

(b)eligible expenditures incurred by each corporation that is associated with the employer throughout the taxation year and that has a permanent establishment in Canada for any taxation year of the associated corporation that ends in the taxation year, including the associated corporation's proportionate share of any expenditures incurred by a partnership of which it is a member during a fiscal period of the partnership that ends in the associated corporation's taxation year that would be eligible expenditures if incurred by a corporation.

Total revenue

(13) Subject to subsection (16), the total revenue of an eligible employer for a taxation year includes,

(a)the employer's proportionate share of the total revenue of a partnership of which it is a member during a fiscal period of the partnership that ends in the taxation year; and

(b)the total revenue of each corporation that is associated with the employer throughout the taxation year and that has a permanent establishment in Canada for any taxation year of the associated corporation that ends in the taxation year, including the associated corporation's share of the total revenue of any partnership of which it is a member for a fiscal period ending in the associated corporation's taxation year.

Partner

(14) A partner's proportionate share of an amount in respect of the partnership for a fiscal period is,

(a)nil if the partner is a specified member of the partnership at any time in the fiscal period; or

(b)the amount determined by multiplying the amount by the ratio of the partner's share of the income or loss of the partnership for that fiscal period to the total income or loss of the partnership for that fiscal period, in any other case.

Start-ups

(15) For the purposes of subsection (10), if the taxation year in which the stock option agreement is entered into is the first taxation year of the employer after it was incorporated or is the first taxation year in which it carries on business, references to the taxation year before that year are read as references to that year.

Short or multiple taxation years

(16) In determining the amount of eligible expenditures and total revenue for a taxation year for the purposes of this section, the following rules apply:

1.If the taxation year is less than 51 weeks and is the only taxation year ending in a calendar year, the eligible expenditures and total revenue for the taxation year are the amounts otherwise determined, multiplied by the ratio of 365 to the number of days in the taxation year.

2.If the taxation year is not the only taxation year of the eligible employer ending in the same calendar year, the amount of the employer's eligible expenditures and total revenue for the taxation year is the total of those amounts for all taxation years ending in that calendar year, as otherwise determined, multiplied by the ratio of 365 to the total number of days in those taxation years.

3.If the taxation year of a corporation that is associated with the eligible employer is less than 51 weeks and is the only taxation year of the associated corporation ending in the employer's taxation year, the corporation's eligible expenditures and total revenue for that taxation year are the amounts otherwise determined, multiplied by the ratio of 365 to the number of days in the taxation year.

4.If a fiscal period of a partnership of which the eligible employer or the associated corporation is a member is less than 51 weeks and is the only fiscal period of the partnership ending in the taxation year of the employer or the associated corporation, as the case may be, the eligible expenditures and total revenue of the partnership for that fiscal period are the amounts otherwise determined, multiplied by the ratio of 365 to the number of days in the fiscal period.

5.If a corporation who is associated with the eligible employer has two or more taxation years ending in the employer's taxation year, the eligible expenditures and total revenue of the associated corporation for the taxation year ending in the employer's taxation year are the total of those amounts for all of its taxation years ending in the employer's taxation year, as otherwise determined, multiplied by the ratio of 365 to the total number of days in all of those taxation years.

6.If a partnership of which the eligible employer or the associated corporation is a member has two or more fiscal periods ending in the taxation year of the employer or the associated corporation, as the case may be, the eligible expenditures and total revenue for the fiscal period of the partnership ending in the taxation year of the employer or the associated corporation, as the case may be, are those amounts for all of its fiscal periods ending in the taxation year, as otherwise determined, multiplied by the ratio of 365 to the total number of days in all of the fiscal periods.

Eligible expenditures

(17) Eligible expenditures of an entity for a taxation year or fiscal period for the purposes of this section is the amount calculated using the formula,

A + B C

in which, "

A"is the total amount of the expenditures incurred by the entity in the taxation year or fiscal period at a permanent establishment in Ontario each of which would be a qualified expenditure under subsection 12 (1) of the Corporations Tax Act and is,

(a)an amount described in subparagraph 37 (1) (a) (i) or 37 (1) (b) (i) of the Federal Act, or

(b)a prescribed proxy amount of the entity for the taxation year referred to in paragraph (b) of the definition of "qualified expenditures" in subsection 127 (9) of the Federal Act, "

B"is the reduction, if any, in the amount of "A" required under subsections 127 (18) to (20) of the Federal Act in respect of a contract payment, and "

C"is the total of all amounts each of which is paid or payable by the entity in the taxation year or fiscal period that are included in the amount of "A" and that would be contract payments as defined in subsection 127 (9) of the Federal Act to the recipient of the amount.

Certificate to Provincial Minister

(18) The eligible employer shall deliver to the Provincial Minister, in a form and manner satisfactory to the Provincial Minister, on or before the date by which the employer is required by section 75 of the Corporations Tax Act to deliver a return for its taxation year in which an eligible stock option agreement was entered into,

(a)a certificate certifying that it is an eligible employer for the taxation year for the purposes of this section and certifying the date it or a corporation not dealing at arm's length with it entered into the eligible stock option agreement;

(b)such information as the Provincial Minister may require to verify that the employer is an eligible employer; and

(c)a list containing the names and social insurance numbers of all eligible employees in respect of whom the agreement was entered into.

Certificate to employee

(19) The eligible employer shall deliver to every individual who is an eligible employee in relation to an eligible stock option agreement a certificate certifying,

(a)that the stock option agreement is an eligible stock option agreement for the purposes of this section; and

(b)that the employee is an eligible employee in relation to the agreement for the purposes of this section.

Same

(20) The certificate under subsection (19) must be in a form approved by the Provincial Minister and must be delivered in a manner acceptable to the Provincial Minister on or before the day by which the eligible employer is required by section 75 of the Corporations Tax Act to deliver a return for its taxation year in which the eligible stock option agreement was entered into.

Notice of benefit, Provincial Minister

(21) The eligible employer in respect of an eligible stock option agreement shall notify the Provincial Minister of the following information:

1.The name, address and social insurance number of each individual who is deemed under section 7 of the Federal Act to receive a benefit relating to the agreement during the relevant calendar year.

2.The amount of the benefit deemed by section 7 of the Federal Act to have been received in the calendar year by each of them.

Same

(22) The notice under subsection (21) must be in a form approved by the Provincial Minister and must be delivered to the Provincial Minister in a manner acceptable to the Provincial Minister on or before the day by which the eligible employer is required by section 75 of the Corporations Tax Act to deliver a return for its first taxation year ending after the calendar year in which the individual is deemed to have received the benefit.

Notice of benefit, employee

(23) The eligible employer shall notify the individual if a benefit deemed to be received by him or her in a calendar year under section 7 of the Federal Act relates to an eligible stock option agreement.

Same

(24) The notice under subsection (23) must be in a form approved by the Provincial Minister and must be delivered in a manner acceptable to the Provincial Minister on or before the day by which the eligible employer is required by section 75 of the Corporations Tax Act to deliver a return for its first taxation year ending after the calendar year in which the individual is deemed to have received the benefit.

Application by individual

(25) An individual who is deemed by this section to have made an overpayment on account of tax payable under this Act for a taxation year in respect of one or more eligible stock option agreements may apply for a refund of the overpayment by filing an application with the Provincial Minister, certifying that he or she satisfies the conditions in subsection (1) and setting out the following information:

1.The year in which each eligible stock option agreement was entered into.

2.The amount of all benefits included in computing his or her income for the taxation year under section 7 of the Federal Act in respect of the eligible stock option agreements.

3.All amounts deducted in computing the individual's taxable income for the taxation year under paragraph 110 (1) (d) or (d.1) of the Federal Act in respect of the benefits.

4.The amount of any taxable capital gains realized by the individual from the disposition of shares acquired through exercising rights under any of the eligible stock option agreements if the taxable capital gains were included in computing the individual's income for the taxation year.

5.The amount of the net taxable capital gains included in computing the individual's income for the taxation year.

6.The amount of any allowable business investment loss deducted in computing the individual's income for the taxation year.

7.The amount of any net capital loss deducted in computing the individual's taxable income for the taxation year.

8.The amount deducted under subsection 110.6 (2.1) of the Federal Act in computing the individual's taxable income for the taxation year.

9.The amount of the individual's taxable income for the taxation year.

10.The amount of tax payable by the individual for the taxation year under this Act, before any refund under this section.

Same

(26) The application under subsection (25) must be in a form approved by the Provincial Minister and must be delivered on or before September 30th of the second calendar year beginning after the taxation year to which the overpayment relates.

Filing of certificate

(27) The individual shall file with the application true copies of all certificates received from eligible employers relating to eligible stock option agreements.

Late application

(28) The Provincial Minister may accept an application that is not filed on time if,

(a)the application is filed no later than two years after the last date by which it is required to be filed under this section; and

(b)the Provincial Minister is satisfied that the individual was unable to file the application at an earlier time for reasons beyond his or her control.

Notice of change

(29) Every employer and corporation that has filed a certificate or notice with the Provincial Minister under this section shall notify the Provincial Minister in a form and manner satisfactory to the Provincial Minister of any change in the information provided to the Provincial Minister.

Time

(30) The notice under subsection (29) must be filed with the Provincial Minister on or before the last day of the second month following the month in which the employer or corporation becomes aware that the information is inaccurate or has changed, whether the inaccuracy or change is a result of a reassessment of tax or is due to another reason.

Restriction

(31) No application may be made under this section if the tax payable under this Act is in respect of taxable income reported in a return filed pursuant to an election made under subsection 104 (23) or 150 (4) of the Federal Act, or a return filed under paragraph 128 (2) (e) or (h) of the Federal Act.

Determination by Provincial Minister

(32) The Provincial Minister shall determine whether the individual is deemed under this section to have made an overpayment of tax for the taxation year and the amount of his or her Ontario research employee stock option tax overpayment, if any, for the year.

Refund of overpayment

(33)

After making a determination under subsection (32), the Provincial Minister shall pay a refund to the individual in the amount, if any, of the individual's Ontario research employee stock option tax overpayment for the year.

Deemed refund of tax

(34) For the purposes of section 164 of the Federal Act, as it applies for the purposes of this Act, a refund paid under this section is a refund of tax under this Act.

Interest

(35) Despite any other provision of this Act or the Federal Act, interest is payable on the amount of a refund under this section only in accordance with the rules in section 8.8.

Anti-avoidance provision

(36) Despite any other provision of this section, the Provincial Minister may disallow an individual's application under this section unless the individual entered into an employment relationship with the eligible employer for bona fide purposes other than to obtain a tax refund under this section.

Shares held in trust

(37) If an individual is entitled to deduct and has deducted an amount under subsection 8 (12) of the Federal Act in computing his or her income for the taxation year in respect of shares issued under an eligible stock option agreement that the individual is deemed to have disposed of under subsection 7 (2) of the Federal Act, the following rules apply:

1.The eligible employer in relation to the eligible stock option agreement shall notify the Provincial Minister in a form and manner satisfactory to the Provincial Minister that the conditions in paragraphs 8 (12) (a) to (d) of the Federal Act have been satisfied.

2.The individual shall repay to the Provincial Minister all or the portion of all refunds paid to the individual in respect of the eligible stock option agreement that reasonably relate to the shares.

Regulations

(38) The Lieutenant Governor in Council may make regulations,

(a)prescribing, with or without modifications, provisions of the Federal Act that apply for the purposes of this section and the manner in which they apply;

(b)prescribing the ordering of disposition of identical properties for the purposes of determining amounts relevant to calculations under this section;

(c)governing the provision of such information as the Provincial Minister may require for the administration of this section;

(d)prescribing the method of determining a corporation's eligible expenditures and total revenue after a purchase or sale of assets used in carrying on its business.

Indemnity

(39) No action or other proceeding for damages or otherwise may be instituted against a person for an act done in good faith in the execution or intended execution of a duty or authority under this section or for an alleged neglect or default in the execution in good faith of any such duty or authority under this section.

Non-arm's length

(40) Persons are not dealing at arm's length for the purposes of this section if they are not dealing at arm's length for the purposes of the Federal Act.

Definitions

(41) In this section, "

associated" means, in respect of a corporation and another person, associated within the meaning of subsection 256 (1) of the Federal Act; ("associ") "

eligible stock option agreement" means a stock option agreement, other than a replacement option agreement,

(a)that is entered into by an eligible employer, or by a corporation that does not deal at arm's length with the eligible employer, after the day the Balanced Budgets for Brighter Futures Act, 2000 receives Royal Assent,

(b)that provides for the sale or issue of shares to an individual who is an eligible employee of the eligible employer at the time the stock option agreement is entered into, and

(c)that is entered into in the course of or by virtue of the eligible employee's employment with the eligible employer; ("convention d'option d'achat d'actions admissible") "

permanent establishment" has the meaning,

(a)given to that expression by subsection 400 (2) of the Federal Regulations in references to a permanent establishment in Canada, and

(b)given to that expression by section 4 of the Corporations Tax Act in references to a permanent establishment in Ontario; ("tablissement permanent") "

permanent part-time employee" has the meaning assigned to it by subsection 1 (1) of the regulations made under the Employment Equity Act (Canada); ("employ permanent temps partiel") "

replacement option agreement" means a stock option agreement that is entered into after the day the Balanced Budgets for Brighter Futures Act, 2000 receives Royal Assent if it is reasonable to consider that the purpose of the agreement is to replace a stock option agreement that was entered into on or before that day; ("convention de remplacement") "

stock option agreement" means an agreement pursuant to which a corporation agrees to sell or issue shares of the capital stock of the corporation or of a corporation with which it does not deal at arm's length to an employee of the corporation or of a corporation with which it does not deal at arm's length; ("convention d'option d'achat d'actions") "

total revenue" means,

(a)for a taxation year of a corporation, the amount that would be the corporation's gross revenue for the taxation year, as determined in accordance with generally accepted accounting principles except that the consolidation and equity methods must not be used, if the gross revenue excluded revenue from transactions with,

(i)corporations that are associated with the corporation throughout the taxation year and that have permanent establishments in Canada in the taxation year, or

(ii)partnerships of which the corporation or a corporation described in subclause (i) is a member, or

(b)for a fiscal period of a partnership of which a corporation is a member, the amount that would be the partnership's gross revenue for the fiscal period, as determined in accordance with generally accepted accounting principles except that the equity method must not be used, if the gross revenue excluded revenue of the partnership from transactions with,

(i)the corporation, or

(ii)corporations that are associated with the corporation throughout the taxation year in which the fiscal period ends and that have permanent establishments in Canada in that taxation year. ("revenu total")

Set-off

8.8 (1) If an individual entitled to a refund under section 8.7 is liable or is about to become liable to make a payment to the Crown in right of Ontario, the Provincial Minister may apply all or part of the refund to that liability instead of paying the refund to the individual.

Interest

(2) If an individual's refund under section 8.7 for a taxation year is paid or applied to a liability of the individual, the Provincial Minister shall pay or apply interest on the refund at the rate prescribed by the regulations for the period,

(a)that begins on the day that is 45 days after the later of the day the individual is required to file his or her return of income for the year and the day he or she does file the return; and

(b)that ends on the day when the refund is paid or applied.

Repayment

(3) If an individual receives a refund under section 8.7 to which he or she is not entitled or in an amount greater than the amount to which he or she is entitled, the individual shall repay the amount or the excess amount, as the case may be, to the Provincial Minister.

Interest on repayment

(4) Amounts repayable under subsection (3) shall bear interest in accordance with the prescribed rules and may be collected as tax payable under this Act.

Minimum payment

(5) Despite any other provision of this Act, where the unpaid balance of the refund payable to an individual under section 8.7 does not exceed the amount determined by the Provincial Minister, the Minister is not required to pay that balance or any interest under subsection (2) on that balance.

Notice of entitlement

(6) After making a determination for the purposes of section 8.7, the Provincial Minister shall send to the individual a notice of entitlement setting out the following if the individual is entitled to a refund under the section:

1.The amount of the overpayment under the section.

2.The basis on which the determination is made.

3.Information on the individual's right to object to the notice of entitlement.

Day of mailing

(7) The day of mailing of a notice of entitlement under this section is deemed to be the date of the notice.

59. Section 10 of the Act, as amended by the Statutes of Ontario, 1997, chapter 10, section 4, 1998, chapter 34, section 75 and 1999, chapter 9, section 123, is further amended by adding the following subsections:

Same

(1.1) Subsection 152 (1) of the Federal Act applies to a refund of a deemed overpayment of tax under section 8.7.

Same

(1.2) Despite subsection 152 (3.1) of the Federal Act, the normal reassessment period for a taxation year with respect to a refund under section 8.7 is the period that ends six years after the date that a notice of entitlement relating to the refund is first sent under section 8.8.

60. Section 14 of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 24, section 16 and amended by 1999, chapter 9, section 124, is repealed and the following substituted:

Returns, payments and interest

14. Subsections 70 (2) and 104 (2), paragraphs 104 (23) (d) and (e), subsection 150 (4), sections 158, 159 and 160, subsections 160.1 (1) and (4), sections 160.2 and 160.3, subsections 161 (1), (2), (2.1), (2.2), (4), (4.01), (5), (6), (6.1), (6.2), (7), (9) and (11) and sections 221.1 and 221.2 of the Federal Act apply for the purposes of this Act.

61. Section 15 of the Act, as amended by the Statutes of Ontario, 1992, chapter 25, section 7, is repealed and the following substituted:

Daily interest

15. Interest computed under subsection 8.8 (2) of this Act or under any of subsections 160.1 (1), 161 (1), (2) and (11), 164 (3), (3.1), (3.2) and (4) and 227 (8.3) and (9.2) of the Federal Act, as they apply for the purposes of this Act, shall be compounded daily and, if interest is computed on an amount under any of those provisions and is unpaid on the day it would, but for this section, have ceased to be computed under that provision, interest at the rate provided by that provision shall be compounded daily on unpaid interest from that day to the day it is paid.

62. Subsection 19 (2) of the Act is, as amended by the Statutes of Ontario, 1999, chapter 9, section 125, is repealed and the following substituted:

False statements or omissions

(2) Every person who, knowingly or under circumstances amounting to gross negligence, makes, participates in, assents to or acquiesces in the making of a false statement or omission in a return, form, certificate, statement, application or answer, in this section referred to as a "return", that is filed or made in respect of a taxation year for the purposes of this Act or a regulation or a provision of the Federal Act or of the Federal Regulations as that provision applies for the purposes of this Act, is liable to a penalty of the greater of $100 and 50 per cent of the amount, if any, by which "A" exceeds "B" where, "

A"is the amount of tax for the year that would be payable under this Act after any refunds to which the individual is entitled for the year if this amount were calculated on the basis of correct and complete information, and "

B"is the tax for the year that would have been payable under this Act had the individual's tax payable for the year been assessed and his or her rebates and refunds of tax for the year, if any, been determined on the basis of the information provided for the year.

63. (1) Subsection 22.1 (1) of the Act, as re-enacted by the Statutes of Ontario, 2000, chapter 10, section 17, and subsection 22.1 (1.1) of the Act, as enacted by 2000, chapter 10, section 17, are repealed and the following substituted:

Objection, deemed overpayment

(1) An individual may object to a determination made under section 8.5 or 8.7 or subsection 10 (4) by serving on the Provincial Minister a notice of objection in a form approved by the Provincial Minister.

Time

(1.1) The notice of objection must be served not later than 90 days after the day on which the notice of entitlement in respect of the determination is sent.

(2) Subsection 22.1 (3) of the Act, as re-enacted by the Statutes of Ontario, 2000, chapter 10, section 17, is repealed and the following substituted:

Issues on objection

(3) In an objection under subsection (1), the individual may raise issues about the following matters only:

1.Whether the individual is entitled to a refund under section 8.7.

2.The residence of the individual, for an objection about an Ontario child care supplement for working families under section 8.5 or about a refund under section 8.7.

3.The calculation of the amount to which the individual is entitled under section 8.5 or 8.7 or the determination of amounts used in the calculation, but not the calculation of an amount determined under the Federal Act or determined by reference to an amount determined under the Federal Act.

64. (1) Clause 43 (a) of the Act, as re-enacted by the Statutes of Ontario, 1998, chapter 34, section 83, is amended by striking out "section 8.5 or 8.6" and substituting "section 8.5, 8.6 or 8.7".

(2) Subclause 43 (b) (iii) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 83, is repealed and the following substituted:

(iii)obtain for the benefit of the person or another person an amount under section 8.5 or 8.7 in excess of the amount to which the person or other person is entitled under that section.

(3) Clause 43 (f) of the Act, as re-enacted by the Statutes of Ontario, 1998, chapter 34, section 83, is amended by striking out "the deemed overpayment under section 8.5" and substituting "the refund under section 8.5 or 8.7".

65. Subsection 49 (5) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 84, is repealed and the following substituted:

Exception

(5) Subsections (3) and (4) do not apply in respect of the employment of powers, the exercise of discretion and the performance of duties under any section of this Act as it relates to the Ontario child care supplement for working families under section 8.5, a refund under section 8.7 or to proceedings in connection with it.

Commencement

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

Same

(2) Section 58 comes into force on a day to be named by proclamation of the Lieutenant Governor.

Same

(3) Section 49 and subsection 55 (3) come into force on January 1, 2001.

Same

(4) Sections 47, 48, 50, 51, 53 and 54, subsections 55 (1), (2) and (4) and sections 56 and 60 shall be deemed to have come into force on January 1, 2000.

part vi

land transfer tax act

67. The definition of "single family residence" in subsection 1 (1) of the Land Transfer Tax Act is repealed and the following substituted: "

single family residence" means a unit or proposed unit under the Condominium Act or a structure or part of a structure that is designed for occupation as the residence of a family, including dependants or domestic employees of a member of the family, whether or not rent is paid to occupy any part of it and whether or not the land on which it is situated is zoned for residential use and,

(a)includes such a residence that is to be constructed as part of the arrangement relating to a conveyance, and

(b)does not include such a residence that is constructed or is to be constructed on agricultural land that is eligible to be classified in the farmlands property class prescribed under the Assessment Act. ("habitation unifamiliale")

68. (1) Subsection 8 (2) of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 4 and 1997, chapter 43, Schedule F, section 6, is repealed and the following substituted:

Refund, residence on farmland

(2) The Minister may refund to a transferee the tax paid by him, her or it under this Act, as calculated under clause 2 (1) (b), on a conveyance of land on which a single family residence is located,

(a)if the residence ceases to be a single family residence under this Act because the land on which the residence is located is eligible to be classified in the farmlands property class prescribed under the Assessment Act\; and

(b)if the Minister receives evidence satisfactory to him or her that the land is eligible to be classified in that property class.

(2) Section 8 of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 4, 1996, chapter 18, section 11, 1997, chapter 10, section 15, 1997, chapter 19, section 12, 1997, chapter 43, Schedule F, section 6 and 1998, chapter 34, section 87, is further amended by adding the following subsection:

Time limit

(3) The Minister shall not make a refund under subsection (2) unless an application is made for the refund within four years after the conveyance is registered.

Commencement

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

Same

(2) Sections 67 and 68 shall be deemed to have come into force on January 1, 1998.

part vii

mining tax act

70. Subsection 1 (1) of the Mining Tax Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 6, is further amended by adding the following definition: "

remote mine" means a mine that is certified under section 4 as a remote mine. ("mine loigne")

71. (1) Subsection 3 (1) of the Act, as amended by the Statutes of Ontario, 2000, chapter 10, section 21, is repealed and the following substituted:

Mining tax

(1) Every operator is liable for and shall pay a tax for a taxation year equal to the amount calculated using the formula,

( A B ) + ( C 0.05 )

in which, "

A"is the amount calculated under subsection (1.1), "

B"is the tax rate for the taxation year as determined under subsection (3.1), and "

C"is the amount calculated under subsection (1.2).

Calculation of "A"

(1.1) The variable "A" in subsection (1) is the amount calculated using the formula,

D - ( E D/F )

in which, "

D"is the operator's profit, if any, for the taxation year as determined under subsection (5) from all mines in which the operator has an interest, less the amount of the operator's profit, if any, for the taxation year as determined in accordance with the prescribed rules from remote mines in which the operator has an interest, "

E"is the amount, if any, claimed as a deduction by the operator under subsection (2), and "

F"is the operator's profit, if any, for the taxation year as determined under subsection (5) from all mines in which the operator has an interest.

Calculation of "C"

(1.2) The variable "C" in subsection (1) is the amount calculated using the formula,

G - ( H G/J )

in which, "

G"is the operator's profit, if any, for the taxation year from remote mines in which the operator has an interest, as determined in accordance with the prescribed rules, "

H"is the amount, if any, claimed as a deduction by the operator under subsection (2), and "

J"is the operator's profit, if any, for the taxation year as determined under subsection (5) from all mines in which the operator has an interest.

(2) Subsection 3 (2) of the Act is repealed and the following substituted:

Deduction

(2) Every operator may claim as a deduction for a taxation year an amount equal to the lesser of,

(a)the proportion of $500,000 that the number of days in the taxation year is of 365; and

(b)the aggregate of amounts determined under section (3) for each mine in which the operator has an interest.

Deduction by associated corporations

(2.1) If two or more associated corporations are operators of one or more mines, the aggregate of the amounts deducted under subsection (2) by the corporations shall not exceed $500,000.

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

Exempt amount for remote mines

3.2 (1) In this section, "

exempt amount for remote mines" means, with respect to an operator, the amount determined under subsection (4) for a taxation year; ("montant exonr au titre des mines loignes") "

exemption limit" means, with respect to an operator's remote mine, the amount determined under subsection (6); ("limite d'exonration") "

exempt period" means, with respect to a remote mine, the exempt period described in subsection (5). ("priode d'exonration")

Application

(2) This section applies to an operator that has an interest in a remote mine that comes into existence after May 7, 1996.

Election by operator

(3) An operator may exclude from the operator's profit for a taxation year ending after May 7, 1996 from remote mines in which the operator has an interest an amount not exceeding the operator's exempt amount for remote mines.

Calculation of exempt amount

(4) The operator's exempt amount for remote mines for a taxation year is the total of all amounts, if any, each of which relates to a remote mine in which the operator has an interest and equals the lesser of,

(a)the operator's profit, if any, as determined in accordance with the prescribed rules from the remote mine for that portion of the exempt period that is during the taxation year; and

(b)the amount, if any, of the operator's exemption limit, if any, for the remote mine for the taxation year.

Exempt period

(5) The exempt period for a remote mine is 120 months less the number of calendar months that have passed in the exempt period for the mine under clause 3.1 (7) (b) and the exempt period begins with the month in which any operator of the mine first becomes entitled to receive proceeds from the output of the mine.

Exemption limit

(6) The operator's exemption limit for a remote mine for a taxation year is the following amount:

1.If there has been only one operator of the mine since it came into existence, the operator's exemption limit for the mine is the amount, if any, by which $10 million exceeds the total of all amounts, if any, excluded from profit by the operator for a previous taxation year under subsection (3) or 3.1 (1).

2.If there have been or are two or more operators of the mine, an operator's exemption limit for the mine is the amount, if any, by which $10 million exceeds the aggregate of,

i.all amounts, if any, each of which is an amount that was excluded from profit in respect of the mine by the operator for a previous taxation year under subsection (3) or 3.1 (1),

ii.all amounts, if any, each of which is the amount of an exemption limit allocated to another operator of the mine under subsection (7) or 3.1 (6), and

iii.all amounts, if any, each of which is an amount that has been excluded under subsection (3) or 3.1 (1) from profit by a person who is no longer an operator of the mine.

Exemption limit, more than one operator

(7) If, in a taxation year, more than one operator holds an interest in a remote mine, the operators shall, by agreement, allocate among themselves the exemption limit for the remote mine and each operator shall file a copy of the allocation agreement with its tax return for each taxation year in which the operator makes an exclusion under subsection (3).

Restriction on allocation of exemption limit

(8) The total of all operators' exemption limits for a remote mine as allocated under subsection (7) shall not exceed the amount by which $10 million exceeds the amounts, if any, that have been excluded under subsection (3) or 3.1 (1) from profit by a person who is no longer an operator of the mine.

Determination of profit, etc.

(9) For the purposes of this section, the operator's profit and the application of losses for a taxation year from a remote mine is to be determined in accordance with the prescribed rules.

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

Certification of a remote mine

4. (1) The Minister of Northern Development and Mines may certify a mine as a remote mine for the purposes of this Act,

(a)if the mine comes into existence after May 7, 1996;

(b)if there is a closure plan for the mine under Part VII of the Mining Act\; and

(c)if, in the opinion of the Minister of Northern Development and Mines, there is at least 30 kilometres between the pit's mouth of the mine and the nearest all-weather road or railway suitable to meet the transportation requirements of the mine.

When mine comes into existence

(2) For the purposes of clause (1) (a), a mine is considered to come into existence after May 7, 1996 in either of the following circumstances:

1.No operator of the mine is entitled to receive proceeds from the output of the mine before May 8, 1996. The mine is separate and distinct geologically from, and has no common workings with, any other mine that is operated at any time before the taxation year in which any operator of the mine first becomes entitled to receive proceeds from the output of the mine.

2.The mine reopens after May 7, 1996 after having been closed for a continuous period of at least 60 months.

Application for certification

(3) An operator who wishes to have a mine certified as a remote mine shall apply to the Minister of Northern Development and Mines for certification of the mine and shall include in the application,

(a)evidence, acceptable to the Minister of Northern Development and Mines, that the criteria set out in subsection (1) are met; and

(b)such other information as the Minister of Northern Development and Mines may require.

Time for applying

(4) An application for certification cannot be made before there is an initial closure plan for the mine under Part VII of the Mining Act.

Revocation of certification

(5) The Minister of Northern Development and Mines may revoke the certification of a mine under this section,

(a)if it is reasonable to believe that an incorrect statement was made in the application or information was omitted from the application for the purpose of obtaining the certification; or

(b)if either of the criteria set out in clauses (1) (a) and (b) is not met.

Effect of revocation

(6) If the certification of a mine is revoked, it shall be deemed never to have occurred.

Effect of mine closure

(7) If a mine certified under this section is closed for a continuous period of at least 60 months, the mine ceases to qualify as a remote mine.

Reopening of mine

(8) If a mine described in subsection (7) is reopened, it is considered to be a new mine upon the reopening and the operator may make a fresh application for certification of the mine under this section.

Definition

(9) In this section, "

pit's mouth", in respect of a mine, has the meaning prescribed by regulation.

Commencement

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

Same

(2) Section 73 shall be deemed to have come into force on November 30, 2000.

Same

(3) Sections 70, 71 and 72 shall be deemed to have come into force on May 7, 1996.

part viii

ministry of treasury

and economics act

75. Section 8 of the Ministry of Treasury and Economics Act is repealed and the following substituted:

Financial responsibility

8. The deputy minister of each ministry of the Government of Ontario and the chief executive officer of, or person holding a similar position in, each board, commission, authority, corporation and agency of the Government of Ontario is responsible for ensuring the proper conduct of the financial business of the relevant ministry, board, commission, authority, corporation and agency in accordance with such directives or guidelines as are made or issued under this Act.

Commencement

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

part ix

northern ontario heritage fund act

77. Subsection 3 (4) of the Northern Ontario Heritage Fund Act is amended by adding at the end "or in The District Municipality of Muskoka".

Commencement

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

part x

northern services boards act

79. Section 35 of the Northern Services Boards Act, as enacted by the Statutes of Ontario, 1998, chapter 16, section 10, is amended by adding at the end "and The District Municipality of Muskoka".

Commencement

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

part xi

ontario guaranteed

annual income act

81. (1) Section 1 of the Ontario Guaranteed Annual Income Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 168, is further amended by adding the following definition: "

allowance" means, unless the context indicates otherwise, an allowance authorized to be paid under Part III of the Old Age Security Act (Canada). ("allocation")

(2) The definition of "basic monthly income" in section 1 of the Act is repealed and the following substituted: "

basic monthly income" of a beneficiary for a month means,

(a)for any month in which the beneficiary is unmarried and is not in a common-law partnership, and for which the beneficiary is entitled to receive in the month a pension or a supplement, an amount equal to the sum of one-twelfth of his or her income for the base calendar year, plus the amount of any pension or supplement that the beneficiary is entitled to receive in the month,

(b)for any month throughout the whole of which the beneficiary is married to or is in a common-law partnership with a person who is entitled to receive in the month an increment and a pension or a supplement, and for which the beneficiary is entitled to receive a pension or a supplement, an amount equal to one-twenty-fourth of the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner, plus the amount of any pension or supplement that the beneficiary is entitled to receive in the month,

(c)for any month throughout the whole of which the beneficiary is married to or is in a common-law partnership with a person who is not entitled to receive in the month a pension or a supplement, and for which the beneficiary is entitled to receive a pension or a supplement, an amount equal to one-twenty-fourth of the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner, minus the lesser of,

(i)one-half of the amount of any pension that the beneficiary is entitled to receive in the month, or

(ii)an amount equal to one-twenty-fourth of the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner,

plus,

(iii)the amount of any pension or supplement that the beneficiary is entitled to receive in the month,

(d)for any month in which the beneficiary is unmarried and is not in a common-law partnership, and for which the beneficiary is not entitled to receive a pension or a supplement, an amount equal to one-twelfth of his or her income for the base calendar year,

(e)for any month throughout the whole of which the beneficiary is married to or is in a common-law partnership with a person who is entitled to receive in the month an increment, and for which neither the beneficiary nor his or her spouse or common-law partner is entitled to receive a pension or a supplement, an amount equal to one-twenty-fourth of the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner,

(f)for any month throughout the whole of which the beneficiary is married to or is in a common-law partnership with a person who is not entitled to receive in the month an increment, a pension or a supplement, and for which the beneficiary is not entitled to receive a pension or a supplement,

(i)where the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner is less than an amount equal to 12 times the maximum amounts of pension and supplement that are authorized to be paid in that month under the Old Age Security Act (Canada) to a person who is not married and is not in a common-law partnership,

an amount equal to one-twelfth of the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner, or

(ii)where the aggregate of the incomes for the calendar year of the beneficiary and his or her spouse or common-law partner is not less than an amount equal to 12 times the maximum amounts of pension and supplement that are authorized to be paid in that month under the Old Age Security Act (Canada) to a person who is not married and is not in a common-law partnership, and is less than an amount equal to the sum of,

(A)an amount equal to 24 times the amount of the pension that is authorized to be paid in the month under the Old Age Security Act (Canada),

(B)an amount equal to 12 times the maximum amount of supplement that is authorized to be paid in the month under the Old Age Security Act (Canada) to a person who is not married and is not in a common-law partnership, and

(C)$48,

an amount equal to the sum of the amount of the pension that is authorized to be paid in the month under the Old Age Security Act (Canada), plus the maximum amount of the supplement that is authorized to be paid in that month under the Old Age Security Act (Canada) to a person who is not married and is not in a common-law partnership, or

(iii)where the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner is equal to or greater than the sum of the amounts described in sub-subclauses (ii) (A), (B) and (C),

an amount equal to the sum of,

(A)the amount equal to one-thirty-sixth of the result obtained by subtracting from the amount of the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner the sum of the amounts described in sub-subclauses (ii) (A) and (B) and $12.00,

(B)the amount of the pension that is authorized to be paid in the month under the Old Age Security Act (Canada), and

(C)the maximum amount of the supplement that is authorized to be paid in the month under the Old Age Security Act (Canada) to a person who is not married and is not in a common-law partnership, or

(g)for any month throughout the whole of which the beneficiary is married to or is in a common-law partnership with a person who is entitled to receive an increment and a pension or supplement, and for which the beneficiary is not entitled to receive a pension or supplement, an amount equal to one-twelfth of the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner, plus the aggregate of,

(i)the amount of any increment, and

(ii)the amount of any pension or supplement,

that the spouse or common-law partner of the beneficiary is entitled to receive in the month. ("revenu mensuel de base")

(3) Section 1 of the Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 168, is further amended by adding the following definitions: "

common-law partner" has the meaning given to it by section 2 of the Old Age Security Act (Canada); ("conjoint de fait") "

common-law partnership" means the relationship between two persons who are common-law partners of each other. ("union de fait")

(4) The definition of "defined income" in section 1 of the Act is amended by striking out "a supplement, a pension, a spouse's allowance, a payment similar to a supplement, pension or spouse's allowance under a law of a province of Canada" and substituting "a supplement, a pension, an allowance, a payment similar to a supplement, pension or allowance under a law of a province of Canada".

(5) Clause (a) of the definition of "guaranteed income limit" in section 1 of the Act is amended by striking out "is married to a spouse who is not entitled to receive a spouse's allowance" and substituting "is married to, or is in a common-law partnership with, a person who is not entitled to receive an allowance".

(6) Clause (c) of the definition of "guaranteed income limit" in section 1 of the Act is amended by striking out "is married to a spouse who is entitled to receive a spouse's allowance" and substituting "is married to, or is in a common-law partnership with, a person who is entitled to receive an allowance".

(7) The definition of "month throughout the whole of which the beneficiary is married" in section 1 of the Act is repealed.

(8) The definitions of "spouse" and "spouse's allowance" in section 1 of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 168, are repealed.

(9) Section 1 of the Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 168, is further amended by adding the following subsections:

Interpretation, marriage

(2) A reference in this Act to a month throughout the whole of which the beneficiary is married to a person includes the month in which the beneficiary ceases to be married as a result of the death of his or her spouse or otherwise, and a reference to a month in which the beneficiary is unmarried does not include the month in which the beneficiary so ceases to be married.

Same, common-law partnership

(3) A reference in this Act to a month throughout the whole of which the beneficiary is in a common-law partnership with a person includes the month in which the beneficiary ceases to be in a common-law partnership as a result of the death of his or her common-law partner or otherwise, and a reference to a month in which the beneficiary is not in a common-law partnership does not include the month in which the beneficiary so ceases to be in a common-law partnership.

82. Clauses 2 (4) (b) and (c) of the Act are repealed and the following substituted:

(b)for every full $48 of the aggregate of the incomes for the base calendar year of the person and his or her spouse or common-law partner, if the person to whom the monthly benefit is paid is married to a spouse or is in a common-law partnership with a person who is entitled to receive in the month a monthly benefit or an increment under this Act; or

(c)for every full $48 of the amount by which the aggregate of the incomes for the base calendar year of the person and his or her spouse or common-law partner exceeds the product of 12 times the maximum amount of pension that is authorized to be paid in the month under the Old Age Security Act (Canada) to an unmarried person or a person who is not in a common-law partnership, if the person to whom the monthly benefit is paid is married to or in a common-law partnership with either a person who is not entitled to receive in the month an increment, a pension, a supplement or a monthly benefit, or a person who is entitled to receive in the month an allowance.

83. (1) Clause 6 (1.1) (b) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 171, is amended by striking out "spouse" and substituting "spouse or common-law partner".

(2) Subsection 6 (2) of the Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 171, is further amended by striking out "spouse" wherever it occurs and substituting in each case "spouse or common-law partner".

(3) Subsection 6 (3) of the Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 171, is further amended by striking out "spouse" wherever it occurs and substituting in each case "spouse or common-law partner".

(4) Subsection 6 (4) of the Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 171, is further amended by striking out "spouse" wherever it occurs and substituting in each case "spouse or common-law partner".

(5) Subsection 6 (5) of the Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 171, is further amended by striking out "spouse" wherever it occurs and substituting in each case "spouse or common-law partner".

(6) Subsection 6 (6) of the Act is amended by striking out "spouse" wherever it occurs and substituting in each case "spouse or common-law partner".

(7) Subsection 6 (7) of the Act is amended by striking out "spouse" wherever it occurs and substituting in each case "spouse or common-law partner".

84. Subsection 13 (1) of the Act is amended by striking out "spouse" and substituting "spouse or common-law partner".

Commencement

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

Same

(2) Sections 81, 82, 83 and 84 shall be deemed to have come into force on July 1, 2000.

part xii

ontario home ownership

savings plan act

86. (1) Subsection 1 (1) of the Ontario Home Ownership Savings Plan Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 123, is further amended by adding the following definitions: "

common-law partner", with respect to an individual at any time, means a person who cohabits at that time in a conjugal relationship with the individual if,

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

(b)the person and the individual are both parents of the same child; ("conjoint de fait") "

common-law partnership" means the relationship between two persons who are common-law partners of each other. ("union de fait")

(2) The definition of "tax credit" in subsection 1 (1) of the Act is amended by striking out "spouse or former spouse" and substituting "spouse or former spouse or common-law partner or former common-law partner".

(3) Subsections 1 (8), (9) and (10) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 17, section 123, are repealed and the following substituted:

Spouse or common-law partner

(8) If at any time a person is a spouse or a common-law partner of an individual, the person shall be deemed to be a spouse or common-law partner, as the case may be, of the individual at a later time unless, because of a breakdown of their conjugal relationship, the person and the individual were not cohabiting at the later time for a period of at least 90 days that includes the later time.

Same

(9) In this Act, words referring to the time at which a common-law partnership was entered into shall be interpreted as referring to the time at which the common-law partners who are the members of the partnership began cohabiting in a conjugal relationship or, in the case of persons described in clause (b) of the definition of "common-law partner" in subsection (1), the time at which they became parents of the same child.

87. (1) Paragraph 6 of section 2 of the Act is amended by striking out "the planholder's spouse, if the planholder is married" and substituting "the planholder's spouse or common-law partner, if the planholder is married or is in a common-law partnership".

(2) Paragraphs 9 and 10 of section 2 of the Act are repealed and the following substituted:

9.In the case of a plan entered into by the planholder and a depositary before January 1, 1989, no spouse or common-law partner of the planholder with whom the planholder resides, or from whom the planholder lives separate and apart for reasons other than the breakdown of the marriage or common-law partnership, has ever owned at any time an eligible home anywhere in the world.

10.In the case of a plan entered into by the planholder and a depositary after the December 31, 1988, no spouse or common-law partner of the planholder with whom the planholder resides, or from whom the planholder lives separate and apart for reasons other than the breakdown of the marriage or common-law partnership, has ever owned an eligible home anywhere in the world at any time during the marriage or common-law partnership.

(3) Paragraph 18 of section 2 of the Act is amended by striking out "the planholder's spouse" and substituting "the planholder's spouse or common-law partner".

88. (1) Clause 3 (3) (b) of the Act is repealed and the following substituted:

(b)the contribution is made at a time when the planholder or a spouse or common-law partner of the planholder with whom the planholder resides, or from whom the planholder lives separate and apart for reasons other than the breakdown of the marriage or common-law partnership, is the owner of an eligible home or is a partner in a partnership that owns property that would be an eligible home of the partner if the property was owned by the partner.

(2) Clause 3 (3) (d) of the Act is repealed and the following substituted:

(d)the spouse or common-law partner of the planholder with whom the planholder resides, or from whom the planholder lives separate and apart for reasons other than the breakdown of the marriage or common-law partnership, owns or owned at any time an eligible home unless,

(i)in the case of a contribution made to a plan before January 1, 1989, the contribution was made to the plan before the planholder married the spouse or entered into a common-law partnership with the common-law partner and either,

(A)the spouse or common-law partner owned no interest in an eligible home at the time the marriage or common-law partnership was entered into and the only interest in an eligible home the spouse or common-law partner may have acquired after the marriage or common-law partnership was entered into was an interest in an eligible home in respect of which the assets of the planholder's plan were released under section 5, or

(B)the marriage occurred or common-law partnership was entered into after the date on which the planholder acquired an interest in an eligible home in respect of which the assets of the planholder's plan were released under section 5, or

(ii)in the case of a contribution made to a plan after December 31, 1988, the spouse or common-law partner has not owned, at any time during the marriage to or common-law partnership with the planholder, an interest in an eligible home, other than an interest in an eligible home acquired during the marriage or common-law partnership in respect of which the assets of the planholder's plan were released under section 5; or

. . . . .

89. (1) Clause 5 (4) (c) of the Act is repealed and the following substituted:

(c)the eligible home is acquired as the principal residence of the planholder to be ordinarily inhabited by the planholder or by the planholder's spouse or common-law partner or an individual who was the planholder's spouse or common-law partner at the time of acquisition by the planholder of the eligible home, or by both of them, for a period of at least 30 consecutive days within two years of the first day of ownership by the planholder.

(2) Clauses 5 (6) (d) and (e) of the Act are repealed and the following substituted:

(d)the planholder or the spouse or common-law partner of the planholder with whom the planholder resides, or from whom the planholder lives separate and apart for reasons other than the breakdown of the marriage or common-law partnership, has acquired, after the planholder has entered into an Ontario home ownership savings plan, an ownership interest in an eligible home by gift from the owner of the interest or by reason of the death of the owner of the interest; or

(e) the planholder, after having entered into an Ontario home ownership savings plan, has married a person who had an ownership interest in an eligible home at the time of the marriage or has entered into a common-law partnership with a person who had an ownership interest in an eligible home at the time the common-law partnership was entered into.

90. (1) Subsection 7 (1) of the Act is amended by striking out "planholder's spouse if the spouse survives the planholder" at the end and substituting "planholder's spouse or common-law partner if the spouse or common-law partner survives the planholder".

(2) Clause 7 (2) (a) of the Act is amended by inserting "or common-law partner" after "spouse".

(3) Subsection 7 (3) of the Act is repealed and the following substituted:

No transfer

(3) No transfer may be made under subsection (2) unless,

(a)the spouse or common-law partner is alive at the time of the transfer to the spouse's or common-law partner's Ontario home ownership savings plan; and

(b)the spouse or common-law partner is eligible under this Act to be and is a planholder of an Ontario home ownership savings plan at the time of the transfer.

(4) Clauses 7 (4) (a) and (b) of the Act are amended by inserting "or common-law partner" after "spouse" wherever it occurs.

(5) Clause 7 (4) (d) of the Act is amended by striking out "spouse's plan" at the end and substituting "spouse's plan or common-law partner's plan".

91. (1) Clause 9 (1) (a) of the Act is amended by striking out "spouse or former spouse" and substituting "spouse or former spouse or common-law partner or former common-law partner".

(2) Subsection 9 (2) of the Act is repealed and the following substituted:

Exception

(2) No amount is payable under subsection (1) with respect to tax credits allowed to the planholder or to his or her spouse or former spouse or common-law partner or former common-law partner under the Income Tax Act in respect of qualifying contributions made by the planholder to his or her Ontario home ownership savings plan if the planholder has otherwise complied with this Act and the regulations but is terminating his or her plan for the reason that,

(a)the planholder or the spouse or common-law partner of the planholder with whom the planholder resides, or from whom the planholder lives separate and apart for reasons other than the breakdown of the marriage or common-law partnership, has acquired, after the planholder entered into the plan, an ownership interest in an eligible home by gift from the owner of the interest or by reason of the death of the owner of the interest; or

(b)the planholder, after having entered into an Ontario home ownership savings plan, has married a person who had an ownership interest in an eligible home at the time of the marriage or has entered into a common-law partnership with a person who had an ownership interest in an eligible home at the time the common-law partnership was entered into.

Commencement

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

part xiii

retail sales tax act

93. (1) Paragraph 2.2 of subsection 7 (1) of the Retail Sales Tax Act, as re-enacted by the Statutes of Ontario, 1998, chapter 5, section 45, is repealed and the following substituted:

2.2Toll free telephone services having an identity code that begins with 1-8 followed by two digits, except the telephone services that the Minister prescribes as ones that are excluded for the purposes of the exemption under this paragraph.

(2) Paragraph 44 of subsection 7 (1) of the Act is amended by striking out "a public library administered under the Public Libraries Act" and substituting "a public library established under the Public Libraries Act".

(3) Section 7 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, 1997, chapter 41, section 125, 1997, chapter 43, Schedule D, section 4, 1998, chapter 5, section 45, 1999, chapter 9, section 184 and 2000, chapter 10, section 28, is further amended by adding the following subsections:

Foreign states and diplomatic personnel

(5) The following persons and entities are exempt from tax under this Act:

1.A foreign state.

2.An international organization.

3.An individual who,

i.is not a Canadian citizen or permanent resident of Canada, as defined in the Immigration Act (Canada),

ii.is assigned to duty in Canada by the foreign state or international organization that the individual represents,

iii.is authorized by the Department of Foreign Affairs and International Trade of Canada,

iv.is not engaged locally, and

v.serves in, or is employed by, an international organization or the diplomatic mission or consular post of a foreign state.

4.A spouse, same-sex partner or family member of an individual described in paragraph 3, but only if the spouse, same-sex partner or family member is not a Canadian citizen or permanent resident of Canada, as defined in the Immigration Act (Canada), and is authorized by the Department of Foreign Affairs and International Trade of Canada.

5.A political subdivision of a foreign state, as prescribed by the Minister, and individuals, as prescribed by the Minister, employed by the government of such a political subdivision, but only on such conditions as the Minister prescribes for any of them.

6.A spouse, same-sex partner or family member of an individual described in paragraph 5, but only on such conditions as the Minister prescribes.

Exception

(5.1) Subsection (5) does not apply to exempt from tax an individual who, not being in the performance of his or her duties for the foreign state or international organization that he or she represents, purchases tangible personal property or a taxable service for the consumption or use of a person who is not entitled to an exemption under that subsection.

Definitions

(5.2) For the purposes of subsections (5) and (5.1), "

foreign state" means a foreign state that is officially recognized by Canada; ("tat tranger") "

international organization" means an international organization as defined in the Foreign Missions and International Organizations Act (Canada) but only to the extent specified in an order made under section 5 of that Act; ("organisation internationale") "

same-sex partner" means a same-sex partner as defined in section 29 of the Family Law Act\; ("partenaire de mme sexe") "

spouse" means a spouse as defined in section 29 of the Family Law Act. ("conjoint")

94. Subclauses 14 (1) (b) (i), (ii) and (iii) of the Act are repealed and the following substituted:

(i)5 per cent of the tax collected by the vendor in the period and shown in a return to be $400 or more,

(ii)$20 for each return with respect to the tax collected by the vendor in the period and shown to have been more than $20 and less than $400, and

(iii)the tax collected by the vendor in the period and shown in a return to be not more than $20.

95. Subsection 48 (3) of the Act, as amended by the Statutes of Ontario, 1993, chapter 12, section 14, 1994, chapter 13, section 25, 1996, chapter 18, section 18, 1997, chapter 10, section 34, 1997, chapter 19, section 22, 1997, chapter 43, Schedule D, section 14, 1998, chapter 5, section 47 and 1999, chapter 9, section 189, is further amended by adding the following clause:

(p)authorizing the refund to or among employers of tax paid by them in respect of payments not liable to tax that were made by them to multi-employer benefits plans and prescribing the conditions on which such refunds may be made.

Commencement

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

Same

(2) Subsection 93 (1) and section 94 shall be deemed to have come into force on July 1, 2000.

Same

(3) Subsection 93 (3) shall be deemed to have come into force on March 1, 2000.

part xiv

tobacco tax act

97. (1) The definition of "exporter" in section 1 of the Tobacco Tax Act is repealed and the following substituted: "

exporter" means, with reference to a particular date, a person who takes tobacco in bulk out of Ontario during the 12 consecutive months before that date, or causes it to be taken out of Ontario during that period, and who may be accountable for the tax on that tobacco to the jurisdiction receiving the tobacco. ("exportateur")

(2) The definition of "importer" in section 1 of the Act is repealed and the following substituted: "

importer" means, with reference to a particular date, a person who brings tobacco in bulk into Ontario during the 12 consecutive months before that date or causes it to be brought into Ontario during that period. ("importateur")

98. (1) Subsection 2 (1.1) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 10, section 42, is repealed.

(2) Section 2 of the Act, as amended by the Statutes of Ontario, 1996, chapter 18, section 19 and 1997, chapter 10, section 42, is further amended by adding the following subsections:

Tax for cigars

(1.5) Every consumer shall pay to Her Majesty in right of Ontario a tax on every cigar purchased by the consumer at the rate of 45 per cent of the taxable price of the cigar.

Fraction of a cent

(1.6) If an amount of tax calculated under subsection (1.5) is a fraction of a cent, the fraction shall be counted as a full cent.

Taxable price of cigar

(1.7) For the purposes of subsection (1.5), the taxable price of a cigar is the sum of the following amounts:

1.The price for which the cigar was purchased by its retail dealer, including the value in terms of Canadian money of any other consideration accepted by the wholesaler from whom the cigar passed as or on account of the price of the cigar.

2.The cost of, or charges for, customs and mailing, delivery or transportation, whether or not they are shown separately in the books of the wholesaler or on any invoice or in the computation of the price, or whether or not title has passed to the retail dealer before delivery to the retail dealer.

3.The amount of the tax imposed under the Excise Tax Act (Canada), other than the tax imposed by Part IX of that Act, or the duty imposed under the Excise Act (Canada) in respect of the cigar or in respect of the sale or acquisition of the cigar.

4.The amount determined by multiplying the prescribed percentage by the sum of the amounts described in paragraphs 1, 2 and 3.

Same

(1.8) Despite subsection (1.7), if the importer or manufacturer of a cigar is also the retail dealer of the cigar, the taxable price of the cigar is equal to the price that the consumer is deemed to have paid for the cigar as described in subsection (1.9).

Same

(1.9) For the purposes of subsection (1.8), the price that the consumer is deemed to have paid for the cigar is the sum of the following amounts:

1.The price for which the cigar was purchased by the consumer including the value in terms of Canadian money of any other consideration accepted as or on account of the price of the cigar by the retail dealer of the cigar.

2.The cost of, or charges for, customs and mailing, delivery or transportation, whether or not they are shown separately in the books of the retail dealer or on any invoice or in the computation of the price, or whether or not title has passed to the consumer before delivery to the consumer.

3.The amount of the tax imposed under the Excise Tax Act (Canada), other than the tax imposed by Part IX of that Act, or the duty imposed under the Excise Act (Canada) in respect of the cigar or in respect of the sale or acquisition of the cigar.

(3) Section 2 of the Act, as amended by the Statutes of Ontario, 1996, chapter 18, section 19 and 1997, chapter 10, section 42, is further amended by adding the following subsection:

Determination of taxable price of a cigar

(2.1) If the Minister considers that any of the amounts in a retail dealer's records for the matters described in paragraph 1 or 2 of subsection (1.7) or paragraph 1 or 2 of subsection (1.9) is artificially low or if the price referred to in paragraph 1 of subsection (1.7) or paragraph 1 of subsection (1.9) is below a reasonable wholesale market price, the Minister may determine the amount for the purpose of taxation under this Act and for the purpose of the applicable paragraph of subsection (1.7) or (1.9), unless it is established in an appeal under section 22 that the amount determined by the Minister is unreasonable.

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

Duty to provide invoice for cigars

2.1 (1) Every wholesaler shall inform the person to whom the wholesaler sells cigars of the quantity of cigars being sold and the tax collectable and payable on the cigars and shall deliver to the person, at the time of the purchase, an invoice containing the prescribed information.

Liability for tax

(2) Every person who purchases cigars from a wholesaler without obtaining an invoice containing the information required under subsection (1) remains liable for the tax collectable or tax payable under this Act in respect of the purchase until the tax is paid to the wholesaler or the Minister, as the case may be.

Same

(3) Subsection (2) applies whether or not the wholesaler is an agent of the Minister.

Duty of retail dealer

(4) Every retail dealer shall provide every consumer of cigars with an invoice specifying the tax payable and any other prescribed information or shall give the consumer that information by another reasonable means.

100. (1) Section 4 of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8 and 1998, chapter 5, section 49, is further amended by adding the following subsections:

Wholesalers of cigars

(1.3) The Minister may designate in writing a wholesaler who sells or delivers cigars to retail dealers to collect the tax imposed on the cigars under subsection 2 (1.5) and a person so designated shall be the agent of the Minister and shall collect and remit the tax to the Minister at the time or times and in the manner provided under this Act.

Conditions

(1.4) The Minister may impose any conditions and restrictions with respect to a designation under subsection (1.3) that the Minister considers appropriate.

(2) Subsection 4 (3) of the Act is repealed and the following substituted:

Sale to another collector

(3) Subsection (2) does not apply,

(a)to require a collector designated under subsection (1) to collect tax under this Act on the sale or delivery of tobacco by the collector to another collector designated under subsection (1) who is not a consumer in respect of the tobacco; or

(b)to require a collector designated under subsection (1) or (1.3) to collect tax under this Act on the sale or delivery of cigars by the collector to another collector designated under subsection (1.3) who is not a consumer in respect of the cigars.

(3) Subsection 4 (6) of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8, is repealed and the following substituted :

Collection of tax by registered importer

(6) Every registered importer shall collect, as agent for the Minister, the tax collectable or payable under this Act from every person to whom the importer sells or delivers tobacco in Ontario.

Duty to remit

(6.1) Every registered importer shall remit to the Minister the tax collected by the importer in accordance with subsection (6) as well as the tax, if any, in respect of which the importer is a consumer and shall do so at the times and in the manner required by this Act and the regulations.

101. (1) Subsection 5 (4) of the Act is repealed and the following substituted:

Sales to collector

(4) Subsection (3) does not apply to require a registered importer to collect tax under this Act,

(a)on the sale or delivery of tobacco by the registered importer to a collector appointed under subsection 4 (1) who is not a consumer in respect of the tobacco; or

(b)on the sale or delivery of cigars by the registered importer to a collector designated under subsection 4 (1) or (1.3) who is not a consumer in respect of the cigars.

(2) Section 5 of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8 and 1997, chapter 19, section 25, is further amended by adding the following subsection:

Penalty on unregistered importer

(11.1) Every person who operates as an importer in Ontario without holding a subsisting registration certificate required by this section shall pay a penalty, when assessed therefor, in an amount equal to the tax that would be payable under section 2 on all tobacco imported into Ontario by the person during the period when the person did not hold the subsisting registration certificate, calculated as if the tobacco had been sold to a consumer liable to pay tax in Ontario.

102. Subsection 11 (1) of the Act is amended by striking out "The Minister may refuse to designate a person under subsection 4 (1)" and substituting "The Minister may refuse to designate a person under subsection 4 (1) or (1.3)".

103. Clause 12 (2) (a) of the Act is repealed and the following substituted:

(a)every collector appointed under subsection 4 (1) in an amount equal to the average three months' tax collectable and payable by the collector calculated for the 12-month period preceding the date of the Minister's demand, or $1 million, whichever is the greater;

(a.1)every collector appointed under subsection 4 (1.3) in an amount equal to the average three months' tax collectable and payable by the collector calculated for the 12-month period preceding the date of the Minister's demand, or $10,000, whichever is the greater.

104. Subsection 13.1 (5) of the Act, as enacted by the Statutes of Ontario, 1992, chapter 28, section 1, is amended by striking out "retail selling price" and substituting "taxable price".

105. (1) The English version of subsection 14 (1) of the Act is amended by striking out "wholesale dealer" wherever it appears and substituting in each case "wholesaler".

(2) The English version of subsection 14 (2) of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8, is further amended by striking out "wholesale dealer" wherever it appears and substituting in each case "wholesaler".

106. Subsection 16 (3) of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8, is repealed and the following substituted:

Compensation to collectors, etc.

(3) For each 12-month period commencing on April 1, there may be paid to each person designated a collector under this Act and to each registered importer who is not also a person designated as a collector under this Act, as compensation for their services in collecting and remitting the tax imposed by this Act, the lesser of,

(a)$2,000; or

(b)the total of,

(i)4 per cent of the tax collected by the person in that period and shown in a return that is made in accordance with this Act and the regulations and in which the tax shown to have been collected is $75 or more,

(ii)$3 for each return with respect to tax collected by the person in that period that is made in accordance with this Act and the regulations and in which the tax shown to have been collected exceeds $3 but does not exceed $75, and

(iii)the tax collected by the person in that period and shown on a return that is made in accordance with this Act and the regulations and in which the tax shown to have been collected does not exceed $3.

Same

(3.1) A person to whom compensation may be paid under subsection (3) may deduct that compensation from the amount otherwise to be remitted to the Minister in accordance with this Act and the regulations.

107. Subsection 18 (3) of the Act is repealed and the following substituted:

Refund of tax claimed

(3) Despite subsection (1), a collector designated under subsection 4 (1) may retain the amount of a refund for which the collector has made application under this Act or the regulations until the refund for which the collector has applied is, in whole or in part, approved or refused by the Minister and until notice of the Minister's decision is sent to the collector.

108. Section 19 of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8, is further amended by adding the following subsections:

Limitation

(3.1) Subject to subsections (3.2) and (3.3), the Minister may assess or reassess any tax, interest or penalty payable under clause (1) (b) or tax payable as determined under subsection (3) within four years after the day on which the tax becomes payable.

Same

(3.2) If the Minister establishes that a person liable to pay the tax, interest or penalty under clause (1) (b) has made a misrepresentation that is attributable to neglect, carelessness or wilful default or has committed any fraud in making a return, in supplying information under this Act or in omitting to disclose information under this Act, the Minister may assess or reassess the tax, interest or penalty for which the person is liable at any time the Minister considers reasonable.

Same

(3.3) Subsections (3.1) and (3.2) do not apply in respect of a reconsideration under subsection 21 (3).

109. (1) Subsection 22 (5) of the Act is repealed and the following substituted:

Reply to notice of appeal

(5) The Minister shall, with all due dispatch, serve on the appellant and file with the court a reply to the notice of appeal admitting or denying the facts alleged and containing a statement of the allegations of fact and of the statutory provisions and reasons the Minister intends to rely on.

Same

(5.1) If the Minister does not serve the reply within 180 days after the notice under subsection (2) is served on him or her, the appellant may, upon 21 days notice to the Minister, apply to the court for an order requiring the reply to be served within such time as a judge shall order.

Same

(5.2) If the judge considers it proper in the circumstances, the judge may also order that, upon the failure of the Minister to serve the reply in the time specified by the order, the assessment or statement of disallowance with respect to which the appeal is made shall be vacated and any tax levied pursuant to the assessment shall be repaid to the appellant or the refund disallowed shall be paid to the appellant.

Same

(5.3) Nothing in this section revives an appeal that is void or affects a statement of disallowance or assessment that has become valid and binding.

(2) The English version of subsection 22 (10) of the Act is amended by striking out "notice of disallowance" and substituting "statement of disallowance".

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

Records to be kept

22.1 (1) Every collector, importer, exporter, interjurisdictional transporter, wholesaler, retail dealer or manufacturer shall keep at its principal place of business in Ontario records and books of account in the form and containing the information that will enable the accurate determination of the tax collectable and payable under this Act.

Same

(2) Every person referred to in subsection (1) shall maintain the records and books of account, as well as any other document necessary to verify the information in the records and books, for a period of seven years following the end of the person's fiscal year to which the records and books relate, unless written permission for their disposal is received from the Minister.

111. Subsection 23 (4) of the Act is repealed and the following substituted:

Demand to keep records

(4) Upon giving notice by registered letter or by demand served personally or by courier, the Minister may require any person who fails or refuses to keep adequate records and books of account to keep those records and books of account specified in the notice for the length of time required by the Minister.

112. (1) The English version of subsection 31 (1) of the Act is amended by striking out "wholesale dealer" and substituting "wholesaler".

(2) The English version of subsection 31 (2) of the Act, as re-enacted by the Statutes of Ontario, 1998, chapter 34, section 109, is amended by striking out "wholesale dealer" and substituting "wholesaler".

113. Paragraph 2 of subsection 35 (2) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 110, is amended by striking out "sold" at the end and substituting "purchased".

114. Section 38.1 of the Act, as enacted by the Statutes of Ontario, 1994, chapter 18, section 8, is repealed and the following substituted:

Refund to dealer where tax reduced

38.1 (1) Despite section 38, if a dealer who is not a collector designated under subsection 4 (1) has, as a result of a reduction in the tax payable by a consumer under section 2, remitted to the Minister an amount of money for a period that is greater than this Act requires the dealer to remit, the dealer shall apply to the dealer's collector for a refund of the amount overpaid, or to the Minister, if the Minister so requires.

Application by dealer

(2) If the application for a refund is made after the end of the month that is four months after subsection 2 (1.5) comes into force, it shall be made to the Minister and not to the dealer's collector.

Application by designated collector

(3) If the dealer referred to in subsection (1) is a collector designated under subsection 4 (1.3), the dealer shall apply to the Minister for any refund owing.

Limitation

(4) No refund shall be made unless the dealer makes an application for the refund under this section by the end of the month that is 12 months after subsection 2 (1.5) comes into force.

Same

(5) Upon proof satisfactory to the collector designated under subsection 4 (1) or (1.3) or satisfactory to the Minister that the amount was overpaid, the collector or the Minister may refund the overpayment to the dealer or, at the collector's or Minister's option, apply the amount of the overpayment to the liability of the dealer with respect to a previous or subsequent period.

Insufficient records

(6) For the purposes of a refund under subsection (1), if the dealer cannot substantiate the refund claim because of insufficient records, the Minister may estimate the amount of the refund in the manner the Minister considers expedient and refund the amount to the dealer.

Collector as agent

(7) A collector shall be deemed to act as the agent of the Minister in making a refund under subsection (1).

Recovery of refunds

(8) If a collector refunds an overpayment to a dealer or applies an overpayment to a liability of a dealer under subsection (5), the collector shall retain the amount refunded or applied from the amount for which the collector is liable to pay under this Act for the period, until the expiry of the period described in subsection (9).

Same

(9) The period referred to in subsection (8) begins on the day on which the collector's return is due under this Act for the month following the month that subsection 2 (1.5) comes into force and ends on the day on which the collector's return is due in the month that is five months after subsection 2 (1.5) comes into force.

Compensation to collectors

(10) If a collector refunds an overpayment to a dealer or applies the overpayment to a liability of the dealer under subsection (5), there may be paid to the collector in compensation for the collector's services the amount of $5 for each overpayment provided and the collector may deduct that compensation from the tax otherwise to be remitted to the Minister.

115. Clause 38.2 (3) (a) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 18, section 8, is repealed and the following substituted:

(a)an application for a refund is made to the Minister as part of the next return required to be filed by the collector following the day subsection 2 (1.5) comes into force.

116. Subsection 41 (2) of the Act, as amended by the Statutes of Ontario, 1997, chapter 19, section 25, is further amended by adding the following clauses:

(a)establishing one or more categories of cigars for the purposes of paragraph 4 of subsection 2 (1.7) and prescribing the percentage applicable to each category of cigar for the purposes of that paragraph;

(a.1)prescribing records to be kept and information to be included on invoices for the purposes of sections 2.1 and 22.1;

(a.2)prescribing alternative methods of calculating the taxable price per cigar on the sale of cigars to consumers if the wholesaler and the retail dealer of the cigars are not dealing at arm's length.

Commencement

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

Same

(2) Sections 98 and 99, subsections 100 (1) and (2), sections 101, 102, 103, 104, 107, 110, 111, 114, 115 and 116 come into force on a day to be named by proclamation of the Lieutenant Governor.

part xv

schedule, commencement

and short title

Enactment of Schedule

118. The Schedule to this Act is hereby enacted.

Commencement

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

Same

(2) Each Part of this Act comes into force as provided in the commencement section at the end of the Part.

Same

(3) The Schedule to this Act comes into force as provided in the commencement section at the end of the Schedule.

Same

(4) Where a Part or the Schedule provides that any provisions of it are to come into force on a day to be named by proclamation of the Lieutenant Governor, any such proclamation may apply to one or more of those provisions, and proclamations may be issued at different times with respect to any of those provisions.

Short title

120. The short title of this Act is the Balanced Budgets for Brighter Futures Act, 2000.

schedule

professional corporations

CONTENTS

Part I

Part II

Part III

Part IV

Part V

Part VI

Part VII

Part VIII

Part IX

Part X

Part XI

Part XII

Business Corporations Act

Certified General Accountants Association of Ontario Act, 1983

The Chartered Accountants Act, 1956

Drug and Pharmacies Regulation Act

Health Care Accessibility Act

Health Insurance Act

Law Society Act

Public Accountancy Act

Regulated Health Professions Act, 1991

Social Work and Social Service Work Act, 1998

Veterinarians Act

Commencement

Part I

Business Corporations Act

1. Subsection 3 (1) of the Business Corporations Act is repealed.

2. The Act is amended by adding the following sections:

Definitions

3.1 (1) In this section and in sections 3.2, 3.3 and 3.4, "

member" means a member of a profession governed by an Act that permits the profession to be practised through a professional corporation; ("membre") "

professional corporation" means a corporation incorporated or continued under this Act that holds a valid certificate of authorization or other authorizing document issued under an Act governing a profession. ("socit professionnelle")

Professions

(2) Where the practice of a profession is governed by an Act, a professional corporation may practise the profession if,

(a)that Act expressly permits the practice of the profession by a corporation and subject to the provisions of that Act; or

(b)the profession is governed by an Act named in Schedule 1 of the Regulated Health Professions Act, 1991, one of the following Acts or a prescribed Act:

1.Certified General Accountants Association of Ontario Act, 1983.

2.The Chartered Accountants Act, 1956.

3.Law Society Act.

4.Social Work and Social Service Work Act, 1998.

5.Veterinarians Act.

Regulations

(3) The Lieutenant Governor in Council may make regulations prescribing Acts for the purposes of clause (2) (b).

Application of Act

3.2 (1) This Act and the regulations apply with respect to a professional corporation except as otherwise set out in this section and sections 3.1, 3.3 and 3.4 and the regulations.

Conditions for professional corporations

(2) Despite any other provision of this Act, a professional corporation shall satisfy all of the following conditions:

1.All of the issued and outstanding shares of the corporation shall be legally and beneficially owned, directly or indirectly, by one or more members of the same profession.

2.All officers and directors of the corporation shall be shareholders of the corporation.

3.The name of the corporation shall include the words "Professional Corporation" or "Socit professionnelle" and shall comply with the rules respecting the names of professional corporations set out in the regulations and with the rules respecting names set out in the regulations or by-laws made under the Act governing the profession.

4.The corporation shall not have a number name.

5.The articles of incorporation of a professional corporation shall provide that the corporation may not carry on a business other than the practice of the profession but this paragraph shall not be construed to prevent the corporation from carrying on activities related to or ancillary to the practice of the profession, including the temporary investment of surplus funds earned by the corporation.

Corporate acts not invalid

(3) No act done by or on behalf of a professional corporation is invalid merely because it contravenes this Act.

Voting agreements void

(4) An agreement or proxy that vests in a person other than a shareholder of a professional corporation the right to vote the rights attached to a share of the corporation is void.

Unanimous shareholder agreements void

(5) A unanimous shareholder agreement in respect of a professional corporation is void unless each shareholder of the corporation is a member of the professional corporation.

Consequences of occurrence of certain events

3.3 (1) Despite any other Act, a professional corporation's certificate of authorization or other authorizing document remains valid and the corporation does not cease to exist despite,

(a)the death of a shareholder;

(b)the divorce of a shareholder;

(c)the bankruptcy or insolvency of the corporation;

(d)the suspension of the corporation's certificate of authorization or other authorizing document; or

(e)any other prescribed event.

Invalidity of certificate

(2) Subject to the regulations, a certificate of authorization or other authorizing document becomes invalid and the corporation ceases to exist on the revocation of the certificate.

Regulations

(3) For the purposes of subsection (1), the Lieutenant Governor in Council may make regulations,

(a)prescribing events;

(b)prescribing the manner in which shares of a shareholder are to be dealt with on the occurrence of any event mentioned in clauses (1) (a) to (e), the time within which they are to be dealt with and any other matter related to dealing with the shares.

No limit on professional liability

3.4 (1) Subsection 92 (1) shall not be construed as limiting the professional liability of a shareholder of a professional corporation under an Act governing the profession for acts of the shareholder or acts of employees or agents of the corporation.

Deemed acts

(2) For the purposes of professional liability, the acts of a professional corporation shall be deemed to be the acts of the shareholders, employees or agents of the corporation, as the case may be.

Professional liability

(3) The liability of a member for a professional liability claim is not affected by the fact that the member is practising the profession through a professional corporation.

Joint and several liability

(4) A person is jointly and severally liable with a professional corporation for all professional liability claims made against the corporation in respect of errors and omissions that were made or occurred while the person was a shareholder of the corporation.

PART ii

Certified General Accountants Association of Ontario Act, 1983

3. Section 1 of the Certified General Accountants Association of Ontario Act, 1983 is amended by adding the following clauses:

(c.1)"certificate of authorization" means a certificate of authorization issued under this Act authorizing the professional corporation named in it to practice as a certified general accountant;

(c.2)"professional corporation" means a corporation incorporated under the Business Corporations Act that holds a valid certificate of authorization under this Act.

4. Subsection 7 (1) of the Act is amended by inserting the following clause:

(c.1)regulating and governing the practice of certified general accountants through professional corporations, including, without limiting the generality of the foregoing, requiring the certification of those corporations, governing the issuance, renewal, suspension and revocation of certificates of authorization, governing the terms and conditions that may be imposed on certificates and governing the names of those corporations and the notification of a change in the shareholders of those corporations.

5. Subsection 8 (2) of the Act is amended by inserting "as well as the names of all professional corporations issued a certificate of authorization" after "in good standing".

6. The Act is amended by adding the following sections:

Professional corporations

9.1 Subject to the by-laws, a member of the Association or two or more members of the Association practising as individuals or as a partnership may establish a professional corporation for the purpose of practising as certified general accountants, and the provisions of the Business Corporations Act that apply to professional corporations within the meaning of that Act apply to such a corporation.

Notice of change of shareholder

9.2 A professional corporation shall notify the registrar within the time and in the form and manner determined under the by-laws of a change in the shareholders of the corporation.

Application of Act and by-laws

9.3 This Act and the by-laws apply to a member despite the fact that the practice of the member is carried on through a professional corporation.

Fiduciary and ethical obligations to clients

9.4 (1) The fiduciary and ethical obligations of a member to a person on whose behalf the member is practising as a certified general accountant,

(a)are not diminished by the fact that the member is practising through a professional corporation;

(b)apply equally to the corporation and to its directors, officers, shareholders, agents and employees.

Investigation

(2) If the conduct of a member practising on behalf of a professional corporation is the subject of an investigation or inquiry,

(a)any power that may be exercised under this Act in respect of the member may be exercised in respect of the corporation; and

(b)the corporation is jointly and severally liable with the member for all fines and costs the member is ordered to pay.

Restrictions apply to corporation's certificate

9.5 A term, condition, limitation or restriction imposed on the practice of a member practising as a certified general accountant through a professional corporation applies to the certificate of authorization of the corporation in relation to practice as a certified general accountant through the member.

pART iii

The Chartered Accountants Act, 1956

7. Section 1 of The Chartered Accountants Act, 1956 is amended by adding the following clauses:

(c)"professional corporation" means a corporation incorporated under the Business Corporations Act that holds a valid registration certificate under this Act;

(d)"registration certificate" means a certificate issued under this Act authorizing the professional corporation named in it to practise as a chartered accountant.

8. (1) If Bill 119 of the 1st Session, 37th Legislature (Red Tape Reduction Act, 2000) receives Royal Assent on or before the day this section comes into force, clause 3 (e) of the Act, as enacted by Bill 119, Schedule A, section 3, is amended by striking out "and firms" at the end and substituting "firms and professional corporations".

(2) If Bill 119 does not receive Royal Assent on or before the day this section comes into force, subsection (1) applies upon Bill 119 receiving Royal Assent.

(3) If Bill 119 of the 1st Session, 37th Legislature (Red Tape Reduction Act, 2000) receives Royal Assent on or before the day this section comes into force, clause 3 (f) of the Act, as enacted by Bill 119, Schedule A, section 3, is amended by adding "and professional corporations" at the end.

(4) If Bill 119 does not receive Royal Assent on or before the day this section comes into force, subsection (3) applies upon Bill 119 receiving Royal Assent.

(5) If Bill 119 of the 1st Session, 37th Legislature (Red Tape Reduction Act, 2000) receives Royal Assent on or before the day this section comes into force, clause 3 (g) of the Act, as enacted by Bill 119, Schedule A, section 3, is amended by striking out "and of firms" at the end and substituting "firms and professional corporations".

(6) If Bill 119 does not receive Royal Assent on or before the day this section comes into force, subsection (5) applies upon Bill 119 receiving Royal Assent.

9. (1) If Bill 119 of the 1st Session, 37th Legislature (Red Tape Reduction Act, 2000) receives Royal Assent on or before the day this section comes into force, subsection 8 (1) of the Act, as re-enacted by Bill 119, Schedule A, section 3, is amended by adding the following clause:

(m)to provide for and govern the practice of chartered accounting through professional corporations, including, without limiting the generality of the foregoing, requiring the certification of those corporations, governing the issuance, renewal, suspension and revocation of registration certificates, governing the terms and conditions that may be imposed on certificates and governing the names of those corporations and the notification of a change in the shareholders of those corporations.

(2) If Bill 119 does not receive Royal Assent on or before the day this section comes into force, subsection (1) applies upon Bill 119 receiving Royal Assent.

10. The Act is amended by adding the following sections:

Professional corporations

13.2 Subject to the by-laws, a member of the Institute or two or more members of the Institute practising as individuals or as a partnership may establish a professional corporation for the purpose of practising as a chartered accountant, and the provisions of the Business Corporations Act that apply to professional corporations within the meaning of that Act apply to such a corporation.

Notice of change of shareholder

13.3 A professional corporation shall notify the registrar within the time and in the form and manner determined under the by-laws of a change in the shareholders of the corporation.

Application of Act and by-laws

13.4 This Act and the by-laws of the Institute apply to a member despite the fact that the practice of the member is carried on through a professional corporation.

Fiduciary and ethical obligations to clients

13.5 (1) The fiduciary and ethical obligations of a member to a person on whose behalf the member is practising as a chartered accountant,

(a)are not diminished by the fact that the member is practising through a professional corporation;

(b)apply equally to the corporation and to its directors, officers, shareholders, agents and employees.

Investigation

(2) If the conduct of a member practising on behalf of a professional corporation is the subject of an investigation or inquiry,

(a)any power that may be exercised under this Act in respect of the member may be exercised in respect of the corporation; and

(b)the corporation is jointly and severally liable with the member for all fines and costs the member is ordered to pay.

Restrictions apply to corporation's certificate

13.6 A term, condition, limitation or restriction imposed on the practice of a member practising as a chartered accountant through a professional corporation applies to the registration certificate of the corporation in relation to the practice of chartered accounting through the member.

11. (1) If Bill 119 of the 1st Session, 37th Legislature (Red Tape Reduction Act, 2000) receives Royal Assent on or before the day this section comes into force, section 15 of the Act, as re-enacted by Bill 119, Schedule A, section 3, is repealed and the following substituted:

Register

15. The registrar of the Institute shall establish and maintain a register listing,

(a)firms as well as members and students of the Institute; and

(b)professional corporations that have been issued registration certificates under this Act.

(2) If Bill 119 does not receive Royal Assent on or before the day this section comes into force, subsection (1) applies upon Bill 119 receiving Royal Assent.

PART IV

Drug and Pharmacies

Regulation Act

12. Subsection 1 (1) of the Drug and Pharmacies Regulation Act, as amended by the Statutes of Ontario, 1991, chapter 18, section 47 and 1998, chapter 18, Schedule G, section 49, is further amended by adding the following definitions: "

certificate of authorization" has the same meaning as in the Regulated Health Professions Act, 1991\; ("certificat d'autorisation") "

health profession corporation" has the same meaning as in the Regulated Health Professions Act, 1991. ("socit professionnelle de la sant")

13. Subsection 142 (2) of the Act is repealed and the following substituted:

Same

(2) No corporation shall own or operate a pharmacy unless a majority of each class of shares of the corporation is owned by and registered in the name of pharmacists or in the name of health profession corporations each of which holds a valid certificate of authorization issued by the Ontario College of Pharmacists.

PART V

Health Care Accessibility Act

14. Subsection 2 (3) of the Health Care Accessibility Act, as enacted by the Statutes of Ontario, 1996, chapter 1, Schedule H, section 36, is repealed and the following substituted:

Hospitals

(3) A hospital shall not accept payment with respect to the provision of an insured service to an insured person unless permitted to do so by the regulations in the circumstances and on the conditions prescribed in the regulations.

Prescribed entities, etc.

(3.1) Such entities and persons or classes of persons as may be prescribed shall not accept payment with respect to the provision of an insured service to an insured person unless permitted to do so by the regulations in the circumstances and on the conditions prescribed in the regulations.

15. Section 8 of the Act, as amended by the Statutes of Ontario, 1996, chapter 1, Schedule H, section 38, is further amended by adding the following subsection:

Same

(1.1.1) An entity or person that contravenes subsection 2 (3.1) is guilty of an offence.

16. (1) Section 9 of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 1, Schedule H, section 39, is amended by adding the following clauses:

(c)prescribing circumstances and conditions for the purposes of subsection 2 (3);

(d)prescribing entities, persons, classes of persons, circumstances and conditions for the purposes of subsection 2 (3.1).

(2) Section 9 of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 1, Schedule H, section 39, is amended by adding the following subsection:

Retroactivity

(2) A regulation under subsection (1) is effective with respect to a period before it was filed if the regulation so provides.

PART VI

Health Insurance Act

17. (1) Subsection 15 (1) of the Health Insurance Act is amended by striking out "thereof directly to the physician".

(2) Subsection 15 (3) of the Act is repealed and the following substituted:

Requirements where Plan billed

(3) Where a physician submits his or her accounts directly to the Plan under this section,

(a)payment thereof shall be made,

(i)directly to the physician, or

(ii)as the physician directs in accordance with section 16.1;

(b)he or she shall not submit any account for any amount to the patient in respect of insured services or permit any account in respect of insured services to be submitted to the patient by any other person or entity from which the person receives a benefit; and

(c)the payment by the Plan for the insured services performed constitutes payment in full of the account therefor.

18. (1) Subsection 16 (1) of the Act is amended by striking out "thereof directly to the practitioner".

(2) Subsection 16 (3) of the Act is repealed and the following substituted:

Requirements where Plan billed

(3) Where a practitioner submits his or her accounts directly to the Plan under this section,

(a)payment thereof shall be made,

(i)directly to the practitioner, or

(ii)as the practitioner directs in accordance with section 16.1;

(b)he or she shall not submit any account for any amount to the patient in respect of insured services or permit any account in respect of insured services to be submitted to the patient by any other person or entity from which the person receives a benefit; and

(c)the payment by the Plan for the insured services performed constitutes payment in full of the account therefor.

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

Direction to make payments to entity

16.1 (1) A physician or a practitioner may direct that payments for services performed by the physician or practitioner and to which the physician or practitioner is lawfully entitled may be directed to such person or entity as may be prescribed and in such circumstances and on such conditions as may be prescribed, including such requirements and other matters with respect to directions as may be prescribed.

Condition

(2) A physician or a practitioner may not direct the General Manager to make payments to a person or entity if the physician or practitioner does not submit his or her accounts directly to the Plan.

Person or entity not entitled

(3) The entitlement to payment for services performed by a physician or a practitioner is that of the physician or practitioner and not that of the person or entity to which the physician or practitioner has directed that such a payment be made.

Repayment to Plan

(4) Where payment is made by the Plan to a person or entity pursuant to subsection (1), any money owing to the Plan by the physician or the practitioner may be recovered from the physician or practitioner personally.

Interpretation

(5) A reference in this Act or the regulations to a payment to a physician or a practitioner where the reference relates to a payment for services performed by the physician or practitioner shall be deemed to include a payment made to a person or entity pursuant to a direction made under this section.

Keeping and inspection of records

(6) Section 37.1 (record-keeping) applies with necessary modifications to a person or entity to whom payment is made pursuant to a direction and sections 40, 40.1 and 40.2 apply with necessary modifications to an inspection of the records to be kept.

PART VII

Law Society Act

20. Subsection 1 (1) of the Law Society Act, as amended by the Statutes of Ontario, 1991, chapter 41, section 1 and 1998, chapter 21, section 1, is further amended by adding the following definitions: "

certificate of authorization" means a certificate of authorization issued under this Act authorizing the professional corporation named in it to practise law; ("certificat d'autorisation") "

professional corporation" means a corporation incorporated under the Business Corporations Act that holds a valid certificate of authorization under this Act. ("socit professionnelle")

21. Section 27.1 of the Act, as enacted by the Statutes of Ontario, 1998, chapter 21, section 15, is amended by adding at the end "and of every name of a professional corporation registered under the by-laws and of every suspension or revocation of the corporation's certificate of authorization".

22. The Act is amended by adding the following sections:

Professional corporations

61.0.1 Subject to the by-laws, a member or two or more members practising law as individuals or as a partnership may establish a professional corporation for the purpose of practising law, and the provisions of the Business Corporations Act that apply to professional corporations within the meaning of that Act apply to such a corporation.

Register

61.0.2 (1) The Secretary shall establish and maintain a register of professional corporations that have been issued certificates of authorization.

Contents of registry

(2) The register shall contain the information set out in the by-laws.

Notice of change of shareholder

61.0.3 A professional corporation shall notify the Secretary within the time and in the form and manner determined under the by-laws of a change in the shareholders of the corporation.

Application of Act, etc.

61.0.4 (1) This Act, the regulations, the by-laws and the rules of practice and procedure apply to a member, student member and all other persons authorized to practise law despite the fact that the practice of the member, student member or other person is carried on through a professional corporation.

Exercise of powers of Society against corporation

(2) Subsections 34 (1) and (2), sections 36, 45, 46, 47, 48 and 49.2, subsection 49.3 (1) and sections 49.7 to 49.10, 49.44 to 49.52, 57 to 59 and 61 apply with necessary modifications to professional corporations as if a reference to a member in those provisions were a reference to a professional corporation, a reference to membership were a reference to a certificate of authorization, a reference to a revocation of membership were a reference to the revocation of a certificate of authorization and a reference to a restriction of manner of practice were a reference to the attachment of conditions to a certificate of authorization.

Fiduciary and ethical obligations to clients

61.0.5 (1) The fiduciary and ethical obligations of a member, student member and all other persons practising law to a person on whose behalf they are practising law,

(a)are not diminished by the fact that they are practising law through a professional corporation; and

(b)apply equally to the corporation and to its directors, officers, shareholders, agents and employees.

Investigation

(2) If the conduct of a member, student member and all other persons practising law on behalf of a professional corporation is the subject of an investigation or inquiry,

(a)any power that may be exercised under this Act in respect of the member, student member or other person may be exercised in respect of the corporation; and

(b)the corporation is jointly and severally liable with the member, student member or other person for all fines and costs that he or she is ordered to pay.

Restrictions apply to corporation's certificate

61.0.6 A term, condition, limitation or restriction imposed on the practice of a member practising law through a professional corporation applies to the corporation's certificate of authorization in relation to the practice of law through the member.

Prohibitions

61.0.7 No professional corporation shall,

(a)in the course of practising law do anything that, if done by a member, would be professional misconduct or conduct unbecoming a member;

(b)contravene any provision of this Act;

(c)practise law at any time when it is unable to satisfy the requirements for professional corporations under the Business Corporations Act and under this Act;

(d)contravene any condition attached to its certificate of authorization; or

(e)permit shares to be voted in contravention of subsection 3.2 (4) of the Business Corporations Act.

Trusteeships permitted

61.0.8 Clause 213 (2) (b) of the Loan and Trust Corporations Act does not prevent a professional corporation from acting as a trustee in respect of services normally provided by members.

References to barrister, etc.

61.0.9 A reference in any other Act or any regulation, rule or order made under any other Act to a barrister, solicitor or member shall be deemed to include a reference to a professional corporation.

23. (1) Paragraph 14 of subsection 62 (0.1) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 21, section 29, is amended by adding the following subparagraph:

iii.1professional corporations and applicants for certificates of authorization for professional corporations.

(2) Subsection 62 (0.1) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 21, section 29, is amended by adding the following paragraph:

28.1governing the practice of law through professional corporations, including, without limiting the generality of the foregoing, requiring the certification of those corporations, governing the issuance, renewal, suspension and revocation of certificates of authorization, governing the terms, conditions, limitations and restrictions that may be imposed on certificates and governing the names of those corporations and the notification of a change in the shareholders of those corporations.

PART VIII

Public Accountancy Act

24. (1) Section 1 of the Public Accountancy Act is amended by adding the following definition: "

professional corporation" means a corporation incorporated under the Business Corporations Act that holds a valid certificate of authorization under this Act. ("socit professionnelle")

(2) The definition of "public accountant" in section 1 of the Act is amended by inserting "or as a professional corporation" after "partnership".

25. Section 14 of the Act is amended by adding the following subsection:

Regulations

(4) The Council may make regulations,

(a)governing certificates of authorization to permit corporations to carry on practice as a public accountant in accordance with such conditions or restrictions as may be prescribed;

(b)prescribing the terms and conditions upon which any licensee in good standing may be permitted to incorporate and continue as its sole director and sole shareholder of a professional corporation as defined in the Business Corporations Act for the purpose of carrying on practice as a public accountant.

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

Application of Act and by-laws

14.1 This Act and the regulations apply to a person licensed under this Act despite the fact that the person practices as a public accountant through a professional corporation.

27. (1) Subsection 24 (1) of the Act is amended by inserting "or a professional corporation that does not hold a valid certificate of authorization under this Act" before "shall" at the end of the portion before clause (a).

(2) Clause 24 (1) (c) of the Act is amended by adding "or the corporation is authorized to carry on practice as a public accountant" at the end.

28. Subsection 25 (1) of the Act is amended by adding "Unless it is a professional corporation incorporated under subsection 14 (4)" at the beginning.

PART IX

Regulated Health

Professions Act, 1991

29. Subsection 1 (1) of the Regulated Health Professions Act, 1991, as amended by the Statutes of Ontario, 1998, chapter 18, Schedule G, section 1, is further amended by adding the following definitions: "

certificate of authorization" means a certificate of authorization issued under this Act or the Code; ("certificat d'autorisation") "

health profession corporation" means a corporation incorporated under the Business Corporations Act that holds a valid certificate of authorization issued under this Act or the Code. ("socit professionnelle de la sant")

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

Holding out as a health profession corporation

34.1 (1) No corporation shall hold itself out as a health profession corporation unless it holds a valid certificate of authorization.

Same

(2) No person shall hold himself or herself out as a shareholder, officer, director, agent or employee of a health profession corporation unless the corporation holds a valid certificate of authorization.

31. Section 37 of the Act is amended by adding the following subsection:

Onus of proof to show certificate of authorization

(2) A person who is charged with an offence to which holding a certificate of authorization under a health profession Act would be a defence shall be deemed, in the absence of evidence to the contrary, to have not been issued a certificate of authorization.

32. (1) Subsection 40 (2) of the Act is amended by inserting "or 34.1 (2)" after "subsection 34 (2)".

(2) Subsection 40 (3) of the Act is amended by inserting "or 34.1 (2)" after "subsection 34 (1)".

33. Subsection 43 (1) of the Act is amended by adding the following clauses:

(e)respecting health profession corporations;

(f)governing the issue, renewal, suspension, revocation and expiration of certificates of authorization;

(g)governing the names of health profession corporations.

34. Subsection 1 (1) of Schedule 2 to the Act, as amended by the Statutes of Ontario, 1998, chapter 18, Schedule G, section 10, is further amended by adding the following definitions: "

certificate of authorization" means a certificate of authorization issued under the Regulated Health Professions Act, 1991 or this Code; ("certificat d'autorisation") "

health profession corporation" means a corporation incorporated under the Business Corporations Act that holds a valid certificate issued under the Regulated Health Professions Act, 1991 or this Code. ("socit professionnelle de la sant")

35. (1) Subsection 23 (2) of Schedule 2 to the Act, as amended by the Statutes of Ontario, 1993, chapter 37, section 7 and 1998, chapter 18, Schedule G, section 13, is further amended by adding the following clauses:

(d.1)the name, business address and business telephone number of every health profession corporation;

(d.2)the name of every shareholder of a health profession corporation.

(2) Paragraph 1 of subsection 23 (3) of Schedule 2 to the Act is repealed and the following substituted:

1.Information described in clauses (2) (a), (b), (c), (d.1) and (d.2).

36. Subsection 85.5 (1) of Schedule 2 to the Act, as enacted by the Statutes of Ontario, 1993, chapter 37, section 23, is amended by inserting "a health profession corporation" after "partnership".

37. Schedule 2 to the Act, as amended by the Statutes of Ontario, 1993, chapter 37, sections 4 to 37 and 1998, chapter 18, Schedule G, sections 11 to 23, is further amended by adding the following sections:

Health Profession Corporations

Professional corporations

85.8 Subject to the regulations made under subsection 43 (1) of the Regulated Health Professions Act, 1991 and the by-laws, a member or two or more members may establish a health profession corporation for the purpose of practising a health profession, and the provisions of the Business Corporations Act that apply to professional corporations within the meaning of that Act apply to such a corporation.

Notice of change of shareholder

85.9 A health profession corporation shall notify the Registrar within the time and in the form and manner determined under the by-laws of a change in the shareholders of the corporation.

Application of Act, etc.

85.10 This Act, the regulations and the by-laws apply to a member despite the fact that the member practises a health profession through a health profession corporation.

Fiduciary and ethical obligations to patients

85.11 (1) The fiduciary and ethical obligations of a member to a person on whose behalf the member is practising a health profession,

(a)are not diminished by the fact that the member is practising through a health profession corporation; and

(b)apply equally to the corporation and to its directors, officers, shareholders, agents and employees.

Investigation

(2) If the conduct of a member practising on behalf of a health profession corporation is the subject of a complaint, a specified allegation of professional misconduct, an investigation by the Board, an investigator or assessor appointed under this Code, an inquiry of a board of inquiry or the Registrar,

(a)any power that the College may exercise in respect of the member may be exercised in respect of the corporation; and

(b)the corporation is jointly and severally liable with the member for all fines and costs the member is ordered to pay.

Duty to patient prevails

85.12 If there is a conflict between a member's duty to a patient and the member's duty to a health profession corporation as a director or officer of the corporation, the duty to the patient prevails.

Restrictions apply to corporation's certificate

85.13 A term, condition or limitation imposed on the certificate of registration of a member practising a health profession through a health profession corporation applies to the certificate of authorization of the corporation in relation to the practice of the health profession through the member.

38. Section 87 of Schedule 2 to the Act, as amended by the Statutes of Ontario, 1998, chapter 18, Schedule G, section 20, is further amended by inserting "(t.1)" after "(t)".

39. Subsection 92 (1) of Schedule 2 to the Act is amended by inserting "or a certificate of authorization" after "registration".

40. Subsection 94 (1) of Schedule 2 to the Act, as amended by the Statutes of Ontario, 1998, chapter 18, Schedule G, section 22, is further amended by adding the following clauses:

(t.1)prescribing the form and manner in which a health profession corporation shall notify the Registrar of a change in the shareholders of the corporation and the time period for doing so;

(t.2)requiring the payment of fees upon application for a certificate of authorization and for the issue or renewal of a certificate of authorization and specifying the amount of such fees.

PART X

Social Work and

Social Service Work Act, 1998

41. Section 1 of the Social Work and Social Service Work Act, 1998 is amended by adding the following definitions: "

certificate of authorization" means a certificate of authorization issued under this Act authorizing the corporation named in it to practise social work or social service work; ("certificat d'autorisation") "

professional corporation" means a corporation incorporated under the Business Corporations Act that holds a valid certificate of authorization issued under this Act. ("socit professionnelle")

42. Subsection 22 (2) of the Act is amended by adding the following clauses:

(c.1)the name of every professional corporation issued a certificate of authorization under this Act;

(c.2)a notation of every revocation or suspension of a certificate of authorization.

43. The Act is amended by adding the following sections:

Professional corporations

23.1 Subject to the by-laws, a member or two or more members practising social work or social service work as individuals or as a partnership may establish a professional corporation for the purpose of practising social work or social service work, and the provisions of the Business Corporations Act that apply to professional corporations within the meaning of that Act apply to such a corporation.

Notice of change of shareholder

23.2 A professional corporation shall notify the Registrar within the time and in the form and manner determined under the by-laws of a change in the shareholders of the corporation.

Application of Act, etc.

23.3 This Act, the regulations and the by-laws apply to a member despite the fact that the member practises social work or social service work through a professional corporation.

Fiduciary and ethical obligations to clients

23.4 (1) The fiduciary and ethical obligations of a member to a person on whose behalf the member is practising social work or social service work,

(a)are not diminished by the fact that the member is practising through a professional corporation; and

(b)apply equally to the corporation and to its directors, officers, shareholders, agents and employees.

Investigation

(2) If the conduct of a member practising on behalf of a professional corporation is the subject of an investigation or a hearing,

(a)any power that may be exercised in respect of the member may be exercised in respect of the corporation; and

(b)the corporation is jointly and severally liable with the member for all fines and costs the member is ordered to pay.

Restrictions apply to corporation's certificate

23.5 A term, condition or limitation imposed on the certificate of registration of a member practising social work or social service work through a corporation applies to the certificate of authorization of the corporation in relation to the practice of social work or social service work through the member.

44. Subsection 37 (1) of the Act is amended by adding the following paragraph:

17.1governing the practice of social work and social service work through professional corporations, including, without limiting the generality of the foregoing, requiring the certification of those corporations, governing the issuance, renewal, suspension and revocation of certificates of authorization, governing the terms, conditions or limitations that may be imposed on certificates and governing the names of those corporations and the notification of a change in the shareholders of those corporations.

PART XI

Veterinarians Act

45. Subsection 1 (1) of the Veterinarians Act, as amended by the Statutes of Ontario, 1998, chapter 18, Schedule G, section 73, is further amended by adding the following definitions: "

certificate of authorization" means a certificate of authorization issued under this Act authorizing the professional corporation named in it to engage in the practice of veterinary medicine; ("certificat d'autorisation") "

professional corporation" means a corporation incorporated under the Business Corporations Act that holds a valid certificate of authorization issued under this Act. ("socit professionnelle")

46. The Act is amended by adding the following sections:

Professional corporations

5.1 Subject to the by-laws, a member or two or more members practising veterinary medicine as individuals or as a partnership may establish a professional corporation for the purpose of practising veterinary medicine, and the provisions of the Business Corporations Act that apply to professional corporations within the meaning of that Act apply to such a corporation.

Registry

5.2 (1) The Registrar shall establish and maintain a register of professional corporations that have been issued certificates of authorization.

Contents of registry

(2) The Register shall contain the information required under the by-laws.

Notice of change of shareholder

5.3 A professional corporation shall notify the Registrar within the time and in the form and manner determined under the by-laws of a change in the shareholders of the corporation.

Application of Act, etc.

5.4 This Act, the regulations and the by-laws apply to a member despite the fact that the member practises veterinary medicine through a professional corporation.

Fiduciary and ethical obligations to clients

5.5 (1) The fiduciary and ethical obligations of a member to a person on whose behalf the member is practising veterinary medicine,

(a)are not diminished by the fact that the member is practising veterinary medicine through a professional corporation; and

(b)apply equally to the corporation and to its directors, officers, shareholders, agents and employees.

Investigation

(2) If the conduct of a member practising on behalf of a professional corporation is the subject of an investigation or inquiry,

(a)any power that may be exercised in respect of the member may be exercised in respect of the corporation; and

(b)the corporation is jointly and severally liable with the member for all fines and costs the member is ordered to pay.

Restrictions apply to corporation's certificate

5.6 A condition or limitation imposed on the licence of a member practising veterinary medicine through a professional corporation applies to the corporation's certificate of authorization in relation to the practice of veterinary medicine through the member.

47. Subsection 9 (1) of the Act is amended by adding the following paragraph:

16.1governing the practice of veterinary medicine through professional corporations, including, without limiting the generality of the foregoing, requiring the certification of those corporations, governing the issuance, renewal, suspension and revocation of certificates of authorization, governing the conditions and limitations that may be imposed on certificates and governing the names of those corporations and the notification of a change in the shareholders of those corporations.

pART XII

Commencement

Commencement

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

[37] Bill 152 Original (PDF)

Bill 152

Bill 1522000

An Act to implement the

2000 Budget to establish a

made-in-Ontario tax system

and to amend various Acts

contents

Part I

Part II

Part III

Part IV

Part V

Part VI

Part VII

Part VIII

Part IX

Part X

Part XI

Part XII

Part XIII

Part XIV

Part XV

Schedule

Community Small Business Investment Funds Act

Corporations Tax Act

Electricity Act, 1998

Employer Health Tax Act

Income Tax Act

Land Transfer Tax Act

Mining Tax Act

Ministry of Treasury and Economics Act

Northern Ontario Heritage Fund Act

Northern Services Boards Act

Ontario Guaranteed Annual Income Act

Ontario Home Ownership Savings Plan Act

Retail Sales Tax Act

Tobacco Tax Act

Schedule, Commencement and Short Title

Professional Corporations

______________

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

Part I

community small business

investment funds act

1. (1) Subsection 1 (1) of the Community Small Business Investment Funds Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 76, 1997, chapter 43, Schedule C, sections 2 and 23, 1998, chapter 34, section 12 and 1999, chapter 9, section 50, is further amended by adding the following definitions: "

qualifying trust" has the same meaning as in subsection 127.4 (1) of the Income Tax Act (Canada); ("fiducie admissible") "

research oriented investment fund" means, with respect to a calendar year, a labour sponsored investment fund corporation that meets the requirements set out in subsection 16.1 (2). ("fonds d'investissement ax sur la recherche")

(2) Subsection 1 (1) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 76, 1997, chapter 43, Schedule C, sections 2 and 23, 1998, chapter 34, section 12 and 1999, chapter 9, section 50, is further amended by adding the following definition: "

common-law partner" has the meaning given to it in subsection 248 (1) of the Income Tax Act (Canada). ("conjoint de fait")

2. (1) Sub-subclause 6 (1) (e) (i) (C) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 80, is further amended by inserting "or common-law partner" after "spouse".

(2) Subclause 6 (1) (e) (iii) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 80, is further amended by inserting "or common-law partner" after "spouse" in the portion before sub-subclause (A).

(3) Sub-subclause 6 (1) (e) (iii) (A) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 80, is further amended by inserting "or common-law partner" after "spouse".

(4) Sub-subclause 6 (1) (e) (iii) (C.1) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 17, section 80, is amended by inserting "or common-law partner" after "spouse".

3. (1) The definition of "eligible investor" in subsection 12 (1) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 17, section 82, is repealed and the following substituted: "

eligible investor" means, in respect of a particular Class A share of a corporation registered under this Part,

(a)an individual who subscribes for the share, but not an individual who is a trust,

(b)an individual who is an annuitant (as defined in subsection 146 (1) of the Income Tax Act (Canada)) of a qualifying trust that subscribes for the share, or

(c)a spouse of an individual described in clause (b). ("investisseur admissible")

(2) Clause (c) of the definition of "eligible investor" in subsection 12 (1) of the Act, as enacted by subsection (2), is repealed and the following substituted:

(c)a spouse or common-law partner of an individual described in clause (b).

(3) Subsection 12 (1) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 82, 1997, chapter 43, Schedule C, section 5 and 1999, chapter 9, section 52, is further amended by adding the following definitions: "

eligible investment in a research business" means, with respect to a particular labour sponsored investment fund corporation, an investment described in subsection (3); ("investissement admissible dans une entreprise de recherche") "

scientific research and experimental development expenses" means, with respect to expenses incurred by an entity in a fiscal year, the total of all expenses incurred by the entity in the year that are described in subparagraph 37 (1) (a) (i), (i.1) or (ii) or 37 (1) (b) (i) or (ii) of the Income Tax Act (Canada). ("dpenses affrentes aux activits de recherche scientifique et de dveloppement exprimental")

(4) Section 12 of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 82, 1997, chapter 43, Schedule C, section 5 and 1999, chapter 9, section 52, is further amended by adding the following subsections:

Eligible investment in

a research business

(3) For the purposes of this Part, an eligible investment in a research business by a labour sponsored investment corporation for a particular calendar year is an investment by the corporation in an entity that is a taxable Canadian corporation or a Canadian partnership and with respect to which the circumstances described in one or more of the following paragraphs exist:

1.At least 50 per cent, or such other percentage as may be prescribed, of the total expenses incurred by the entity during the entity's most recent fiscal year ending before the day on which the investment was made and for which financial statements are available are scientific research and experimental development expenses.

2.If the entity was established in the calendar year or in the previous calendar year, or if it first began business in one of those calendar years,

i.the entity undertakes to incur scientific research and experimental development expenses in the fiscal year in which the investment is made, or in the following fiscal year, in an amount equal to at least 50 per cent, or such other percentage as may be prescribed, of its total expenses for the year, and

ii.the labour sponsored investment fund corporation accepts the undertaking.

3.The entity fulfilled an undertaking given in a previous year under paragraph 2.

4.The entity was formed to exploit intellectual property developed by a Canadian institution that is a university, college, research institute, hospital or other prescribed research institution and,

i.at least 10 per cent of the voting equity capital of the entity or 10 per cent of the value of all partnership interests in the entity, as the case may be, are held by a Canadian institution that is a university, college, research institute, hospital or other prescribed research institution, and

ii.the amount of the scientific research and experimental development expenses incurred by the entity in the entity's fiscal year in which the labour sponsored investment fund corporation makes its investment is equal to at least 50 per cent or such other percentage as may be prescribed of the amount invested by the corporation in the entity in the fiscal year.

Date of Class A share redemption

(4) For the purpose of sections 14 and 14.1, when determining the date on which a Class A share of a labour sponsored investment fund corporation that was issued in February or March is redeemed, a redemption that occurs in February or on March 1 shall be deemed to occur on March 31.

Capital available for investment

(5) For the purposes of this Part, a labour sponsored investment fund corporation's capital available for investment at a particular time is the amount, if any, by which "A" exceeds "B" where, "

A"is the total cost of all investments and property held by the corporation at that time, each of which was an eligible investment as defined in section 18 or in subsection 204.8 (1) of the Income Tax Act (Canada) at the time the investment was made or is property maintained in a reserve as defined in subsection 19 (2), and "

B"is 20 per cent of the net value of the corporation's total assets at that time.

4. (1) Sub-subclause 14 (1) (e) (i) (C) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 84, is further amended by inserting "or common-law partner" after "spouse".

(2) Subclause 14 (1) (e) (iii) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 84, is further amended by inserting "or common-law partner" after "spouse" in the portion before sub-subclause (A).

(3) Sub-subclause 14 (1) (e) (iii) (A) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 17, section 84, is amended by inserting "or common-law partner" after "spouse".

(4) Sub-subclause 14 (1) (e) (iii) (B.2) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 17, section 84, is amended by inserting "or common-law partner" after "spouse".

5. (1) Subclause 14.1 (1) (a) (iv) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 7, is amended by inserting "or common-law partner" after "spouse" in the portion before sub-subclause (A).

(2) Clause 14.1 (1) (c) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 7, is amended by inserting "or common-law partner" after "spouse" in the portion before subclause (i).

(3) Sub-subclause 14.1 (1) (c) (ii) (A) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 7, is amended by inserting "or common-law partner" after "spouse".

(4) Sub-subclause 14.1 (1) (c) (ii) (E) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 7, is amended by inserting "or common-law partner" after "spouse".

(5) Section 14.1 of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 7, is amended by inserting the following subsections:

Alternative version of amendment

(1.1) A labour sponsored investment fund corporation may amend its articles to provide that if, in a year, the corporation issues Class A shares as a research oriented investment fund and if tax credit certificates are issued under this Act in respect of those shares, the corporation may redeem such a share only if all of the following circumstances exist:

1.The holder of the share makes a written request to the corporation to redeem the share.

2.The holder of the share meets such other conditions as may be prescribed.

3.The redemption either occurs more than eight years after the date on which the share was issued or it occurs earlier than that in circumstances other than those described in subclause (1) (a) (ii), (iii) or (iv) and,

i.the holder of the share receives an amount on the redemption that does not exceed the amount that would otherwise have been payable on the redemption less 20 per cent, or such other percentage as may be prescribed, of the lesser of,

A.the value of the consideration received by the corporation on the issuance of the share, or

B.the amount that would otherwise have been payable on the redemption of the share, and

ii.the corporation remits to the Minister an amount equal to the amount required under subparagraph i to be deducted from the amount otherwise payable on redemption of the share.

Same

(1.2) The provision described in subsection (1.1) is to be included in the articles of incorporation instead of the provisions described in clause 14 (1) (e) and in addition to the provisions described in subsection (1).

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

Research oriented investment fund

16.1 (1) A labour sponsored investment fund corporation that intends to issue shares as a research oriented investment fund in a calendar year after 2000 shall give notice of its intention to the Minister in a form approved by the Minister and shall do so by the end of the preceding year.

Status of corporation

(2) A labour sponsored investment fund corporation that has given the notice required by subsection (1) for a calendar year is a research oriented investment fund during that year,

(a)if the articles of the corporation contain the provision described in subsection 14.1 (1.1) or are deemed under subsection (4) to do so;

(b)if the corporation complied with the investment requirements and restrictions set out in sections 17 and 18.1 in the preceding year;

(c)if the corporation conducted its business and affairs in accordance with this Act in the preceding year; and

(d)if the aggregate cost of the corporation's investments, each of which is an eligible investment in a research business that was held at the end of the preceding year, is equal to at least 50 per cent, or such other percentage as may be prescribed, of its capital available for investment at the end of that year or if, instead, the corporation gives the undertaking described in subsection (5).

Penalty for unauthorized issuance

(3) If a labour sponsored investment fund corporation issues a Class A share as a research oriented investment fund during a calendar year but did not meet the requirements set out in subsection (2) when it did so, the corporation shall pay a penalty to the Minister equal to 10 per cent of the value of the consideration received on its issuance.

Deemed compliance, articles of incorporation

(4) For the purposes of clause (2) (a), the articles of the labour sponsored investment fund corporation shall be deemed to contain the provision described in subsection 14.1 (1.1) if the corporation gives a written undertaking to the Minister that it will pay a penalty to the Minister equal to 5 per cent of the value of the consideration received on the issuance of a Class A share that was issued when the corporation was a research oriented investment fund but only if the share is redeemed within eight years after the date on which it is issued other than in the circumstances described in subclauses 14.1 (1) (a) (ii), (iii) or (iv).

Undertaking re investments

(5) For the purposes of clause (2) (d), a labour sponsored investment fund corporation that has not made any investments may give the Minister a written undertaking that, before the end of the calendar year referred to in subsection (2), it will make one or more investments, each of which is an eligible investment in a research business and that the cost of those investments will equal at least 50 per cent, or such other percentage as may be prescribed, of the capital available for investment by the corporation at the end of that year.

Failure to comply with undertaking

(6) If a labour sponsored investment fund corporation fails to comply with its undertaking given under subsection (5), the corporation shall pay a penalty to the Minister equal to 10 per cent of the value of the consideration received on its issuance, during the applicable year, of Class A shares as a research oriented investment fund.

7. (1) Subsection 25 (3) of the Act, as amended by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 23, is repealed and the following substituted:

Part III corporation

(3) A labour sponsored investment fund corporation shall apply to the Minister on behalf of each eligible investor who has subscribed for a Class A share of the corporation during the calendar year or within 60 days after the end of the calendar year for a tax credit certificate in respect of an investment corporation tax credit to be claimed by an eligible investor in respect of that share under the Income Tax Act.

(2) Paragraph 6 of subsection 25 (4) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 21, is repealed and the following substituted:

6.The amount of the tax credit deductible in determining the amount of tax payable under the Income Tax Act for the 1998, 1999 or 2000 taxation year is the lesser of,

i.$750, and

ii.an amount equal to 15 per cent of the equity capital received by the corporation from the eligible investor, or from a qualifying trust for the eligible investor, after the end of the preceding taxation year and before the day that is 61 days after the end of the taxation year for Class A shares issued by the corporation, excluding any portion of the equity capital that was taken into consideration in determining the amount of a tax credit for the preceding year.

7.If the corporation is a research oriented investment fund during the calendar year in which it issues the Class A shares referred to in subsection (3), the amount of the tax credit deductible in determining the amount of tax payable under the Income Tax Act for any taxation year after 2000 is the lesser of,

i.$1,000, and

ii.an amount equal to 20 per cent of the equity capital received by the corporation from the eligible investor, or from a qualifying trust for the eligible investor, for Class A shares issued by the corporation that are purchased after the end of the preceding taxation year and before the day that is 61 days after the end of the taxation year, excluding any portion of the equity capital that was taken into consideration in determining the amount of a tax credit for the preceding year.

8.If the corporation is not a research oriented investment fund during the calendar year in which it issues the Class A shares referred to in subsection (3), the amount of the tax credit deductible in determining the amount of tax payable under the Income Tax Act for any taxation year after 2000 is the lesser of,

i.$750, and

ii.an amount equal to 15 per cent of the equity capital received by the corporation from the eligible investor, or from a qualifying trust for the eligible investor, for Class A shares issued by the corporation that are purchased after the end of the preceding taxation year and before the day that is 61 days after the end of the taxation year, excluding any portion of the equity capital that was taken into consideration in determining the amount of a tax credit for the preceding year.

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

Research investment incentive

25.0.1 (1) An eligible investor may apply for a research investment incentive if the investor, or a qualifying trust for the eligible investor, purchases Class A shares issued by a research oriented investment fund after 2000 and before March 2, 2001.

Application by eligible investor

(2) An application for a research investment incentive shall be made to the Minister and shall be in a form approved by the Minister.

Same, by corporation

(3) The Minister may authorize a labour sponsored investment fund corporation to apply on behalf of its shareholders for research investment incentives and may impose conditions with respect to the authorization.

Payment of incentive

(4) Subject to subsection (5), the Minister shall pay the research investment incentive to the eligible investor in an amount that is the lesser of,

(a)$250, and

(b)5 per cent of the amount paid by the eligible investor, or by the qualifying trust for the eligible investor, after 2000 and before March 2, 2001 to the labour sponsored investment fund corporation on the issue of the Class A shares.

Exception

(5) The Minister shall not pay the research investment incentive to the eligible investor if the Minister considers that the labour sponsored investment fund corporation that issued the Class A shares, or its directors, officers or shareholders, are conducting the business and affairs of the corporation in a manner that is contrary to the spirit and intent of this Act, whether or not this Act or the regulations have been contravened.

Commencement

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

Same

(2) Subsection 1 (2), section 2, subsection 3 (2), section 4 and subsections 5 (1), (2), (3) and (4) come into force on January 1, 2001.

Part II

corporations tax act

10. The definition of "member of his or her family" in subsection 1 (2) of the Corporations Tax Act is repealed and the following substituted: "

member of his or her family" means, with respect to an individual referred to in the definition of "family farm corporation" or "family fishing corporation" or in subclause 61 (5) (c) (i),

(a)his or her spouse or common-law partner,

(b)his or her child,

(c)his or her father, mother, grandfather or grandmother,

(d)his or her brother or sister or any lawful descendant of his or her brother or sister,

(e)the brother or sister of his or her father or mother or any lawful descendant of that uncle or aunt,

(f)the father or mother of his or her spouse or common-law partner,

(g)a brother or sister of his or her spouse or common-law partner or any lawful descendant of that brother or sister,

(h)the spouse or common-law partner of his or her child, or

(i)a person adopted by him or her under the Child and Family Services Act or a predecessor of that Act or the spouse, common-law partner or any lawful descendant of that person. ("membre de sa famille")

11. (1) Clause (a) of the definition of "Ontario allocation factor" in subsection 12 (1) of the Act, as amended by the Statutes of Ontario, 1998, chapter 5, section 7, 1998, chapter 34, section 29 and 1999, chapter 9, section 76, is further amended by striking out "any of sections 13, 13.1, 13.2, 13.3 and 13.4" in the amendment of 1999 and substituting "any of sections 13 to 13.5".

(2) Clause (b) of the definition of "Ontario allocation factor" in subsection 12 (1) of the Act, as amended by the Statutes of Ontario, 1998, chapter 5, section 7, 1998, chapter 34, section 29 and 1999, chapter 9, section 76, is further amended by striking out "any of sections 13, 13.1, 13.2, 13.3 and 13.4" in the amendment of 1999 and substituting "any of sections 13 to 13.5".

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

Educational technology tax incentive

13.5 (1) In this section, "

eligible course" means a course of study offered by an eligible educational institution that provides credit towards a post-secondary degree, diploma, certificate or an apprentice training program approved by the Director of Apprenticeships under the Apprenticeship and Certification Act, 1998 or the Trades Qualification and Apprenticeship Act\; ("cours admissible") "

eligible educational institution" means,

(a)a university or college of applied arts and technology in Ontario, whose enrolment is counted for the purposes of calculating its entitlement to annual operating grants from the Government of Ontario,

(b)the Michener Institute of Applied Health Sciences, or

(c)the Ontario College of Art and Design; ("tablissement d'enseignement autoris") "

eligible equipment" means the equipment described in subsection (14) and excludes the things described in subsection (15); ("matriel admissible") "

eligible learning technology" means,

(a)custom or pre-packaged computer programs for use primarily in delivering an eligible course to students or instructors,

(b)custom computer programs for use primarily in providing digital library services to students or instructors, or

(c)instructional aids consisting of collections of images, sounds or animated pictures that are archived and shared through the Internet and can be accessed and used in eligible courses; ("technologie d'apprentissage admissible") "

notional price" means, in respect of eligible equipment that is donated or sold or eligible learning technology that is donated, sold or licensed in a taxation year to an eligible educational institution,

(a)the lowest amount that the corporation would normally have charged in the year on a sale or licensing of the equipment or technology to a person dealing at arm's length with the corporation, if the corporation carries on a business of selling eligible equipment or selling or licensing eligible learning technology in the taxation year, or

(b)the cost to the corporation of the equipment or technology, in any other case; ("prix thorique") "

Ontario allocation factor" of a corporation for a taxation year has the meaning assigned by subsection 12 (1); ("coefficient de rpartition de l'Ontario") "

systems software" means a combination of computer programs and associated procedures, related technical documentation and data that,

(a)performs compilation, assembly, mapping, management or processing of other programs,

(b)facilitates the functioning of a computer system by other programs,

(c)provides service or utility functions such as media conversion, sorting, merging, system accounting, performance measurement, system diagnostics or programming aids,

(d)provides general support functions such as data management, report generation or security control, or

(e)provides general capability to meet widespread categories of problem solving or processing requirements where the specific attributes of the work to be performed are introduced mainly in the form of parameters. ("logiciel de systmes")

Incentive

(2) In computing its income from a business for a taxation year, a corporation may deduct an educational technology tax incentive in respect of eligible equipment that is donated or sold or eligible learning technology that is donated, sold or licensed to an eligible educational institution during the taxation year and after May 2, 2000.

Amount of incentive

(3) The amount of a corporation's educational technology tax incentive for a taxation year is the total of all amounts each of which is calculated, in respect of eligible equipment that is donated or sold or eligible learning technology that is donated, sold or licensed to an eligible educational institution in the taxation year, using the formula,

[ (A - B) ÷ C ] 0.15

in which, "

A"is the corporation's notional price for the equipment or technology, "

B"is the fair market value of the consideration, if any, paid or payable by the institution for the equipment or technology, and "

C"is the corporation's Ontario allocation factor for the taxation year.

Corporate partner

(4) A corporation that is a member of a partnership at the end of the corporation's taxation year may deduct the amount described in paragraph 3 in computing its income from a business for the taxation year in the circumstances described in paragraphs 1 and 2:

1.In a fiscal period of the partnership that ends in the taxation year of the corporation, the partnership donates or sells eligible equipment or donates, sells or licenses eligible learning technology to an eligible educational institution.

2.If the donation or sale had been made or the licence had been given by a corporation, the corporation would be entitled to claim a deduction under this section.

3.The amount deductible by the corporation is the amount that may reasonably be considered to be the corporation's share of the amount that the partnership would be entitled to deduct in respect of the donation, sale or licence, if the partnership were a corporation and if the partnership used the corporation's Ontario allocation factor for the taxation year.

Limited partner

(5) Despite subsection (4), no amount may be deducted under this section by a corporation with respect to a sale or donation of eligible equipment or a sale, donation or licence of eligible learning technology by a partnership in which the corporation is a limited partner.

Certificate

(6) An eligible educational institution shall issue a certificate to a corporation or partnership that donates or sells eligible equipment or that donates, sells or licenses eligible learning technology to it, stating that the equipment or technology is eligible equipment or eligible learning technology for the purposes of this section.

Same

(7) The certificate must be issued in a form and be given to the corporation or partnership in a manner approved by the Minister.

Status of certificate

(8) Unless otherwise directed by the Minister, the certificate forms part of the records and books of account required to be kept under section 94 by the corporation or partnership making the donation or sale or giving the licence.

Same

(9) A corporation is not entitled to claim a deduction under this section in respect of a donation, sale or licence unless the corporation retains a copy of the certificate in its records.

Minister's direction and order

(10) If an eligible educational institution issues one or more incorrect certificates,

(a)the Minister may direct the institution to cease issuing certificates under this section; and

(b)the Minister may order that all or some of the equipment that is donated or sold to the institution or all or some of the technology that is donated, sold or licensed to the institution is not eligible equipment or eligible learning technology for the purposes of this section.

Revocation

(11) The Minister may revoke a direction or order, or both, made under subsection (10) if the Minister is satisfied that the eligible educational institution will comply with the Minister's directions with respect to the accuracy, form and content of certificates given under this section.

Conditions

(12) The Minister may impose such conditions on the revocation of the direction and order under subsection (11) as he or she considers reasonable.

Effect of revocation

(13) Upon the revocation of a direction and order, the equipment or technology that would have otherwise been eligible equipment or eligible learning technology is, to the extent approved by the Minister, eligible equipment or eligible learning technology for the purposes of this section and may be certified as such by the educational institution.

Eligible equipment

(14) The following types of equipment are eligible equipment for the purposes of the educational technology tax incentive:

1.Computer, electronic and telecommunications equipment that has never been used before, including any systems software essential to the operation of the equipment, and that is to be used primarily to enhance and expand delivery of an eligible course by enabling better communication between instructors and students or between students, either inside or outside the classroom.

2.Instructional equipment or tools that have never been used before, including any specialized supplies and systems software essential to the operation of the equipment or tools, and that are to be used primarily for the delivery of an eligible course.

Exclusions from eligible equipment

(15) The following things are not eligible equipment for the purposes of the educational technology tax incentive:

1.Office or classroom furniture.

2.Fixtures, wiring or components that are part of a building or structure.

3.Fibre optic cable.

4.A personal or laptop computer that a student will own after completing the eligible course.

5.Maintenance equipment.

6.Books.

13. Sub-subclause 14 (5) (e) (i) (E) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 79, is repealed and the following substituted:

(E)under section 13.4 in respect of the corporation's share of the capital costs incurred by the partnership in the fiscal period,

(F)under section 13.5 in respect of the corporation's share of the amount described in subsection 13.5 (4), as determined under that subsection, and

. . . . .

14. (1) Clause 35 (1) (a) of the Act, as amended by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 16, 1998, chapter 34, section 37 and 1999, chapter 9, section 80, is further amended by striking out "13.3 and 13.4" in the amendment of 1999 and substituting "13.3, 13.4 and 13.5".

(2) Subsection 35 (2) of the Act, as amended by the Statutes of Ontario, 1998, chapter 5, section 9, 1998, chapter 34, section 37 and 1999, chapter 9, section 80, is further amended by striking out "13.3 and 13.4" in the amendment of 1999 and substituting "13.3, 13.4 and 13.5".

(3) Subsection 35 (3) of the Act, as amended by the Statutes of Ontario, 1998, chapter 5, section 9, 1998, chapter 34, section 37 and 1999, chapter 9, section 80, is further amended by striking out "13.3 and 13.4" wherever it appears and substituting in each case "13.3, 13.4 and 13.5".

15. Section 43 of the Act, as amended by the Statutes of Ontario, 1992, chapter 3, section 10, 1994, chapter 14, section 16, 1998, chapter 5, section 12 and 2000, chapter 10, section 6, is further amended by adding the following subsection:

Transition, electricity corporation

(1.1) Despite subsection (1), for a corporation that generates electrical energy for sale or produces steam for use in the generation of electrical energy for sale, the amount that may be deducted by the corporation for a taxation year ending after December 31, 1998 on its eligible Canadian profits from the generation of electrical energy for sale or the production of steam for use in the generation of electrical energy for sale is the amount that would be determined under subsection (1) if the reference in that subsection to "2 per cent" were read as the total of,

(a)0.5 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;

(b)1 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 1999 and before January 1, 2001 to the total number of days in the taxation year;

(c)1.5 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2000 and before January 1, 2002 to the total number of days in the taxation year; and

(d)2.0 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2001 to the total number of days in the taxation year.

16. (1) Subsection 43.5 (4.1) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 5, section 13, is amended by striking out "and" at the end of clause (a), by inserting "and" at the end of clause (b) and by adding the following clause:

(c)if the production is a regional Ontario production, 10 per cent of the amount by which "A" exceeds "B" where, "

A"is that portion of the company's qualifying labour expenditure for the taxation year for the production that is related to expenditures that are incurred after May 2, 2000 and included in the Ontario labour expenditure for the taxation year in respect of the production, and "

B"is that portion of the company's qualifying labour expenditure for the previous taxation year for the production that is related to expenditures that are incurred after May 2, 2000 and included in the Ontario labour expenditure for the previous taxation year in respect of the production.

(2) Subsection 43.5 (5) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 19, is repealed and the following substituted:

Exception, first-time production

(5) Subject to subsection (5.1), if the total amount of the qualifying labour expenditures for a first-time production is $50,000 or less, the total amount of all eligible credits in respect of the production is the lesser of the total amount of the qualifying labour expenditures for the production and $15,000.

Same, regional Ontario production

(5.1) If the total amount of the qualifying labour expenditures for a first-time production that is a regional Ontario production is $50,000 or less, the total amount of all eligible credits in respect of the production for a taxation year ending after May 2, 2000 is the lesser of,

(a)the total amount of the qualifying labour expenditures for the production; and

(b)the amount calculated under subsection (5.2).

Same

(5.2) The amount referred to in clause (5.1) (b) is the amount calculated using the formula,

[ $20,000 ( A / B ) ] + [ $15,000 ( C / B ) ]

in which, "

A"is that portion of the company's expenditures, if any, incurred in the taxation year and after May 2, 2000 that are included in the amount of the company's Ontario labour expenditure for the taxation year in respect of the production, "

B"is the company's total Ontario labour expenditure for the taxation year, and "

C"is that portion of the company's expenditures, if any, incurred in the taxation year and before May 3, 2000 that are included in the amount of the company's Ontario labour expenditure for the taxation year in respect of the production.

(3) Subsection 43.5 (6.1) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 5, section 13, is repealed and the following substituted:

Same, productions commenced after October 31, 1997

(6.1) Subject to subsection (6.1.1), the eligible credit of a qualifying production company for a taxation year in respect of an eligible Ontario production that is not a first-time production and for which principal photography commences after October 31, 1997 is 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.

Same, regional Ontario production

(6.1.1) The eligible credit of a qualifying production company for a taxation year that ends after May 2, 2000 in respect of an eligible Ontario production that is a regional Ontario production and that is not a first-time production is the sum of "A" and "B" where, "

A"is 30 per cent of the amount by which the company's qualifying labour expenditure for the taxation year for the production exceeds its qualifying labour expenditure, if any, for the previous taxation year, as determined in relation to expenditures that are incurred after May 2, 2000 and included in the Ontario labour expenditure for the taxation year in respect of the production, and "

B"is 20 per cent of the amount by which the company's qualifying labour expenditure for the taxation year for the production exceeds its qualifying labour expenditure, if any, for the previous taxation year, as determined in relation to expenditures that are incurred before May 3, 2000 and included in the Ontario labour expenditure for the taxation year in respect of the production.

(4) Subsection 43.5 (6.2) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 5, section 13, is amended by striking out "subsections (4) to (6.1)" and substituting "subsections (4) to (6.1.1)".

(5) Subsection 43.5 (19) 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 adding the following definitions: "

film studio" means a building in which sets are used for the purposes of making film or television productions and sound, light and human access are controlled; ("studio") "

Greater Toronto Area" means the geographic area composed of the City of Toronto and the regional municipalities of Durham, Halton, Peel and York; ("Grand Toronto") "

location day" means, in respect of an eligible Ontario production, a day on which principal photography for the production is done in Ontario outside a film studio; ("jour de tournage en extrieur") "

regional Ontario production" means an eligible Ontario production,

(a)for which the principal photography in Ontario is done entirely outside the Greater Toronto Area, or

(b)for which the principal photography in Ontario is done in whole or in part outside a film studio, but only if,

(i)the number of Toronto location days for the production does not exceed 15 per cent of the total number of location days in respect of the production, and

(ii)the number of location days for the production is at least five or, in the case of a production that is a television series, is at least equal to the number of episodes in the production; ("production rgionale ontarienne") "

Toronto location day" means, in respect of an eligible Ontario production, a day on which principal photography for the production is done outside a film studio and within the Greater Toronto Area. ("jour de tournage en extrieur Toronto")

17. (1) Subsection 43.7 (3) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21 and amended by 1998, chapter 5, section 15, is repealed and the following substituted:

Amount of tax credit

(3) The amount of a corporation's Ontario book publishing tax credit for a taxation year is the sum of all amounts each of which is the amount of the available credit for the taxation year in respect of the publication of an eligible literary work, as determined using the formula,

A + B

in which, "

A"is the amount that is the lesser of,

(a)30 per cent of the qualifying expenditures made by the corporation after May 6, 1997 and before May 3, 2000 in respect of the publication of the literary work, to the extent that the expenditures were not included in determining the available credit relating to the publication of the literary work that was included in an Ontario book publishing tax credit claimed by the corporation for a prior taxation year, and

(b)$10,000 less the total of all amounts, if any, each of which is the available credit relating to the publication of the same literary work that was included in an Ontario book publishing tax credit claimed by the corporation for a prior taxation year; and "

B"is the amount that is the lesser of,

(a)30 per cent of the qualifying expenditures made by the corporation after May 2, 2000 and before the end of the taxation year in respect of the publication of the literary work, to the extent that the expenditures were not included in determining the available credit relating to the publication of the literary work that was included in an Ontario book publishing tax credit claimed by the corporation for a prior taxation year, and

(b)$30,000 less the sum of the amount of "A" for the taxation year in respect of the eligible literary work and the total of all amounts, if any, each of which is the available credit relating to the publication of that literary work that was included in an Ontario book publishing tax credit claimed by the corporation for a prior taxation year.

(2) Subsection 43.7 (4) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is repealed and the following substituted:

Same, book containing more than one literary work

(4) A book that contains more than one literary work shall be deemed to be one literary work for the purposes of subsection (3), and the amount of a corporation's Ontario book publishing tax credit for a taxation year in respect of the book shall not exceed the amount determined under subsection (3).

(3) Paragraph 1 of subsection 43.7 (12) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is repealed and the following substituted:

1.The literary work is written by an eligible Canadian author or, if it is written by more than one author, all or substantially all of the work is the work of eligible Canadian authors.

(4) The French version of paragraph 2 of subsection 43.7 (12) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is amended by striking out "autoris" and substituting "admissible".

(5) Clause 43.7 (13) (j) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is amended by striking out "first-time Canadian authors" and substituting "eligible Canadian authors".

(6) Subparagraph 1 i of subsection 43.7 (14) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is repealed and the following substituted:

i.non-refundable monetary advances to the eligible Canadian author of the literary work, and

. . . . .

(7) Subparagraph 3 i of subsection 43.7 (14) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is amended by striking out "first-time Canadian author" and substituting "eligible Canadian author".

(8) Section 43.7 of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21 and amended by 1998, chapter 5, section 15, is further amended by adding the following subsection:

Exception, second and subsequent literary works

(14.1) An expenditure incurred before May 3, 2000 is not a qualifying expenditure of an Ontario book publishing company unless the expenditure relates to the first literary work published by an eligible Canadian author in an eligible category of writing.

(9) Subsection 43.7 (16) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is amended by adding the following definition: "

eligible Canadian author" means, with respect to a literary work, an individual,

(a)who, when he or she and an Ontario book publishing company enter into a contract to publish the literary work, is ordinarily resident in Canada and is a Canadian citizen or is a permanent resident within the meaning of the Immigration Act (Canada), and

(b)who has not written more than two literary works of the same eligible category of writing that have been previously published, other than a literary work published in an anthology containing two or more literary works by different authors. ("auteur canadien admissible")

(10) The definition of "first-time Canadian author" in subsection 43.7 (16) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 21, is repealed.

18. (1) Subsection 43.10 (4) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 5, section 17, is repealed and the following substituted:

Eligible credit

(4) A qualifying corporation's eligible credit for a taxation year in respect of an eligible production is the total of,

(a)11 per cent of its qualifying Ontario labour expenditure in respect of the production for the taxation year; and

(b)in the case of a regional Ontario production, 3 per cent of the portion of its Ontario labour expenditure in respect of the production for the taxation year, determined on the basis only of expenditures included in the Ontario labour expenditure in respect of the production incurred after May 2, 2000.

(2) Subsection 43.10 (16) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 5, section 17, is amended by adding the following definition: "

regional Ontario production" has the meaning given to that expression in subsection 43.5 (19) if the reference to "eligible Ontario production" in that definition were read as a reference to an "eligible production". ("production rgionale ontarienne")

19. (1) Subsection 43.11 (3) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 42, is amended by striking out "qualifying labour expenditure" and substituting "qualifying expenditure".

(2) Subsection 43.11 (4) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 42, is repealed and the following substituted:

Qualifying expenditure

(4) The qualifying expenditure of a qualifying corporation for a taxation year is the total of its eligible labour expenditure and eligible marketing and distribution expenditure for eligible products for the taxation year.

(3) Section 43.11 of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 42, is amended by adding the following subsections:

Eligible marketing and distribution expenditure

(5.1) The eligible marketing and distribution expenditure of a qualifying corporation for an eligible product for a taxation year is the amount that is the lesser of "A" and "B" where, "

A"is the amount, if any, by which $100,000 exceeds the total of all amounts, if any, each of which is the corporation's eligible marketing and distribution expenditure for the eligible product that was included in the determination of the corporation's tax credit under this section for a prior taxation year, and "

B"is the amount calculated under subsection (5.2).

Same

(5.2) The variable "B" in subsection (5.1) is the amount calculated using the formula,

C - ( D + E + F )

in which, "

C"is the total of all amounts, if any, each of which is a marketing and distribution expenditure in respect of the eligible product incurred by the qualifying corporation in the taxation year or in a prior taxation year that was incurred,

(a)in the month in which the eligible product is completed, and

(b)in the period of 24 months before, or in the period of 12 months after, the month in which the eligible product is completed, "

D"is the total amount of all government assistance, if any, for the marketing and distribution expenditures described in the definition of "C" for the eligible product that, when the qualifying corporation's return is required to be delivered under subsection 75 (1) for the taxation year, the qualifying corporation or any other person or partnership has received, is entitled to receive or can reasonably expect to receive, to the extent that the government assistance has not been repaid pursuant to a legal obligation to do so, "

E"is the total of all amounts, if any, each of which is an eligible marketing and distribution expenditure for the eligible product that was included in the determination of the qualifying corporation's tax credit under this section for a prior taxation year, and "

F"is the total of all marketing and distribution expenditures described in the definition of "C" for the eligible product that are Ontario labour expenditures.

. . . . .

Same, expenditures after May 2, 2000

(14.1) This section, as it reads on May 3, 2000, applies with respect to expenditures incurred after May 2, 2000 that are included in the eligible marketing and distribution expenditure of a qualifying corporation for an eligible product and with respect to expenditures incurred after June 30, 1998 that are included in the Ontario labour expenditure of a qualifying corporation for an eligible product.

(4) Subsection 43.11 (15) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 42, is amended by adding the following definition: "

marketing and distribution expenditure" means the amount determined under the rules prescribed by the regulations. ("dpense de commercialisation et de distribution")

20. Clause 68 (1) (a) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 90, is repealed and the following substituted:

(a)neither the corporation's total assets at the end of the taxation year nor its gross revenue for the taxation year, as recorded in its books and records, exceeds $1 million for a taxation year ending before January 1, 2001 or $1.5 million for a taxation year ending after December 31, 2000; or

. . . . .

Commencement

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

Same

(2) Sections 10 and 20 come into force on January 1, 2001.

Same

(3) Sections 11, 12, 13, 14 and 16, subsections 17 (1) to (3) and (5) to (10) and sections 18 and 19 shall be deemed to have come into force on May 3, 2000.

Same

(4) Section 15 shall be deemed to have come into force on January 1, 1999.

Part III

electricity act, 1998

22. Subsection 63 (4) of the Electricity Act, 1998 is amended by striking out "section 87" and substituting "section 84.1".

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

Repeal

84.1 (1) This Part is repealed on a day to be named by proclamation of the Lieutenant Governor.

Dissolution of Financial Corporation

(2) On the day this Part is repealed, the Financial Corporation is dissolved and its assets and liabilities are transferred to Her Majesty in right of Ontario.

Restriction on proclamation

(3) No proclamation shall be issued under this section unless, in the opinion of the Minister of Finance, substantially all the debts and other liabilities of the Financial Corporation have been retired or defeased.

Determination final

(4) The determination of the Minister of Finance that substantially all the debts and other liabilities of the Financial Corporation have been retired or defeased is final and conclusive and shall not be stayed, varied or set aside by any court.

24. The Act is amended by inserting the following headings immediately before section 85:

part v.1

debt retirement charge

The Residual Stranded Debt

and the Debt Retirement Charge

25. (1) Subsection 85 (1) of the Act is amended by striking out "In this section" at the beginning and substituting "In this Part" and by adding the following definitions: "

collector" means a person appointed as a collector under subsection 85.3 (1); ("percepteur") "

debt retirement charge" means, with respect to a user, the debt retirement charge payable by the user under subsection 85 (4); ("redevance de liquidation de la dette") "

inspector" means a person appointed as an inspector under subsection 85.28 (1); ("inspecteur") "

person" includes Her Majesty in right of Ontario, a partnership, a municipal corporation (including a district or regional municipality), a local board as defined in the Municipal Affairs Act, a police village, or a board, commission or authority established under an Act of the Assembly; ("personne") "

self-generating user" means a person who generates electricity for his, her or its own consumption or for consumption by another person at the expense of the person who generates it; ("usager autoproducteur") "

user" means,

(a)a person who purchases or acquires electricity for his, her or its own consumption or for consumption by another person at the expense of the person who purchases or acquires it,

(b) a person who purchases or acquires electricity on behalf of, or as agent for, a principal who wishes to acquire electricity for consumption by the principal or by other persons at the principal's expense, and

(c)a self-generating user. ("usager")

(2) Subsections 85 (4) and (5) of the Act are repealed and the following substituted:

Duty to pay debt retirement charge

(4) Every user shall pay to the Financial Corporation a debt retirement charge in respect of the amount of electricity consumed in Ontario, to be calculated at the prescribed rate or rates.

Determination re amount consumed

(4.1) For the purposes of subsection (4), the amount of electricity consumed in Ontario is to be determined in accordance with the regulations.

Time and manner of payment

(5) The user shall pay the debt retirement charge at the time and in the manner specified by the regulations.

Exemption from payment

(5.1) Such users or classes of users as may be prescribed are exempted from paying the debt retirement charge in such circumstances as may be prescribed.

Same, under other Acts

(5.2) No person otherwise subject to the debt retirement charge is exempt from paying it by reason of an exemption granted to the person, or granted in respect of the personal or real property of the person, by or under any other Act unless the other Act expressly mentions this Act.

26. The Act is amended by adding the following sections:

Duty to meter consumption

85.1 Such users or classes of users as may be prescribed shall meter their consumption of electricity and shall do so in accordance with the regulations.

Exemptions

85.2 Such users or classes of users as may be prescribed are exempted from such obligations as are specified in the regulation in the circumstances described in the regulation.

Registration

Appointment of collectors

85.3 (1) Such persons as may be prescribed are appointed as collectors of the debt retirement charge.

Registration of collectors

(2) Every collector shall register with the Minister of Finance in accordance with the prescribed requirements and shall maintain his, her or its registration.

Duties of collectors

(3) Every collector shall do the following:

1.Levy and collect the debt retirement charge in accordance with the regulations.

2.Remit, in accordance with the regulations, the debt retirement charge collectable and payable by the collector.

3.Keep the prescribed records in accordance with the prescribed requirements.

4.Submit returns to the Minister of Finance in accordance with the prescribed requirements.

Status

(4) Every collector is an agent of the Financial Corporation for the purpose of levying and collecting the debt retirement charge.

Registration of self-generating users

85.4 (1) Every self-generating user shall register with the Minister of Finance in accordance with the prescribed requirements and shall maintain his, her or its registration.

Duties

(2) Every self-generating user shall do the following:

1.Remit, in accordance with the regulations, the debt retirement charge payable by the self-generating user.

2.Keep the prescribed records in accordance with the prescribed requirements.

3.Submit returns to the Minister of Finance in accordance with the prescribed requirements.

27. The Act is amended by adding the following sections:

Assessment and Reassessment

of Amounts Owing

Assessment payable by collector

85.5 (1) At any time the Minister of Finance considers reasonable, he or she may assess or reassess the debt retirement charge collected by a collector for which the collector has not accounted,

(a)if the collector fails to submit a return or remittance as required by this Part; or

(b)if the collector's returns are not substantiated by the collector's records.

Assessment upon inspection

(2) If it appears to an inspector that a collector has not complied with this Part, the Minister of Finance may assess or reassess the amount of the debt retirement charge collected by the collector or the amount of the penalty authorized by subsection 85.6 (4), based on the inspector's calculation that is described in subsection (3).

Calculation of amount

(3) For the purposes of an assessment or reassessment under subsection (2), the inspector shall calculate the amount of the debt retirement charge or the amount of the penalty and shall make the calculation in the manner and form and using such procedures as the Minister of Finance considers adequate and expedient.

Deemed charge

(4) The amount assessed or reassessed by the Minister of Finance under this section shall be deemed to be a debt retirement charge collected by the collector.

Administrative penalty, collector

85.6 (1) If a collector fails to submit a return to the Minister of Finance as required under this Part, the Minister of Finance may assess a penalty against the collector in an amount equal to the sum of 10 per cent of the amount collectable by the collector in respect of the period for which the return should have been submitted and 5 per cent of the amount payable by the collector in respect of that period.

Same, failure to pay

(2) If a collector submits a return to the Minister of Finance as required under this Part but fails to remit the full amount shown on the return as collectable or payable by the collector, the Minister of Finance may assess a penalty against the collector in an amount equal to the sum of 10 per cent of the amount collectable and not remitted by the collector and 5 per cent of the amount payable and not remitted by the collector.

Same, wilful non-compliance

(3) If the Minister of Finance makes an assessment or reassessment under subsection 85.5 (1) or (2) and if the Minister of Finance is satisfied that the non-compliance that gave rise to the assessment or reassessment was attributable to neglect, carelessness, wilful default or fraud, the Minister of Finance may assess a penalty against the collector equal to the greater of,

(a)$100; or

(b)25 per cent of the amount assessed or reassessed under subsection 85.5 (1) or (2), as the case may be.

Same, failure to collect

(4) If a collector fails to collect a debt retirement charge that the collector is required under this Part to collect, the Minister of Finance may assess a penalty against the collector in an amount equal to the amount that should have been collected.

Exception

(5) The Minister of Finance shall not assess a penalty under subsection (4) against the collector if the Minister of Finance has made an assessment or reassessment under section 85.7 against the user from whom the collector should have collected the amount.

Time limit

(6) The Minister of Finance shall not assess a penalty under subsection (4) with respect to an amount that should have been collected by the collector more than four years before the date of the assessment.

Exception, where misrepresentation, etc.

(7) Subsection (6) does not apply if the Minister of Finance establishes that the collector has made a misrepresentation that is attributable to neglect, carelessness or wilful default or has committed any fraud in making a return or supplying information under this Part or in omitting to disclose information.

Administrative penalty, wilful failure to collect

(8) If a collector fails to collect a debt retirement charge that the collector is required under this Part to collect and if the Minister of Finance is satisfied that the failure is attributable to neglect, carelessness, wilful default or fraud, the Minister of Finance may assess a penalty against the collector,

(a)in an amount equal to the greater of $25 and 25 per cent of the amount that should have been collected, if a penalty has been assessed against the collector under subsection (4) for the failure to collect; or

(b)in an amount equal to the greater of $25 and 125 per cent of the amount that should have been collected, if no penalty has been assessed against the collector under subsection (4) for the failure to collect.

Assessments payable by users

85.7 (1) The Minister of Finance may assess or reassess any debt retirement charge payable by a user.

Time limit

(2) The assessment or reassessment under subsection (1) must be made,

(a)in the case of a user that is not a self-generating user, within four years after the date on which the debt retirement charge became payable; and

(b)in the case of a self-generating user, within four years after the end of the calendar year during which the debt retirement charge became payable.

Exception, where misrepresentation, etc.

(3) Subsection (2) does not apply if the Minister of Finance establishes that the user has made any misrepresentation that is attributable to neglect, carelessness or wilful default or has committed any fraud in making a return or supplying information under this Part or in omitting to disclose information.

Assessment upon inspection

(4) If it appears to an inspector that a user has not complied with this Part, the Minister of Finance may assess or reassess the amount of the debt retirement charge payable by the user, based on the inspector's calculation that is described in subsection (5).

Calculation of amount

(5) For the purposes of an assessment or reassessment under subsection (4), the inspector shall calculate the amount payable by the user and shall make the calculation in the manner and form and using such procedures as the Minister of Finance considers adequate and expedient.

Administrative penalty, user

85.8 If the Minister of Finance makes an assessment or reassessment under section 85.7 and if the Minister of Finance is satisfied that the non-compliance that gave rise to the assessment or reassessment was attributable to neglect, carelessness, wilful default or fraud, the Minister of Finance may assess a penalty against the user equal to the greater of,

(a)$100; or

(b)25 per cent of the amount assessed or reassessed under section 85.7.

Administrative penalty, self-generating user

85.9 (1) If a self-generating user fails to submit a return to the Minister of Finance as required under this Part, the Minister of Finance may assess a penalty against the user in an amount equal to 5 per cent of the debt retirement charge payable by the user in respect of the period for which the return should have been submitted.

Same, failure to remit payment

(2) If a self-generating user submits a return to the Minister of Finance but fails to remit the full amount shown on the return as payable by the user, the Minister of Finance may assess a penalty against the user in an amount equal to 5 per cent of the amount payable and not remitted.

Liability of corporate directors

85.10 (1) This section applies if a corporation fails to collect a debt retirement charge, fails to remit a debt retirement charge that it has collected or fails to pay any interest or penalty under this Part relating to such a charge.

Same

(2) The individuals who were directors of the corporation when the corporation failed to collect or remit the debt retirement charge or failed to pay the interest or penalty are jointly and severally liable, together with the corporation, to pay the charge, interest or penalty to the Financial Corporation.

Assessment

(3) The Minister of Finance may assess or reassess any individual for any amount payable by him or her under subsection (2).

Same

(4) Section 43 of the Retail Sales Tax Act applies, with necessary modifications, with respect to the liability of individuals under subsection (2), assessments or reassessments by the Minister of Finance under this section and the collection of amounts payable.

Assessment of interest payable

85.11 (1) The Minister of Finance may assess interest that is payable on a debt owing to the Financial Corporation under this Part and interest that is payable on a penalty imposed under this Part.

Calculation, re debt

(2) The interest on a debt is payable from the date on which the debt is due to the date on which the amount of the debt plus the interest is received by the Financial Corporation and it is to be calculated at the prescribed rate and in the prescribed manner.

Same, re penalty

(3) The interest on a penalty is payable from the date of the default to which the penalty relates to the date on which the amount of the penalty plus the interest is received by the Financial Corporation and it is to be calculated at the prescribed rate and in the prescribed manner.

Calculation of debt owing

(4) For the purposes of subsection (1), the amount of a debt owing by a person to the Financial Corporation on a particular date is the amount by which "A" exceeds "B" where, "

A"is the aggregate of,

(a)the amount of the debt retirement charge collectable by the person as a collector or payable by the person as a user under this Part before that date,

(b)all amounts or penalties or both assessed under this Part against the person before that date, and

(c)the total of all amounts of interest assessed and payable under this section against the person in respect of a period of time before that date, and "

B"is the aggregate of,

(a)the amount of the debt retirement charge remitted or paid by the person under this Part before that date,

(b)all amounts or penalties or both assessed under this Part and paid by the person before that date, and

(c)the total of all amounts of interest credited to the person in respect of a period of time before that date.

Notice of assessment

85.12 The Minister of Finance shall give a written notice of assessment or reassessment to a user, collector or individual who is assessed or reassessed under this Part.

Effect of information and returns

85.13 (1) The Minister of Finance is not bound by information given or by a return made by or on behalf of a person under this Part and may make assessments under this Part even though no information is given or return is made or even though the information or return is incomplete or incorrect.

Liability

(2) A person's liability to pay a debt retirement charge is not affected by an incorrect or incomplete assessment or by the fact that no assessment has been made.

Payments, Refunds and Rebates

Payment of assessed amounts

85.14 (1) Every person against whom an assessment is made under this Part shall pay to the Financial Corporation the amount assessed, whether or not an objection to the assessment or an appeal from the assessment is outstanding.

Status of assessment

(2) An assessment by the Minister of Finance under this Part shall be deemed to be valid and binding despite any error, defect or omission either in the assessment or in any proceeding under this Part relating to the assessment and the amount assessed shall be deemed to be conclusively established as a debt owing to the Financial Corporation.

Same

(3) Subsection (2) does not prevent the assessment from being varied or vacated on an objection or an appeal and does not prevent a reassessment being made.

Penalty

(4) If a person purports to pay or remit an amount owing under this Part by delivering anything other than legal tender within the meaning of subsection 8 (1) of the Currency Act (Canada) and if, as a result, the Financial Corporation fails to receive full and unconditional payment or settlement, the person is liable to pay to the Financial Corporation the additional fee that is prescribed and the Minister of Finance may assess the additional fee as a penalty.

Same

(5) A penalty assessed under subsection (4) cannot be appealed under this Part and an objection to it cannot be initiated under this Part.

Refunds and rebates

85.15 (1) An amount paid under this Part that is not payable as a debt retirement charge and that was not paid to discharge a liability under an assessment made under this Part shall be refunded.

Rebate

(2) A rebate of a debt retirement charge shall be paid in such circumstances and in accordance with such requirements as may be prescribed.

Interest on refund or rebate

(3) Interest is payable on the amount refunded or the amount of the rebate and shall be calculated at the prescribed rate and in the prescribed manner for the period beginning 21 days after the date on which the Minister of Finance receives the application for the refund or rebate to the date of the refund or rebate.

Time limit for refund

(4) A person is not entitled to a refund under subsection (1) unless application for the refund is made to the Minister of Finance within four years after the date on which the person paid the amount to be refunded or within such longer period as may be permitted by regulation.

Disallowance

(5) If an application for a refund or rebate is made in accordance with this Part and if the application is refused, in whole or in part, the Minister of Finance shall give the applicant a written statement of disallowance specifying the amount that is disallowed and the reasons for disallowing it.

Refund by collector

(6) A collector may refund to a user, in accordance with the regulations, all or part of a debt retirement charge collected from the user by the collector if the user was not required to pay the debt retirement charge and if the refund is made within four years after the user paid it.

Same

(7) The collector may deduct from subsequent remittances under this Part any amount refunded under subsection (6), if the collector makes the deduction within four years after making the refund to the user.

Error in refund or rebate

(8) If a person receives a refund or rebate to which the person is not entitled under this Part, the Minister of Finance may assess or reassess the amount to which the person was not entitled and shall give the person a written statement describing the reasons that the person was not entitled to the amount assessed or reassessed.

Refund of overpayment

85.16 (1) If it is established in a manner described in subsection (2) that a person has paid more than the person is required to pay as or on account of the debt retirement charge under this Part, the amount of the overpayment shall be refunded together with interest calculated at the prescribed rate and in the prescribed manner from the date on which the overpayment arose.

Same

(2) An overpayment may be established as a consequence of an assessment or reassessment under this Part or as a consequence of a final decision of a court in proceedings commenced as a result of an appeal under this Part.

Objections and Appeals

Objections and appeals

85.17 (1) Any of the following persons may object to, or appeal from, an assessment or a reassessment made under this Part, a statement of disallowance given under this Part or a penalty imposed under this Part:

1.A collector.

2.A user.

3.An individual against whom an assessment has been made under section 85.10.

Same

(2) Sections 24, 25, 26, 27, 28, 29 and 30 of the Retail Sales Tax Act apply, with necessary modifications, with respect to objections and appeals under this section.

Collection of Amounts Owing

Funds held in trust

85.18 (1) An amount collectable or collected by a collector as a debt retirement charge or on account of such a charge shall be deemed, despite any security interest in the amount,

(a)to be held in trust for the Financial Corporation;

(b)to be held separate and apart from the collector's property; and

(c)to be held separate and apart from property held by any secured creditor that, but for any security interest, would be the collector's property.

Same

(2) Section 22 of the Retail Sales Tax Act applies, with necessary modifications, with respect to an amount described in subsection (1).

Method of collection

85.19 Any amount payable to the Financial Corporation under this Part that remains unpaid after it becomes due and payable may be collected by the Minister of Finance on behalf of the Financial Corporation and, for that purpose, sections 23 and 36, subsections 37 (1) and (2) and sections 38 and 39 of the Retail Sales Tax Act apply, with necessary modifications.

Offences

Offences

85.20 (1) Every person who contravenes or fails to comply with any of the following provisions is guilty of an offence and, on conviction, is liable to a fine of not less than $100 for each day during which the offence continues:

1.Section 85.1 (duty to meter consumption).

2.Subsection 85.3 (2) (registration of collectors) or paragraph 4 of subsection 85.3 (3) (duty to submit returns, collectors).

3.Subsection 85.4 (1) (registration of self-generating users) or paragraph 3 of subsection 85.4 (2) (duty to submit returns, self-generating users).

4.Subsection 85.28 (3) (prohibition re inspection).

Same, re failure to collect

(2) Every collector who is required by paragraph 1 of subsection 85.3 (3) to levy and collect a debt retirement charge and who fails to do so is guilty of an offence and, on conviction, is liable to a fine equal to the sum of,

(a)the amount of the debt retirement charge that should have been collected, as determined under subsection (3); and

(b)an amount that is not less than $50 and not more than $2,000.

Determination of amount

(3) For the purposes of clause (2) (a), the Minister of Finance shall determine the amount of the debt retirement charge that should have been collected and shall issue a certificate setting out that amount.

Same

(4) The determination made under subsection (3) shall be based upon such information as is available to the Minister of Finance and, unless he or she considers that the collector has engaged in deliberate evasion of this Part, the Minister of Finance shall not consider information respecting a period of more than four years in making the determination.

Effect of certificate

(5) A certificate issued under subsection (3) is proof, in the absence of evidence to the contrary, of the amount of the debt retirement charge that should have been collected and of the authority of the person signing the certificate without any proof of appointment or signature.

Offence, re failure to remit

(6) Every collector who fails to remit an amount collected as, or on account of, a debt retirement charge as required by paragraph 2 of subsection 85.3 (3) is guilty of an offence and, on conviction, is liable to either or both of the following penalties in addition to any other penalty imposed under this Part:

1.A fine in an amount that is,

i.not less than the greater of $100 and 25 per cent of the amount collected and not remitted, and

ii.not more than the greater of $100 and double the amount collected and not remitted.

2.Imprisonment for a term of not more than two years.

Offence, re records

(7) Every collector who is required by paragraph 3 of subsection 85.3 (3) to keep records and who fails to do so in accordance with the regulations is guilty of an offence and on conviction is liable to a fine of not less than $50 and not more than $5,000.

Same, self-generating user

(8) Every self-generating user who is required by paragraph 2 of subsection 85.4 (2) to keep records and who fails to do so in accordance with the regulations is guilty of an offence and on conviction is liable to a fine of not less than $50 and not more than $5,000.

Offence, directors of a corporation

85.21 (1) Any officer, director or agent of a corporation or any other person who directs, authorizes, assents to, acquiesces in or participates in an action or omission by the corporation that is an offence under this Part is guilty of an offence.

Penalty upon conviction

(2) A person convicted of an offence under subsection (1) is liable to the penalty provided for the offence by the corporation, whether or not the corporation has been prosecuted for or convicted of the offence.

Offence, confidentiality

85.22 Every person who contravenes subsection 85.29 (1), (2), (5) or (6) is guilty of an offence and on conviction is liable to a fine of not more than $2,000.

Offence, false statements, etc.

85.23 (1) Every person who engages in any of the following acts or omissions is guilty of an offence:

1.Making, participating in, assenting to or acquiescing in the making of a false or deceptive statement in a return, statement or other document or in an answer required or submitted under this Part.

2.Destroying, altering, mutilating, hiding or otherwise disposing of information or records of a user or collector, for the purpose of evading payment of an amount under this Part.

3.Making, assenting to or acquiescing in the making of a false or deceptive entry of a material particular in a record of a user or collector.

4.Omitting to make or assenting to or acquiescing in the omission of an entry of a material particular in a record of a user or collector.

5.For the purpose of evading a payment under this Part, destroying, altering or otherwise causing a meter to inaccurately measure the consumption of electricity or to cease measuring the consumption of electricity or replacing a meter with another meter that is calculated to mislead.

6.Wilfully evading or attempting to evade, in any manner, payment of an amount under this Part or compliance with an obligation under this Part.

Penalty upon conviction

(2) A person convicted of an offence under subsection (1) is liable to either or both of the following penalties in addition to any other penalty imposed under this Part:

1.A fine in an amount that is,

i.not less than the greater of $1,000 and 50 per cent of the amount that should have been remitted or that the person sought to evade, and

ii.not more than the greater of $1,000 and double the amount that should have been remitted or that the person sought to evade.

2.Imprisonment for a term of not more than two years.

Offence, obtaining refund or rebate by fraud

(3) Every person who, by deceit, falsehood or any other fraudulent means, obtains or attempts to obtain a refund or rebate under this Part to which the person is not entitled is guilty of an offence and, on conviction, is liable to either or both of the following penalties:

1.A fine of not less than $500 and not more than double the amount of the refund or rebate sought.

2.Imprisonment for a term of not more than two years.

General offence

85.24 Every person who contravenes, by any act or omission, a requirement imposed under this Part is guilty of an offence and, on conviction, is liable, where no other penalty is provided for the offence, to a fine of not less than $50 and not more than $5,000.

Imprisonment, failure to pay fine

85.25 If a fine is imposed on an individual under section 85.20, 85.21, 85.22, 85.23 or 85.24 as a result of his or her conviction of an offence under this Part, a sentence of imprisonment for not more than one year in default of payment of the fine may also be imposed on the individual.

Limitation period

85.26 (1) A proceeding to prosecute an offence under this Part must be commenced within six years after the date on which the matter of the offence arose.

Onus of proof

(2) In a prosecution for a failure to pay, collect or remit a debt retirement charge, as the case may be, the accused has the onus of proving that the debt retirement charge was paid, collected or remitted.

Payment of fines

85.27 Fines imposed under sections 85.20, 85.21, 85.22, 85.23 and 85.24 are payable to the Minister of Finance on behalf of the Crown in right of Ontario.

Administration

Inspection

85.28 (1) The Minister of Finance may appoint one or more inspectors who are authorized to exercise any of the powers and perform any of the duties of a person authorized by the Minister of Finance under subsection 31 (1) of the Retail Sales Tax Act for any purpose related to the administration and enforcement of this Part.

Same

(2) Subsections 31 (1), (2) and (2.1) of the Retail Sales Tax Act apply, with necessary modifications, with respect to the administration and enforcement of this Part.

Prohibition

(3) No person shall prevent or interfere with, or attempt to prevent or interfere with, an inspector doing anything that he or she is authorized to do under this section.

Confidentiality

85.29 (1) Except as authorized by this section, no person employed by the Government of Ontario shall,

(a)knowingly communicate or knowingly allow to be communicated to any person any information obtained by or on behalf of the Minister of Finance for the purposes of this Part; or

(b)knowingly allow any person to inspect or have access to any record or thing obtained by or on behalf of the Minister of Finance for the purposes of this Part.

Testimony

(2) No person employed by the Government of Ontario shall be required, in connection with any legal proceedings,

(a)to give evidence relating to any information obtained by or on behalf of the Minister of Finance for the purposes of this Part; or

(b)to produce any record or thing obtained by or on behalf of the Minister of Finance for the purposes of this Part.

Exception

(3) Subsections (1) and (2) do not apply in respect of,

(a)criminal proceedings under an Act of the Parliament of Canada;

(b)proceedings in respect of the trial of any person for an offence under an Act of the Legislature; or

(c)proceedings relating to the collection of the debt retirement charge under this Part.

Communication

(4) A person employed by the Government of Ontario may, in the course of duties in connection with the administration or enforcement of this Part,

(a)communicate or allow to be communicated to another person employed by the Government of Ontario in the administration or enforcement of any law, information obtained by or on behalf of the Minister of Finance for the purposes of this Part; and

(b)allow another person employed by the Government of Ontario in the administration or enforcement of any law, to inspect or have access to any record or thing obtained by or on behalf of the Minister of Finance for the purposes of this Part.

Reciprocal communication

(5) A person who receives information or obtains access to any record or thing under subsection (4) has a duty to communicate or furnish to the Minister of Finance on a reciprocal basis any information, record or thing obtained by the person that affects the administration or enforcement of this Part.

Use of information

(6) Any information, record or thing communicated or furnished under this Part may be used only for the administration or enforcement of this Part or an Act that is administered or enforced by the person receiving the information, record or thing.

Methods of giving notice

85.30 (1) When the Minister of Finance is required under this Part to give a person a document or to give notice to a person, he or she may do so by sending the document or notice by prepaid mail to the person at the person's last known address or by serving the document or notice on the person.

Same, partnership

(2) If the document or notice is to be given to a partnership, the document or notice may be sent to or served on a partner, manager, agent or representative of the partnership.

Same, corporation

(3) If the document or notice is to be given to a corporation, the document or notice may be sent to or served on the president, secretary or another director or on a manager, agent or representative of the corporation.

Proof of compliance

85.31 (1) An affidavit of the Minister of Finance, a person employed in the Ministry of Finance or a person employed by the Financial Corporation about whether this Part has, or has not, been complied with is proof in the absence of evidence to the contrary of the facts set out in the affidavit, without proof of the signature or office of the person making the affidavit.

Status

(2) An affidavit described in subsection (1) may be introduced into evidence without notice, despite section 35 of the Evidence Act.

Right to cross-examine

(3) A party against whom an affidavit described in subsection (1) is adduced may, with the leave of the court, require the deponent to attend court to be cross-examined.

Evidence re collectors

85.32 (1) A copy of a person's application for registration as a collector that is filed with the Minister of Finance under this Part is proof, in the absence of evidence to the contrary, that the person is a collector and is required to remit to the Minister of Finance the debt retirement charge under this Part.

Same

(2) Subject to subsection (4), if a collector is described as a partnership on an application for registration as a collector that is filed with the Minister of Finance under this Part, a copy of the application is proof, in the absence of evidence to the contrary, that the persons named in it are members of the partnership.

Same

(3) Subject to subsection (4), a copy of a return filed by a person or a partnership as a collector is proof, in the absence of evidence to the contrary, that the person or partnership collected the debt retirement charge specified in the return.

Certification

(4) The copy of the application or return must be certified by an official of the Ministry of Finance who has access to the records that are maintained by the Ministry of Finance about the collector, and it may be a copy of an application or return made electronically and reproduced from original data stored electronically.

Evidence re self-generating users

(5) Subsections (1), (2) and (4) apply, with necessary modifications, with respect to applications and returns of a self-generating user.

Evidence re other documents

85.33 (1) For any purpose relating to the administration or enforcement of this Part, the Minister of Finance or a person authorized by him or her may reproduce from original data stored electronically any document previously issued under this Part or any information previously submitted in any form by a collector or a self-generating user, and the reproduction is admissible in evidence and has the same probative force as the original document or information would have had if it had been proved in the ordinary way.

Same

(2) If a book, record or other document is examined or produced under section 85.28 (inspection), the person by whom it is examined or to whom it is produced may make (or cause to be made) one or more copies of it, and a document purporting to be certified by the person to be a copy made under the authority of this subsection is admissible in evidence and has the same probative force as the original document would have had if it had been proved in the ordinary way.

Affidavits, etc.

85.34 (1) Any of the following documents may be sworn by any person who has authority to administer an oath or any person authorized for the purposes of this section by the Lieutenant Governor in Council:

1.A declaration or affidavit relating to a return made under this Part.

2.A statement of information given under section 85.28 (inspection).

Same

(2) A person authorized for the purposes of this section by the Lieutenant Governor in Council shall not charge a fee for swearing a document described in subsection (1).

Forms

85.35 The Minister of Finance may approve the use of forms for any purpose of this Part and the forms may provide for such information to be furnished as the Minister of Finance may require.

28. (1) Clauses 86 (1) (e), (f), (g), (h), (i), (j), (k) and (l) of the Act are repealed and the following substituted:

(e)prescribing one or more rates for the purposes of subsections 85 (4) and 85 (4.1), including rates applicable to particular users, classes of users or uses of electricity, prescribing the amount of electricity with respect to which a rate is applied and prescribing one or more methods for determining the amount of electricity consumed;

(f)exempting particular users or classes of users from paying a debt retirement charge, specifying the circumstances in which the exemption applies and imposing conditions or restrictions with respect to an exemption;

(g)providing for the rebate of the debt retirement charge in whole or in part, prescribing the circumstances in which and conditions under which rebates may be made and prescribing the method of determining the amount of a rebate;

(h)respecting any other matter that the Lieutenant Governor in Council considers necessary or advisable in connection with this Part.

(2) Section 86 of the Act is amended by adding the following subsections:

Regulations, Minister of Finance

(1.1) The Minister of Finance may make regulations,

(a)determining anything that the Minister of Finance is permitted or required by this Part to determine;

(b)defining, for the purposes of this Part, any word or expression used in this Part;

(c)exempting particular users or classes of users from one or more obligations under this Part, other than the obligation to pay a debt retirement charge, specifying the circumstances in which the exemption applies and imposing conditions or restrictions with respect to an exemption;

(d)prescribing the time or times at which a particular user or class of users is required to pay a debt retirement charge;

(e)prescribing, for the purpose of section 85.1, the users or classes of users that are required to meter the consumption of electricity and prescribing methods, procedures and requirements with respect to the metering of electricity;

(f)governing the appointment, registration and duties of collectors;

(g)governing the registration and duties of self-generating users;

(h)prescribing methods of collecting and remitting a debt retirement charge and establishing requirements relating to the collection and remittance, including requirements about invoicing;

(i)requiring the debt retirement charge to be paid or remitted in instalments, specifying when the instalments are to be paid or remitted, and requiring the payment of interest or administrative penalties or both for late payments;

(j)prescribing the additional fee referred to in subsection 85.14 (4);

(k)governing refunds by collectors;

(l)prescribing procedures to be followed by collectors and users in connection with refunds and rebates under this Part;

(m)prescribing, for the purpose of subsection 85.15 (4), a time limit for applying for a refund;

(n)governing payments to a collector when the collector pays a debt retirement charge on behalf of a user and the user then defaults on paying the debt retirement charge to the collector;

(o)prescribing a rate of interest or a method of determining a rate of interest for debts owing under this Part to the Financial Corporation and for amounts owing to a person as a refund or rebate under this Part;

(p)prescribing the records to be kept by a collector or a self-generating user for the purposes of this Part.

. . . . .

Retroactivity

(3) A regulation is, if it so provides, effective with reference to a period before it was filed.

29. Subsections 87 (2), (3) and (4) of the Act are repealed.

30. The definition of "municipal electricity utility" in section 88 of the Act is amended by striking out "or" at the end of clause (c) and by striking out clause (d) and substituting the following:

(d)a corporation established pursuant to section 142 or a subsidiary of such a corporation, if a municipal corporation holds an interest, directly or indirectly, in one or more shares of such a corporation or subsidiary,

(e)a police village that generates, transmits, distributes or retails electricity directly or indirectly, or a corporation or other entity owned by the members of a police village for the purpose of generating, transmitting, distributing or retailing electricity, or

(f)a person or entity prescribed by the regulations.

31. Subsection 89 (2) of the Act is amended by striking out "section 87" and substituting "section 84.1".

32. Subsection 90 (2) of the Act is amended by striking out "section 87" and substituting "section 84.1".

33. Subsection 91 (3) of the Act is amended by striking out "section 87" and substituting "section 84.1".

34. Subsection 92 (3) of the Act is amended by striking out "section 87" and substituting "section 84.1".

35. Subsection 93 (3) of the Act is amended by striking out "section 87" and substituting "section 84.1".

36. (1) Subsection 94 (1) of the Act is repealed and the following substituted:

Municipal electricity property: transfer tax

(1) A municipal corporation or municipal electricity utility shall not transfer to any person any interest in real or personal property that has been used in connection with generating, transmitting, distributing or retailing electricity unless, before the transfer takes effect, it pays to the Financial Corporation the amount determined by multiplying the fair market value of the interest by the prescribed percentage or furnishes security in that amount to the Financial Corporation that meets such requirements as may be prescribed and that is satisfactory to the Financial Corporation.

Forms of property

(1.1) For the purposes of subsection (1), real or personal property that has been used in connection with generating, transmitting, distributing or retailing electricity includes cash, amounts receivable, investments, customer lists, licences, goodwill and other intangible property used in connection with those activities.

(2) Paragraphs 1 and 2 of subsection 94 (3) of the Act are repealed and the following substituted:

1.Any amount payable and paid by the municipal electricity utility under section 93 in respect of the part of the taxation year before the date of the transfer or in respect of a previous taxation year.

2.Any amount payable and paid by the municipal electricity utility under Part II, II.1 or III of the Corporations Tax Act in respect of the part of the taxation year before the date of the transfer or in respect of a previous taxation year.

(3) Subsection 94 (4) of the Act is repealed and the following substituted:

Same

(4) Subject to subsections (5) and (6.1), the amount payable under subsection (1) in a taxation year by a municipal corporation may be reduced by the following amounts:

1.Any amount payable and paid by a municipal electricity utility under section 93 in respect of the part of the taxation year before the date of the transfer or in respect of a previous taxation year, but only if the municipal electricity utility is related to the municipal corporation immediately before the transfer.

2.Any amount payable and paid by a municipal electricity utility under Part II, II.1 or III of the Corporations Tax Act in respect of the part of the taxation year before the date of the transfer or in respect of a previous taxation year, but only if the municipal electricity utility is related to the municipal corporation immediately before the transfer.

(4) Section 94 of the Act is amended by adding the following subsection:

Exception

(6.1) Despite subsection (6), if two or more municipal corporations hold an interest in a municipal electricity utility at the time of the transfer, the amount determined under paragraphs 1 and 2 of subsection (4) in respect of the transfer is the amount calculated in respect of each corporation using the formula,

A B/C

in which, "

A"is the total of the amounts,

(a)that are payable and paid by the municipal electricity utility under section 93 in respect of the part of the taxation year before the date of the transfer or in respect of a previous taxation year, and

(b)that are payable and paid by the municipal electricity utility under Part II, II.1 or III of the Corporations Tax Act in respect of the part of the taxation year before the date of the transfer or in respect of a previous taxation year, "

B"is the fair market value of the municipal corporation's interest in shares of the municipal electricity utility at the time of the transfer, and "

C"is the aggregate fair market value of all issued and outstanding shares of the municipal electricity utility at the time of the transfer.

(5) Subsection 94 (10) of the Act is amended by striking out "section 87" and substituting "section 84.1".

(6) Section 94 of the Act is amended by adding the following subsection:

Status of police village

(10.1) A police village shall be deemed to be a municipal corporation for the purposes of this section.

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

Order to remit, Financial Corporation

95.1 (1) On the recommendation of the Minister of Finance, the Lieutenant Governor in Council may order the Financial Corporation to remit an amount payable under Part V.1 or VI if the Lieutenant Governor in Council considers it to be in the public interest to do so.

Scope of remission

(2) A remission ordered under subsection (1) may be total or partial, conditional or unconditional and may be made,

(a)before, after or pending any suit or proceeding for the recovery of the amount in respect of which the remission is granted;

(b)before or after any payment of the amount payable under Part V.1 or VI has been made or enforced by process or execution; or

(c)in any particular case or class of cases and before the liability to pay arises.

Form of remission

(3) A remission ordered under subsection (1) may be made,

(a)by forbearing to institute a suit or proceeding for the recovery of the amount in respect of which remission is granted;

(b)by delaying, staying or discontinuing any suit or proceeding already instituted;

(c)by forbearing to enforce, staying or abandoning any execution or process upon any judgment;

(d)by the entry of satisfaction upon any judgment; or

(e)by repaying any sum of money paid to or recovered by the Financial Corporation.

Conditional remission

(4) If a remission ordered under subsection (1) is made subject to a condition and the condition is not performed, the amount remitted or to be remitted may be collected or all proceedings may be had as if there had been no remission.

Effect of remission

(5) An unconditional remission and, upon performance of the condition, a conditional remission have effect as if the remission was made after the amount in respect of which it was granted had been sued for and recovered.

38. Subsection 96 (1) of the Act is amended by adding the following clauses:

(0.a)prescribing persons and entities for the purposes of clause (f) of the definition of "municipal electricity utility" in section 88;

. . . . .

(e.1)prescribing requirements relating to security for the purposes of subsection 94 (1).

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

Participation by affiliates

in successor pension plans

104.1 (1) A successor employer may permit an affiliate to be a participating employer under a successor pension plan with respect to such employees of the affiliate, for such period and on such terms as the successor employer determines in its sole discretion acting in its capacity as an employer.

Contributions by participating affiliates

(2) The participating affiliate shall contribute to the pension fund for the plan for a year the amount determined by multiplying the rate described in subsection (4) by the pensionable earnings of the members of the plan who are employees of the affiliate, other than their pensionable earnings, if any, as employees of the successor employer.

Reduction in contributions of successor employer

(3) Despite subsection 104 (1), a successor employer who permits an affiliate to be a participating employer under the plan shall contribute to the pension fund for the plan for a year the amount determined by multiplying the rate described in subsection (4) by the pensionable earnings of the members of the plan who are employees of the successor employer, other than their pensionable earnings, if any, as employees of a participating affiliate.

Rate for employer contributions

(4) The rate for a year is determined by calculating the amount by which the normal cost in respect of all members of the plan exceeds the contributions made for the year to the pension fund for the plan by all members and dividing that amount by the pensionable earnings of all members of the plan for the year, as determined by the actuary of the plan.

Reduction, etc., in contributions

(5) If the plan has a surplus or a prior year credit balance or both, the successor employer, in its sole discretion acting in its capacity as an employer, may permit the participating affiliate to reduce or suspend its contributions to the pension fund to the extent permitted under the Pension Benefits Act, and the affiliate, in its sole discretion acting as employer, may do so.

Status of plan

(6) The plan shall be deemed not to be a multi-employer pension plan for the purposes of the Pension Benefits Act.

Definitions

(7) In this section, "

affiliate" means, in relation to a successor employer,

(a)a corporation that is a subsidiary of the successor employer within the meaning of the Business Corporations Act, or

(b)a corporation or partnership that is controlled by the successor employer, by the person who controls the successor employer or by a person who is controlled by the successor employer, as described in subsection (8); ("membre du mme groupe") "

participating affiliate" means, with respect to a successor employer and a successor pension plan, an affiliate permitted under subsection (1) to be a participating employer under the plan. ("membre du mme groupe participant")

Interpretation, control

(8) For the purposes of clause (b) of the definition of "affiliate" in subsection (7), a corporation or partnership is controlled by another person or by the successor employer if the person or successor employer holds the following, directly or indirectly, other than by way of security:

1.Voting securities carrying more than 50 per cent of the votes for the election of directors of the corporation.

2.An ownership or other interest that confers on the holder more than 50 per cent of the voting interest or other governance rights in the partnership or more than 50 per cent of the income of the partnership.

40. Subsection 106 (3) of the Act is amended by striking out "section 105" and substituting "sections 104.1 and 105".

41. Section 111 of the Act is amended by adding the following subsection:

Tax exemption

(5.1) The Land Transfer Tax Act and the Retail Sales Tax Act do not apply with respect to the transfer of assets.

42. Subsection 126 (1) of the Act is amended by striking out "and" at the end of clause (a) and by adding the following clauses:

(c)that any liability or obligation that is transferred by the order may be transferred to one or more transferees on a joint and several basis, as specified in the order; and

(d)that any liability or obligation that is transferred by the order may be allocated among two or more transferees on the basis set out in the order.

43. (1) Section 138 of the Act is amended by adding the following subsections:

Financial Corporation

(1.1) The Lieutenant Governor in Council may make orders transferring the following assets, liabilities, rights and obligations to the Generation Corporation, the Services Corporation, the IMO, the Electrical Safety Authority or any other person:

1.Assets, liabilities, rights and obligations of, or relating to, the Ontario Hydro Pension and Insurance Plan and the Pension and Insurance Fund of Ontario Hydro.

2.Assets, liabilities, rights and obligations of, or relating to, the Ontario Hydro Financial Corporation Pension Plan and the Ontario Hydro Financial Corporation Pension Fund.

3.Assets, liabilities, rights and obligations of the Financial Corporation relating to an act or omission by the Financial Corporation in connection with its rights or duties under Part VII or by any other person in connection with the person's rights or duties under that Part.

Restriction on scope of order

(1.2) An order under subsection (1.1) shall not contain a provision that conflicts with a provision of an agreement entered into under section 111.

(2) Subsection 138 (2) of the Act is repealed and the following substituted:

Applications of this Part

(2) This Part, except section 137, applies with necessary modifications to an order made under subsection (1) or (1.1) and, for that purpose,

(a)a reference in this Part to a transfer order shall be deemed to be a reference to an order made under subsection (1) or (1.1), as the case may be;

(b)a reference in this Part to Ontario Hydro in connection with an order made under subsection (1) shall be deemed to be a reference to the subsidiary of the Financial Corporation established under section 110; and

(c)a reference in this Part to Ontario Hydro in connection with an order made under subsection (1.1) shall be deemed to be a reference to the Financial Corporation.

Commencement

44. (1) Subject to subsections (2), (3), (4) and (5), this Part comes into force on the day this Act receives Royal Assent.

Same

(2) Subsection 25 (2) and sections 26 and 27 come into force on a day to be named by proclamation of the Lieutenant Governor.

Same

(3) Section 30 and subsection 36 (6) shall be deemed to have come into force on November 30, 2000.

Same

(4) Sections 39 and 40 shall be deemed to have come into force on April 1, 1999.

Same

(5) Subsection 36 (1) shall be deemed to have come into force on November 7, 1998.

Part IV

employer health tax act

45. The Employer Health Tax Act is amended by adding the following section:

Exclusion of certain stock option benefits

from remuneration

2.2 (1) This section applies with respect to an employer if an amount is deemed to be remuneration paid by the employer to an employee under subsection 2 (3.1), (3.2) or (3.3) during a year.

Status of benefit

(2) Despite any other provision of this Act, a benefit described in subsection 2 (3.1), (3.2) or (3.3) is not deemed to be remuneration paid by the employer to the employee during a year,

(a)if the employee is entitled to the benefit by virtue of an eligible agreement described in subsection (3);

(b) if the event giving rise to the benefit occurs after May 2, 2000; and

(c)if the employer meets all of the conditions described in subsection (4) with respect to the year.

Eligible agreement

(3) An agreement between an employee and his or her employer or between an employee and a corporation with which his or her employer does not deal at arm's length, within the meaning of section 251 of the Income Tax Act (Canada), is an eligible agreement referred to in clause (2) (a),

(a)if they entered into the agreement in the course of, or because of, the employee's employment relationship with the employer;

(b)if the agreement entitles the employee to acquire a security of the employer or of a corporation with which the employer does not deal at arm's length; and

(c)if the employee is entitled to deduct an amount under paragraph 110 (1) (d) or (d.1) of the Income Tax Act (Canada) in respect of a benefit relating to the agreement in computing his or her taxable income for a taxation year.

Preconditions

(4) The following are the conditions referred to in clause (2) (c) that the employer must meet:

1.The employer must carry on business through a permanent establishment in Ontario in the taxation year of the employer preceding the taxation year that ends in the year (the "preceding taxation year").

2.The employer must directly undertake scientific research and experimental development within the meaning of subsection 248 (1) of the Income Tax Act (Canada) at a permanent establishment in Ontario in the preceding taxation year.

3.The employer's eligible expenditures for the preceding taxation year must not be less than $25 million or 10 per cent of the employer's total expenses for that taxation year, whichever is less.

4.The employer's specified eligible expenditures for the preceding taxation year must not be less than $25 million or 10 per cent of the employer's adjusted total revenue for that taxation year, whichever is less.

Interpretation, start-ups

(5) For the purposes of subsection (4), if the taxation year of an employer that ends in the year referred to in subsection (2) is the first taxation year of the employer after it is incorporated or is the first taxation year in which the employer carries on business, references to the preceding taxation year are to be read as references to that first taxation year.

Interpretation, eligible expenditures

(6) For the purposes of paragraph 3 of subsection (4) and subsection (9), the amount of an employer's eligible expenditures for a taxation year is calculated using the formula,

A + B C

in which, "

A"is the total amount of the expenditures incurred by the employer in the taxation year at a permanent establishment in Ontario each of which would be a qualified expenditure under subsection 12 (1) of the Corporations Tax Act and is,

(a)an amount described in subparagraph 37 (1) (a) (i) or 37 (1) (b) (i) of the Income Tax Act (Canada), or

(b)a prescribed proxy amount of the employer for the taxation year referred to in paragraph (b) of the definition of "qualified expenditure" in subsection 127 (9) of the Income Tax Act (Canada), "

B"is the reduction, if any, in the amount of "A" required under subsections 127 (18) to (20) of the Income Tax Act (Canada) in respect of a contract payment, and "

C"is the total of all amounts each of which is paid or payable by the employer in the taxation year that is included in the amount of "A" and that would be a contract payment as defined in subsection 127 (9) of the Income Tax Act (Canada) made to the recipient of the amount.

Same

(7) For the purposes of subsection (4), in determining the share of the eligible expenditures of a partnership to be attributed to a partner who is a specified member of the partnership within the meaning of subsection 248 (1) of the Income Tax Act (Canada), the eligible expenditures, total expenses and total revenue of the partnership shall be deemed to be nil.

Interpretation, total expenses

(8) For the purposes of paragraph 3 of subsection (4), the employer's total expenses are as determined in accordance with generally accepted accounting principles, but they exclude expenses that are extraordinary items and the consolidation and equity methods of accounting are not to be used in determining the total expenses.

Interpretation, specified eligible expenditures

(9) For the purposes of paragraph 4 of subsection (4), the amount of an employer's specified eligible expenditures for a taxation year is the amount that is the total of,

(a)the employer's eligible expenditures for the taxation year;

(b)the employer's proportionate share of any expenditures incurred by a partnership of which the employer is a member during a fiscal period of the partnership that ends in the taxation year that would be eligible expenditures if they had been incurred by the employer; and

(c)all expenditures each of which is incurred by a corporation that is associated with the employer throughout the taxation year and that has a permanent establishment in Canada for any taxation year of the associated corporation that ends in the employer's taxation year, including the associated corporation's proportionate share of any expenditures incurred by a partnership of which the corporation is a member during a fiscal period of the partnership that ends in the associated corporation's taxation year, that would be eligible expenditures if they had been incurred by the employer.

Interpretation, adjusted total revenue

(10) For the purposes of paragraph 4 of subsection (4), the adjusted total revenue of an employer for a taxation year is the amount that is the total of,

(a)the employer's total revenue for the taxation year;

(b)the employer's proportionate share of the total revenue of a partnership of which the employer is a member during a fiscal period of the partnership that ends in the taxation year; and

(c)the total revenue of each corporation that is associated with the employer throughout the taxation year and that has a permanent establishment in Canada for any taxation year of the associated corporation that ends in the employer's taxation year, including the associated corporation's share of the total revenue of any partnership of which the corporation is a member for a fiscal period of the partnership ending in the associated corporation's taxation year.

Same, total revenue

(11) For the purposes of clauses (10) (a) and (c), an entity's total revenue for a taxation year is the amount that would be its gross revenue for the taxation year, as determined in accordance with generally accepted accounting principles (except that the consolidation and equity methods must not be used), if the gross revenue excluded revenue from transactions with,

(a)corporations that are associated with the entity throughout the taxation year and that have a permanent establishment in Canada in the taxation year; or

(b)partnerships in which the entity or a corporation described in clause (a) is a member.

Same

(12) For the purposes of clauses (10) (b) and (c), the total revenue of a partnership for a fiscal period is the amount that would be the gross revenue of the partnership for the fiscal period, as determined in accordance with generally accepted accounting principles (except that the equity method must not be used), if the gross revenue excluded revenue of the partnership from transactions with,

(a)the employer; or

(b)corporations that are associated with the employer throughout the employer's taxation year in which the fiscal period ends and that have a permanent establishment in Canada in that taxation year.

Short or multiple taxation years

(13) In determining the amount of an employer's eligible expenditures, total expenses and total revenue for a taxation year for the purposes of this section, the following rules apply:

1.If the taxation year is less than 51 weeks and is the only taxation year ending in a calendar year, the eligible expenditures, total expenses and total revenue for the taxation year are the amounts otherwise determined, multiplied by the ratio of 365 to the number of days in the taxation year.

2.If the taxation year is not the only taxation year of the employer ending in the same calendar year, the amount of the employer's eligible expenditures, total expenses and total revenue for the taxation year is the total of those amounts for all taxation years ending in that calendar year, as otherwise determined, multiplied by the ratio of 365 to the total number of days in those taxation years.

3.If the taxation year of a corporation that is associated with the employer is less than 51 weeks and is the only taxation year of the associated corporation ending in the employer's taxation year, the corporation's eligible expenditures, total expenses and total revenue for that taxation year are the amounts otherwise determined, multiplied by the ratio of 365 to the number of days in the taxation year.

4.If a fiscal period of a partnership of which the employer or the associated corporation is a member is less than 51 weeks and is the only fiscal period of the partnership ending in the taxation year of the employer or the associated corporation, as the case may be, the eligible expenditures, total expenses and total revenue of the partnership for that fiscal period are the amounts otherwise determined, multiplied by the ratio of 365 to the number of days in the fiscal period.

5.If a corporation who is associated with the employer has two or more taxation years ending in the employer's taxation year, the eligible expenditures, total expenses and total revenue of the associated corporation for the taxation year ending in the employer's taxation year are the total of those amounts for all of its taxation years ending in the employer's taxation year, as otherwise determined, multiplied by the ratio of 365 to the total number of days in all of those taxation years.

6.If a partnership of which the employer or the associated corporation is a member has two or more fiscal periods ending in the taxation year of the employer or the associated corporation, as the case may be, the eligible expenditures, total expenses and total revenue for the fiscal period of the partnership ending in the taxation year of the employer or the associated corporation, as the case may be, are those amounts for all of its fiscal periods ending in the taxation year, as otherwise determined, multiplied by the ratio of 365 to the total number of days in all of the fiscal periods.

Associated corporation

(14) For the purposes of this section, an employer and a corporation are associated if they would be associated for the purposes of the Income Tax Act (Canada).

Interpretation

(15) In this section, "

fiscal period" means, in respect of a partnership, its fiscal period for the purposes of the Income Tax Act (Canada); ("exercice") "

taxation year" means, in respect of an employer or a corporation, the employer or corporation's taxation year for the purposes of the Income Tax Act (Canada). ("anne d'imposition")

Commencement

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

Same

(2) Section 45 shall be deemed to have come into force on May 3, 2000.

Part V

income tax act

47. (1) The French version of the definition of "corporation" in subsection 1 (1) of the Income Tax Act is amended by adding "Le terme «socit» a un sens correspondant.".

(2) Clause (b) of the definition of "Provincial Minister" in subsection 1 (1) of the Act, as re-enacted by the Statutes of Ontario, 1998, chapter 34, section 65, is amended by adding the following subclauses:

(i.1)section 8.4.1,

(i.2)Division C.1 of Part II and provisions of this Act and the Federal Act that apply in respect of provisions in that Division.

(3) Subsection 1 (1) of the Act, as amended by the Statutes of Ontario, 1993, chapter 29, section 1, 1996, chapter 1, Schedule C, section 1, 1996, chapter 24, section 11, 1998, chapter 34, section 65, 1999, chapter 9, section 115 and 2000, chaper 10, section 11, is further amended by adding the following definitions: "

bankrupt" has the meaning assigned by the Bankruptcy and Insolvency Act (Canada); ("failli") "

common-law partner" and "common-law partnership" have the meanings given to those expressions by subsection 248 (1) of the Federal Act. ("conjoint de fait", "union de fait")

48. Section 2.1 of the Act, as enacted by the Statutes of Ontario, 1996, chapter 1, Schedule C, section 2 and amended by 1998, chapter 34, section 66, is repealed and the following substituted:

Tax on qualifying environmental trust

2.1 (1) Every trust that is a qualifying environmental trust at the end of a taxation year is liable to a tax for the year.

Same

(2) The tax payable by a qualifying environmental trust for a taxation year is only the amount determined for the year under section 4.1.

49. Paragraph 9 of subsection 3 (1) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 12, is repealed and the following substituted:

9.The additional tax for the 2001 and each subsequent taxation year is 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 $3,560, and

ii.36 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $4,491.

50. (1) The definitions of "first threshold" and "second threshold" in subsection 4 (1) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 13, are repealed.

(2) Subsection 4 (3) of the Act, as re-enacted by the Statutes of Ontario, 2000, chapter 10, section 13, is repealed and the following substituted:

Amount of tax after 1999

(3) The amount of tax payable for a taxation year ending after December 31, 1999 by an individual described in section 2 is the amount determined under the applicable following paragraph, less the deductions permitted under this section and plus the additional taxes, if any, payable under sections 3 and 4.3 to 4.8:

1.If the individual's taxable income for the year does not exceed $30,004, the amount of tax payable by the individual is calculated by multiplying the individual's taxable income for the year by the lowest tax rate for the year.

2.If the individual's taxable income for the year exceeds $30,004 but does not exceed $60,009, the amount of tax payable by the individual is calculated using the formula,

A + B

in which, "

A"is the amount calculated by multiplying $30,004 by the lowest tax rate for the year, and "

B"is the amount calculated by subtracting $30,004 from the individual's taxable income for the year, and then multiplying the resulting amount by the middle tax rate for the year.

3.If the individual's taxable income for the year exceeds $60,009, the amount of tax payable by the individual is calculated using the formula,

A + C + D

in which, "

A"is the amount calculated by multiplying $30,004 by the lowest tax rate for the year, "

C"is the amount calculated by multiplying $30,005 by the middle tax rate for the year, and "

D"is the amount calculated by subtracting $60,009 from the individual's taxable income for the year, and then multiplying the resulting amount by the highest tax rate for the year.

4.Despite paragraphs 1, 2 and 3, the amount of tax payable for the year by a trust to which subsection 122 (1) of the Federal Act applies is calculated by multiplying the trust's taxable income for the year by the highest tax rate for the year.

(3) Subsections 4 (3.1) and (3.2) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 13, are repealed and the following substituted:

Non-refundable credits

(3.1) Subject to the rules in subsection (3.2), an individual may deduct from the amount of tax payable under paragraph 1, 2, 3 or 4 of subsection (3) for a taxation year ending after December 31, 1999 any of the following credits to which the individual is entitled for the taxation year in the amount determined for the year under section 4.0.1:

1.A spouse or common-law partner credit if the individual is entitled to include an amount under paragraph 118 (1) (a) of the Federal Act in the calculation of his or her personal credit for the year under subsection 118 (1) of that Act.

2.A credit for a wholly dependent person if the individual is entitled to include an amount under paragraph 118 (1) (b) of the Federal Act in the calculation of his or her personal credit for the year under subsection 118 (1) of that Act.

3.A single status credit if the individual is entitled to include an amount under paragraph 118 (1) (c) of the Federal Act in the calculation of his or her personal credit for the year under subsection 118 (1) of that Act.

4.A credit for in-home care of a person if the individual is entitled to include an amount in respect of the person under paragraph 118 (1) (c.1) of the Federal Act in the calculation of his or her personal credit for the year under subsection 118 (1) of that Act.

5.A credit for a dependant if the individual is entitled to include an amount in respect of the dependant under paragraph 118 (1) (d) of the Federal Act in the calculation of his or her personal credit for the year under subsection 118 (1) of that Act.

6.A credit in respect of a person described in paragraph 118 (1) (e) of the Federal Act if the individual is entitled to include an amount under that paragraph in the calculation of his or her personal credit for the year under subsection 118 (1) of that Act in respect of the person.

7.An age credit if the individual is entitled to a deduction under subsection 118 (2) of the Federal Act for the year.

8.A credit for Employment Insurance premiums and Canada Pension Plan contributions if the individual is entitled to a deduction under section 118.7 of the Federal Act for the year.

9.A pension credit if the individual is entitled to a deduction under subsection 118 (3) of the Federal Act for the year.

10.A credit in respect of a mental or physical impairment if the individual is entitled to a deduction under subsection 118.3 (1) of the Federal Act for the year.

11.A credit in respect of a disabled dependant if the individual is entitled to a deduction under subsection 118.3 (2) of the Federal Act for the year in respect of the dependant.

12.An amount in respect of unused tuition and education credits if the individual is entitled to a deduction under subsection 118.61 (2) of the Federal Act for the year.

13.A tuition credit if the individual is entitled to a deduction under subsection 118.5 (1) of the Federal Act for the year.

14.An education credit if the individual is entitled to a deduction under subsection 118.6 (2) of the Federal Act for the year.

15.Tuition and education credits transferred to the individual if the individual is entitled to a deduction under section 118.9 of the Federal Act for the year.

16.An amount transferred from a spouse or common-law partner if the individual is entitled to a deduction under section 118.8 of the Federal Act for the year.

17.A medical expense credit if the individual is entitled to a deduction under subsection 118.2 (1) of the Federal Act for the year.

18.A credit for charitable and other gifts if the individual is entitled to a deduction under subsection 118.1 (3) of the Federal Act for the year.

19.A credit for interest on a student loan if the individual is entitled to a deduction under section 118.62 of the Federal Act for the year.

Rules

(3.2) The following rules apply in determining the amount, if any, deductible by an individual under subsection (3.1) for a taxation year:

1.In calculating the total amount an individual may deduct under subsection (3.1), the individual shall deduct the credits to which he or she is entitled in the order in which the credits are listed in that subsection.

2.The total amount of the tax credits an individual may deduct under subsection (3.1) must not exceed the amount of tax payable by him or her under paragraph 1, 2, 3 or 4 of subsection (3) for the taxation year.

3.No pension credit may be deducted by an individual who is subject to tax for the taxation year by reason that he or she is an individual described in clause 2 (b).

4.Subsections 118 (4) to (6) and 118.3 (3) of the Federal Act apply with necessary modifications for the purposes of subsection (3.1).

5.An individual who becomes bankrupt in a calendar year is entitled to deduct only the credits described in the following subparagraphs in computing his or her tax payable for a taxation year that ends in the calendar year:

i.the credits the individual otherwise would be entitled to deduct under paragraphs 8, 9, 13, 14, 17, 18 and 19 of subsection (3.1) for the taxation year that reasonably can be considered wholly applicable to the taxation year, and

ii.the part of the credits the individual otherwise would be entitled to deduct under paragraphs 1 to 7, 10, 11, 15 and 16 of subsection (3.1) for the taxation year that reasonably can be considered applicable to the taxation year.

6.The total of all credits deductible under paragraph 5 for all taxation years of an individual ending in a calendar year must not exceed the total amount that would have been deductible for the calendar year if the individual had not been bankrupt.

7.An individual who is resident in Canada only part of a taxation year is entitled to deduct only the following credits for the taxation year:

i.the credits the individual otherwise would be entitled to deduct under paragraphs 8, 9, 13, 14, 17, 18 and 19 of subsection (3.1) for the taxation year that reasonably can be considered wholly applicable to any period during the year in which the individual was resident in Canada, computed as if that period were the whole taxation year, and

ii.the part of any credits the individual otherwise would be entitled to deduct under paragraphs 1 to 7, 10, 11, 15 and 16 of subsection (3.1) for the taxation year that reasonably can be considered applicable to any period in the year in which the individual was resident in Canada, computed as though the period were the whole taxation year.

8.The total of all amounts deductible under paragraph 7 for the taxation year shall not exceed the total amount that would have been deductible for the taxation year if the individual had been resident in Canada throughout the year.

9.An individual who is not resident in Canada at any time in the taxation year is not entitled to deduct a credit under any of paragraphs 1 to 7, 9, 10, 11, 14, 15, 16 and 17 of subsection (3.1) for the taxation year unless all or substantially all of the individual's income for the year is included in computing his or her taxable income earned in Canada for the year for the purposes of the Federal Act.

10.If a separate return of income with respect to an individual is filed under subsection 70 (2), 104 (23) or 150 (4) of the Federal Act, as it applies for the purposes of this Act, for a particular period and another return of income with respect to the individual is filed under this Act for a period ending in the calendar year in which the particular period ends, the total of all credits under paragraphs 8 to 15 and 17 to 19 of subsection (3.1) claimed in the returns must not exceed the total that could be deducted under those paragraphs for the year with respect to the individual if no separate returns were filed.

11.No amount may be deducted under subsection (3.1), other than a credit under paragraph 18 of that subsection, in determining the amount of tax payable by a trust.

(4) Subsections 4 (3.3) and (3.4) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 13, are repealed and the following substituted:

Minimum tax carry-forward

(3.3) In determining the amount of tax payable for a taxation year ending after December 31, 1999, an individual may deduct an amount not exceeding the lesser of,

(a)the amount of tax payable for the year under paragraph 1, 2, 3 or 4 of subsection (3), less all amounts deductible for the year under subsections (3.1), (3.4), (3.5), (4) and (4.1); and

(b)the amount calculated for the year under subsection (3.3.1).

Calculation

(3.3.1) For the purposes of clause (3.3) (b), the amount is calculated using the formula,

A + B + C D

in which, "

A"is the amount equal to 37.5 per cent of the amount, if any, deducted by the individual under section 120.2 of the Federal Act for the taxation year in respect of a prior taxation year that ends before January 1, 2000 and is one of the seven preceding taxation years, "

B"is the total of all amounts each of which is the amount added under section 4.4 to the individual's tax otherwise payable for a prior taxation year that ends after December 31, 1999 and is one of the seven preceding taxation years, "

C"is the amount equal to 37.5 per cent of that portion, if any, of the amount deducted by the individual under section 120.2 of the Federal Act for the taxation year that is in respect of a prior taxation year if,

(a)the prior taxation year ends after December 31, 1999 and is one of the seven preceding taxation years, and

(b)the individual was not resident in Ontario at the end of the prior taxation year but was resident at that time in another province, and "

D"is the total of all amounts deducted under this subsection in a prior taxation year that are included in the calculation of "A", "B" or "C".

Dividend tax credit

(3.4) In determining the amount of tax payable for a taxation year ending after December 31, 1999, an individual who is resident in Ontario on the last day of the taxation year may deduct an amount equal to the lesser of,

(a)the prescribed percentage of the amount, if any, that is required by paragraph 82 (1) (b) of the Federal Act to be included in his or her income for the year or, if no percentage is prescribed, the amount equal to 25.67 per cent of the amount, if any, that is required by that paragraph of the Federal Act to be included in his or her income for the year; and

(b)the amount of tax payable by the individual for the year under paragraph 1, 2, 3 or 4 of subsection (3), less all amounts deductible for the year under subsection (3.1).

(5) Section 4 of the Act, as amended by the Statutes of Ontario, 1992, chapter 25, section 2, 1996, chapter 1, Schedule C, section 4, 1996, chapter 18, section 2, 1996, chapter 24, section 12, 1997, chapter 10, section 2, 1998, chapter 5, section 2, 1999, chapter 9, section 117 and 2000, chapter 10, section 13, is further amended by adding the following subsection:

Additional deduction

(4.1) In addition to the amount that may be deducted under subsection (4), there may be deducted from the amount of tax otherwise payable by an individual for a taxation year ending after December 31, 1999 an amount calculated using the formula,

G H/I

in which, "

G"is the total of all amounts the individual is entitled to deduct and deducts under this section as a pension credit, dividend tax credit or overseas employment tax credit for the taxation year, "

H"is the amount of the individual's income earned in the taxation year outside Ontario, and "

I"is the amount of the individual's income for the year.

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

Non-refundable credits

4.0.1 (1) The amounts of the non-refundable credits for a taxation year, if any, that may be deducted by an individual under subsection 4 (3.1) are the amounts determined under this section after any adjustments required for the year by section 4.0.2.

Credit, spouse, etc.

(2) The amount of an individual's spouse or common-law partner credit for a taxation year is the amount calculated using the formula,

A [$7,231 + $6,140 (B $614)]

in which, "

A"is the lowest tax rate for the year, and "

B"is the greater of $614 and the income for the year of the individual's spouse or common-law partner or, if the individual and the individual's spouse or common-law partner are living separate and apart at the end of that year by reason of a breakdown of their marriage or common-law partnership, the income of the spouse or common-law partner while married or in the common-law partnership and not separated during the year.

Credit, wholly dependent person

(3) The amount of an individual's credit for a wholly dependent person for a taxation year is the amount calculated using the formula,

A [$7,231 + $6,140 (C $614)]

in which, "

A"is the lowest tax rate for the year, and "

C"is the greater of $614 and the income for the year of the person referred to in paragraph 118 (1) (b) of the Federal Act whom the individual supports.

Single status credit

(4) The amount of an individual's single status credit for a taxation year is the product of the lowest tax rate for the year multiplied by $7,231.

Credit, in-home care

(5) The amount of an individual's credit for a taxation year for in-home care of a person is the amount calculated using the formula,

A ($14,047 D)

in which, "

A"is the lowest tax rate for the year, and "

D"is the greater of $11,661 and the income for the year of the person.

Dependant credit

(6) The amount of an individual's credit for a taxation year in respect of a dependant described in paragraph 118 (1) (d) of the Federal Act is the amount calculated using the formula,

A ($7,231 E)

in which, "

A"is the lowest tax rate for the year, and "

E"is the greater of $4,845 and the dependant's income for the year.

Additional amount

(7) The amount of an individual's credit for a taxation year referred to in paragraph 6 of subsection 4 (3.1) is the amount, if any, in respect of the person calculated using the formula,

A (F G)

in which, "

A"is the lowest tax rate for the year, "

F"is the amount that would be determined for the year in respect of the person under subsection (5) or (6), as the case may be, if paragraph 118 (4) (c) of the Federal Act did not apply for the purposes of subsection 118 (1) of that Act, and "

G"is the amount determined for the year under subsection (3).

Age credit

(8) The amount of an individual's age credit for a taxation year is the amount calculated using the formula,

A ($3,531 H)

in which, "

A"is the lowest tax rate for the year, and "

H"is 15 per cent of the amount, if any, by which the individual's income for the year would exceed $26,284 if no amount were included in his or her income in respect of a gain from a disposition of property to which section 79 of the Federal Act applies.

Credit, EI premiums, etc.

(9) The amount of an individual's credit described in paragraph 8 of subsection 4 (3.1) for a taxation year is the amount that would be determined in respect of the individual for the year under section 118.7 of the Federal Act if the appropriate percentage referred to in that section were the lowest tax rate.

Pension credit

(10) The amount of an individual's pension credit for a taxation year is the amount calculated using the formula,

A I

in which, "

A"is the lowest tax rate for the year, and "

I"is the lesser of $1,000 and,

(a)the amount of the individual's pension income for the year for the purposes of subsection 118 (3) of the Federal Act, if he or she has attained the age of 65 years before the end of the year, or

(b)the amount of the individual's qualified pension income for the year for the purposes of that subsection in any other case.

Credit, impairment

(11) The amount of an individual's credit for a taxation year in respect of a mental or physical impairment is the amount determined by multiplying $4,293 by the lowest tax rate for the year.

Credit, disabled dependant

(12) The amount of an individual's credit for a taxation year in respect of a disabled dependant is the amount, if any, by which "J" exceeds "K" where, "

J"is the amount the dependant is entitled to deduct for the year under paragraph 10 of subsection 4 (3.1), and "

K"is the amount, if any, equal to the amount of tax that would be payable by the dependant for the year under paragraph 1, 2 or 3 of subsection 4 (3), less the amount that would be the total of the dependant's credits for the year under paragraphs 1 to 9 of subsection 4 (3.1).

Unused tuition and education credits

(13) The amount of an individual's unused tuition and education credits for a taxation year is the lesser of "L" and "M" where, "

L"is the amount calculated under subsection (14) for the year, and "

M"is the amount of tax that would be payable by the individual for the year under subsection 4 (3) if no amount were deductible under paragraphs 13 to 19 of subsection 4 (3.1) or under subsection 4 (3.4) for the year and if no tax were payable under section 3 for the year.

Same

(14) For the purposes of subsection (13), the amount is calculated using the formula,

N + (P Q) (R + S)

in which, "

N"is the amount of the individual's unused tuition and education credits at the end of the taxation year ending immediately before the prior taxation year, "

P"is the total amount of the individual's tuition credit and education credit for the prior taxation year, "

Q"is the lesser of "P" and the amount that would be payable by the individual for the prior taxation year under subsection 4 (3) if no amount were deductible under paragraphs 13 to 19 of subsection 4 (3.1) or under subsection 4 (3.4) for the prior taxation year and no tax were payable under section 3 for that year, "

R"is the amount deducted by the individual under paragraph 12 of subsection 4 (3.1) for the prior taxation year, and "

S"is the tuition and education credits transferred for the prior taxation year by the individual to the individual's spouse, common-law partner, parent or grandparent.

Transitional, unused tuition

and education credits

(15) If an individual was not resident in Ontario on the last day of the prior taxation year, the amount of his or her unused tuition and education credits at the end of that year is the amount determined under the prescribed rules.

Same

(16) Despite subsection (14), the amount of an individual's unused tuition and education credits at the end of the 1999 taxation year equals the amount that would be the individual's unused tuition and education credits at the end of that year under section 118.61 of the Federal Act if the percentage applied under sections 118.5 and 118.6 of that Act in computing the individual's tuition and education credits had been 6.37 per cent instead of the appropriate percentage.

Tuition credit

(17) The amount of an individual's tuition credit for a taxation year is the amount that would be determined for the year under section 118.5 of the Federal Act if the appropriate percentage referred to in that section were the lowest tax rate.

Education credit

(18) The amount of an individual's education credit for a taxation year is the amount calculated using the formula,

A B

in which, "

A"is the lowest tax rate for the year, and "

B"is the total of,

(a)$200 multiplied by the number of months in the year during which the individual is enrolled in a qualifying educational program as a full-time student at a designated educational institution for the purposes of section 118.6 of the Federal Act, and

(b)$60 multiplied by the number of months in the year, other than months described in clause (a), in which the individual is enrolled at a designated educational institution in a specified educational program, for the purposes of section 118.6 of the Federal Act, that provides that each student in the program spend not less than 12 hours in the month on courses in the program.

Tuition credit, etc., transferred

(19) Subject to subsection (22), the amount of the credit, if any, an individual is entitled to deduct under paragraph 15 of subsection 4 (3.1) is the amount calculated using the formula,

T U

in which, "

T"is the lesser of $319 and the sum of the tuition credit and education credit the person transferring the credits would be entitled to deduct for the year, and "

U"is the amount of tax that would be payable under paragraph 1, 2 or 3 of subsection 4 (3) by the person transferring the credits for the year, less the credits the person would be entitled to deduct for the year under paragraphs 1 to 12 of subsection 4 (3.1).

Credits transferred

(20) Subject to subsection (22), the amount of an individual's deduction under paragraph 16 of subsection 4 (3.1) for a taxation year in respect of amounts transferred to the individual by his or her spouse or common-law partner is the amount calculated using the formula,

(V W) + X Y

in which, "

V"is the lesser of $319 and the sum of the tuition and education credits the person transferring the credits would be entitled to deduct for the year, "

W"is the amount of tax that would be payable under paragraph 1, 2 or 3 of subsection 4 (3) by the person transferring the credits for the year, less the credits the person would be entitled to deduct for the year under paragraphs 1 to 12 of subsection 4 (3.1), "

X"is the total of the credits under paragraphs 7, 9, 10 or 11 of subsection 4 (3.1) the person transferring the credits would be entitled to deduct for the year, and "

Y"is the amount, if any, calculated under subsection (21).

Same

(21) For the purposes of subsection (20), the amount is calculated using the formula,

Z B

in which, "

Z"is the amount that would be the tax payable for the year under paragraph 1, 2 or 3 of subsection 4 (3) by the person transferring the credits, less the credits the person would be entitled to deduct for the year under paragraphs 3, 8 and 12 of subsection 4 (3.1), and "

B"is the lesser of,

(a)the total of the tuition and education credits the person transferring the credits would be entitled to deduct for the year, and

(b)the amount that would be the tax payable for the year under paragraph 1, 2 or 3 of subsection 4 (3) by the person transferring the credits, less the credits the person would be entitled to deduct for the year under paragraphs 1 to 12 of subsection 4 (3.1).

Maximum transferred

(22) For the purposes of subsections (19) and (20), the person transferring the credits shall designate the amounts of tuition credit and education credit to be transferred for the year and the maximum amount that may be deducted under paragraphs 15 and 16 of subsection 4 (3.1) by an individual for a year in respect of these transferred credits must not exceed those amounts.

Medical expense credit

(23) The amount of an individual's medical expense credit for a taxation year is the amount calculated using the formula,

[A (B C)] (A/D E F)

in which, "

A"is the lowest tax rate for the year, "

B"is the total of the individual's medical expenses that are included in calculating the amount of his or her medical expense credit for the year under subsection 118.2 (1) of the Federal Act, "

C"is the lesser of $1,637 and 3 per cent of the individual's income for the year, "

D"is the lowest percentage referred to in subsection 117 (2) of the Federal Act that applies in determining the amount of tax payable under Part I of that Act for the year, "

E"is the percentage used in determining the amount of "D" for the year in the formula in subsection 118.2 (1) of the Federal Act, and "

F"is the total of all amounts each of which is the amount, if any, by which the income for the year of a person, other than the individual and the individual's spouse or common-law partner, in respect of whom an amount is included in computing the individual's medical expense credit for the year, exceeds $7,231.

Credit, charitable gifts, etc.

(24) The amount of an individual's credit for charitable and other gifts for a taxation year is the amount calculated using the formula,

(A G) + [H (J G)]

in which, "

A"is the lowest tax rate for the year, "

G"is the lesser of $200 and the amount of the individual's total gifts for the year under section 118.1 of the Federal Act, "

H"is the highest tax rate for the year, and "

J"is the amount of the individual's total gifts for the year under section 118.1 of the Federal Act.

Credit, student loan interest

(25) The amount of an individual's credit for a taxation year for interest on a student loan is the amount that would be determined in respect of the individual for the year under section 118.62 of the Federal Act if the appropriate percentage referred to in that section were the lowest tax rate.

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

Indexing, tax and credits

4.0.2 (1) For each taxation year ending after December 31, 2000, each dollar amount in the following is adjusted to the amount calculated using the formula in subsection (3):

1.Subsections 4 (3), 4.0.1 (2) to (6), (8), (10), (11), (18), (19), (20) and (23).

2.Paragraphs 118.2 (2) (b.1), (l.5) and (l.7) of the Federal Act, as they apply in determining the amount of an individual's medical expense credit deductible under paragraph 17 of subsection 4 (3.1).

Indexing, surtax

(2) For each taxation year ending after December 31, 2001, each dollar amount in paragraph 9 of subsection 3 (1) is adjusted to the amount calculated using the formula in subsection (3).

Formula

(3) The formula referred to in subsections (1) and (2) is,

A + [A (B/C 1)]

in which, "

A"is the dollar amount that applied under the subsection for the previous taxation year, or would have applied if the dollar amount had not been rounded to the nearest whole dollar, "

B"is the Consumer Price Index for Ontario for the 12-month period ending on September 30 of the last calendar year ending before the start of the taxation year, and "

C"is the Consumer Price Index for Ontario for the 12-month period ending the day before the start of the 12-month period described in the definition of "B".

Consumer Price Index

(4) The Consumer Price Index for Ontario for a 12-month period is the amount determined under the following rules:

1.The Consumer Price Index for Ontario for each month in the period, as published by Statistics Canada under the authority of the Statistics Act (Canada) and adjusted in such manner as may be prescribed, are added together.

2.The sum determined under paragraph 1 is divided by 12.

3.The amount determined under paragraph 2 is rounded to three decimal points and if the fourth decimal point is 5, the amount is rounded up to the next thousandth.

Rounding

(5) If an adjusted amount calculated under this section is not a whole dollar amount, the adjusted amount is rounded to the nearest whole dollar or, if the adjusted amount otherwise determined is 50 cents less than a whole dollar amount, the adjusted amount is rounded to that whole dollar amount.

Regulations

(6) The Lieutenant Governor in Council may make regulations prescribing rules governing the adjustment of dollar amounts in provisions of this Act not listed in subsection (1) or (2) or in provisions of the Federal Act that apply in determining amounts for the purposes of this Act.

53. The Act is amended by adding the following sections:

Application of s. 40, ITAR

4.5 (1) This section applies if an individual who resides in Ontario on the last day of a taxation year ending after December 31, 1999 receives in the taxation year a payment described in paragraph 40 (1) (a), (b) or (c) of the Income Tax Application Rules, 1971 (Canada) and is liable to pay an amount as tax for the taxation year under section 40 of the Income Tax Application Rules, 1971 (Canada) in respect of the payment.

Additional tax amount

(2) There must be added to the amount of tax otherwise payable by the individual for the taxation year the amount calculated using the formula,

A B/C

in which, "

A"is the total of all amounts each of which is a payment described in paragraph 40 (1) (a), (b) or (c) of the Income Tax Application Rules, 1971 (Canada) received by the individual in the taxation year, as determined for the purposes of section 40 of the Income Tax Application Rules, 1971 (Canada), "

B"is the total of all amounts each of which is the amount of tax otherwise payable by the individual for one of the three previous taxation years,

(a)under section 4 before making a deduction under subsection 4 (6) or section 8, if the previous taxation year ended before January 1, 2000,

(b)under section 4 before making a deduction under subsection 4 (3.4), (3.5), (4), (4.1) or (6) or under section 8, if the previous taxation year ended after December 31, 1999, and

(c)under the laws of a province other than Ontario, if the individual is subject to tax in a province other than Ontario for the previous taxation year, calculated in a manner comparable to the manner of calculating the amount described in clause (a) if the previous taxation year ended before January 1, 2000 or in clause (b) if the previous taxation year ended after December 31, 1999, and "

C"is the total of the individual's incomes for those three previous years.

Lump-sum payments

4.6 (1) This section applies to an individual for a particular taxation year ending after December 31, 1999 if the individual is resident in Ontario on the last day of the year and properly deducts an amount under subsection 110.2 (2) of the Federal Act in computing his or her taxable income for the year.

Additional tax amount

(2) There must be added to the amount of tax otherwise payable by the individual for the particular taxation year the total of all amounts each of which is the amount, if any, by which "A" exceeds "B" where, "

A"is the amount of the individual's notional tax payable for an eligible taxation year to which a specified portion of a qualifying amount received by the individual relates and in respect of which an amount is deducted under section 110.2 of the Federal Act in computing his or her taxable income for the particular taxation year, and "

B"is the individual's tax payable under section 4 for the eligible taxation year, calculated before the additional taxes, if any, payable under this section and sections 3, 4.3, 4.4 and 4.6 to 4.8.

Notional tax

(3) For the purposes of this section, the amount of an individual's notional tax payable for an eligible taxation year is the amount calculated using the formula,

C + D

in which, "

C"is the amount, if any, calculated under subsection (4), and "

D"is an amount, subject to subsection (5), that would be equal to the amount that would be calculated as interest payable on the amount determined as "C" if the interest were calculated,

(a)for the period that began on May 1 of the year following the eligible taxation year and ended immediately before the particular taxation year, and

(b)at the prescribed rate that is applicable for the purposes of subsection 164 (3) of the Federal Act with respect to that period.

Same

(4) The variable "C" in subsection (3) is the amount, if any, by which "E" exceeds "F" where, "

E"is the amount that would be the individual's tax payable under section 4 for the eligible taxation year,

(a)if the tax were calculated without reference to sections 3, 4.3, 4.4 and 4.6 to 4.8, and

(b)if the total of all amounts, each of which is the specified portion, in relation to the eligible taxation year, of a qualifying amount received by the individual before the end of the taxation year, were added in computing the individual's taxable income for the eligible taxation year, and "

F"is the total of all amounts each of which is an amount, in respect of a qualifying amount received by the individual before the taxation year, that was included because of clause (b) in the definition of "E" in computing the individual's notional tax payable for the eligible taxation year.

Exception

(5) For the purposes of subsection (3), the amount of "D" is nil unless the eligible taxation year ended before the taxation year preceding the particular taxation year.

Interpretation

(6) The definitions of "eligible taxation year", "qualifying amount" and "specified portion" in subsection 110.2 (1) of the Federal Act apply for the purposes of this section.

Calculation, prior years

4.7 If an individual resides in Ontario on the last day of a taxation year and is liable to pay an amount for the taxation year under section 4.3, 4.5 or 4.6, the amount of the payment must be determined as if the individual were resident in Ontario on the last day of each prior taxation year that is relevant to the determination of the amount payable under section 4.3, 4.5 or 4.6.

Tax on split income

4.8 (1) This section applies if an individual who is resident in Ontario on the last day of a taxation year ending after December 31, 1999 is a specified individual in relation to the taxation year and the individual is liable to pay an amount as tax under subsection 120.4 (2) of the Federal Act for the taxation year.

Additional tax

(2) There must be added to the amount of tax payable by the individual for the taxation year the amount determined by multiplying the highest tax rate for the taxation year by the individual's split income for the taxation year.

Maximum tax amount

(3) Despite any other provision of this Act, the tax payable for a taxation year by an individual who is a specified individual in relation to the taxation year must not be less than the amount by which "A" exceeds "B" where, "

A"is the amount added under subsection (2) to the individual's tax payable for the taxation year, and "

B"is the total of all amounts each of which is an amount,

(a)that may be deducted under subsection 4 (3.4) or (6) in computing the individual's tax payable for the taxation year, and

(b)that can reasonably be considered to be in respect of an amount included in computing the individual's split income for the taxation year.

Interpretation

(4) The definitions of "specified individual" and "split income" in subsection 120.4 (1) of the Federal Act apply for the purposes of this section.

54. (1) The definition of "benefit year" in subsection 7.1 (1) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 15, is repealed and the following substituted: "

benefit year" means the 1999 calendar year. ("anne vise")

(2) The definition of "eligible individual" in subsection 7.1 (1) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 15, is repealed and the following substituted: "

eligible individual" means an individual other than a trust. ("particulier admissible")

(3) Subsections 7.1 (2) and (3) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 15, are repealed and the following substituted:

Deemed overpayment of tax

(2) An eligible individual shall be deemed to have made an overpayment on October 6 of the year after the benefit year on account of the tax payable by the individual under this Act for a taxation year ending in or at the same time as the benefit year if the following conditions are satisfied:

1.The individual files a return of income for the taxation year within 12 months after the end of the benefit year.

2.On December 31 of the benefit year or on the day in the benefit year the individual dies, if he or she dies in the benefit year,

i.the individual is resident in Ontario,

ii.the individual is not resident in Canada and has reported for work at a permanent establishment of an employer in Ontario throughout the benefit year, or

iii.the individual is not resident in Ontario, is resident in Canada and has income earned in the taxation year in Ontario, for the purposes of section 4.

3.The amount of tax payable by the individual for the taxation year, as determined on assessment or reassessment by the Provincial Minister, exceeds nil.

Amount

(3) Subject to subsections (3.1) and (4), the amount of the deemed overpayment for a benefit year is the lesser of $200 and the total tax otherwise payable by the eligible individual for all taxation years ending in or at the same time as the benefit year.

Multiple taxation years

(3.1) The following rules apply if an individual has more than one taxation year ending in a benefit year or if more than one return may be filed in respect of his or her income for the benefit year:

1.If the individual is a bankrupt at any time in the benefit year, the amount of the deemed overpayment for the benefit year must not exceed $200 and is determined on the basis of each return of income of the individual, other than a return filed under paragraph 128 (2) (e) of the Federal Act.

2.If the individual dies in the benefit year, the amount of the deemed overpayment for the benefit year must not exceed $200 and is determined without reference to information in any return that may be filed on behalf of the individual under subsection 70 (2), paragraph 104 (23) (d) or subsection 150 (4) of the Federal Act.

(4) Subsection 7.1 (5) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 15, is amended by adding "and" at the end of clause (a) and by striking out clause (b).

(5) Subsection 7.1 (6) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 15, is repealed and the following substituted:

Notice and payment

(6) After making a determination under subsection (5), the Provincial Minister,

(a)may send a notice setting out the amount of the overpayment to an eligible individual who is deemed to have made an overpayment; and

(b)shall pay a rebate to the individual equal to the amount of the deemed overpayment.

Time limit

(6.1) The Provincial Minister shall not pay a rebate under this section after December 31, 2001 and no individual is entitled to receive a rebate under this section unless it is paid to the individual before January 1, 2002.

(6) Section 7.1 of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 15, is amended by adding the following subsection:

Exception

(7.1) No amount is repayable under subsection (7) if the amount of the individual's rebate is reduced by reason of an assessment or reassessment of tax issued after December 31, 2001.

(7) Subsection 7.1 (9) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 15, is repealed and the following substituted:

Deemed refund of tax

(9) For the purposes of section 164 of the Federal Act as it applies for the purposes of this Act, a rebate paid under this section shall be deemed to be a refund of tax under this Act.

Exception

(10) Despite subsection (9), no interest is payable on the amount of a rebate under this section or on an amount repayable under subsection (7).

Repeal

(11) This section is repealed on January 1, 2002.

55. (1) The definitions of "tax payable" and "tax otherwise payable" in subsection 8 (1) of the Act are amended by striking out "without reference to subsections 120.1, 121 and 122.3 of the Federal Act" and substituting "without reference to section 120.1 of the Federal Act and subsections 4 (3.4) and (3.5) of this Act."

(2) Section 8 of the Act, as amended by the Statutes of Ontario, 1992, chapter 18, section 55, 1992, chapter 25, section 3, 1993, chapter 29, section 6, 1994, chapter 17, section 99, 1996, chapter 1, Schedule C, section 8, 1996, chapter 24, section 13, 1996, chapter 29, section 9, 1997, chapter 19, section 9, 1997, chapter 43, Schedule B, section 4, 1998, chapter 5, section 3, 1998, chapter 9, section 81, 1998, chapter 34, section 69 and 1999, chapter 9, section 120, is further amended by adding the following subsection:

Property tax credit extension for 1999,

certain taxpayers

(7.2) For the purpose of clause (3) (a) or (3.1) (a), the amount of an individual's 1999 municipal tax that is due in 2000 and paid by the due date may be used to determine the individual's occupancy cost for 1999 or 2000, if the individual's principal residence in 1999 was in an area of jurisdiction of a school board in a territory without municipal organization.

(3) Subsection 8 (8.1.1) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 24, section 13 and amended by 1997, chapter 43, Schedule B, section 4 and 1998, chapter 34, section 69, is further amended by striking out "and" at the end of clause (d) and by striking out clause (e) and substituting the following:

(e)$750 for each of the 1998, 1999 and 2000 taxation years; and

(f)for the 2001 and each subsequent taxation year, unless otherwise prescribed, the amount equal to the total of,

(i)the lesser of $750 and the amount equal to 15 per cent of the equity capital received from the taxpayer during that taxation year or during the first 60 days of the following year by the corporations on the issue of Class A shares, and

(ii)the lesser of $250 and the amount equal to 5 per cent of the equity capital received from the taxpayer during that taxation year or during the first 60 days of the following year by the corporations on the issue of Class A shares, if the shares were issued by the corporations as research oriented investment funds under subsection 16.1 (2) of the Community Small Business Investment Funds Act.

(4) Section 8 of the Act, as amended by the Statutes of Ontario, 1992, chapter 18, section 55, 1992, chapter 25, section 3, 1993, chapter 29, section 6, 1994, chapter 17, section 99, 1996, chapter 1, Schedule C, section 8, 1996, chapter 24, section 13, 1996, chapter 29, section 9, 1997, chapter 19, section 9, 1997, chapter 43, Schedule B, section 4, 1998, chapter 5, section 3, 1998, chapter 9, section 81, 1998, chapter 34, section 69 and 1999, chapter 9, section 120, is further amended by adding the following subsection:

Educational technology tax credit

(15.4) An individual who is an eligible individual under section 8.4.1 for a taxation year may deduct from the amount of tax otherwise payable under this Act for the taxation year an amount not exceeding the amount of his or her educational technology tax credit determined under that section for the taxation year.

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

Educational technology tax credit

8.4.1 (1) The amount of an eligible individual's educational technology tax credit for a taxation year under subsection 8 (15.4) is the amount determined under subsection (2) in respect of eligible equipment that is donated or sold or eligible learning technology that is donated, sold or licensed to an eligible educational institution by the eligible individual after May 2, 2000 and during the taxation year.

Amount of credit

(2) The amount of an eligible individual's educational technology tax credit for a taxation year is the total of all amounts each of which is calculated, in respect of eligible equipment that is donated or sold or eligible learning technology that is donated, sold or licensed to an eligible educational institution in the taxation year, using the formula,

(A B) 0.05

in which, "

A"is the individual's notional price for the equipment or technology, and "

B"is the fair market value of the consideration, if any, paid or payable by the institution for the equipment or technology.

Partnerships

(3) An eligible individual who is a member of an eligible partnership at the end of a taxation year may claim a tax credit equal to the amount described in paragraph 3 in the circumstances described in paragraphs 1 and 2:

1.In a fiscal period of the partnership that ends in the taxation year, the partnership donates or sells eligible equipment or donates, sells or licensed eligible learning technology to an eligible educational institution.

2.If the donation or sale had been made or the licence had been given by an eligible individual, the individual would be entitled to claim a tax credit under this section.

3.The amount of the tax credit the individual may claim is the amount that may reasonably be considered to be the individual's share of the amount that the partnership would be entitled to deduct in respect of the donation, sale or licence if the partnership were a corporation.

Limited partner

(4) Despite subsection (3), no amount may be claimed under this section by an eligible individual in respect of a donation or sale of eligible equipment or a donation, sale or licence of eligible learning technology by a partnership in which the individual is a limited partner.

Certificate

(5) An eligible educational institution shall issue a certificate to the eligible individual or partnership that donates or sells eligible equipment or that donates, sells or licenses eligible learning technology to it, stating that the equipment or technology is eligible equipment or eligible learning technology for the purposes of this section.

Same

(6) The certificate must be issued in a form and be given to the individual or partnership in a manner approved by the Provincial Minister.

Status of certificate

(7) Unless otherwise directed by the Provincial Minister, the certificate forms part of the records and books of account required to be kept under subsection 230 (1) of the Federal Act by the eligible individual making the donation or sale or giving the licence.

Provincial Minister's direction and order

(8) If an eligible educational institution issues one or more incorrect certificates,

(a)the Provincial Minister may direct the educational institution to cease issuing certificates under this section; and

(b)the Provincial Minister may order that all or some of any equipment donated or sold to the institution or all or some of any technology donated, sold or licensed to the institution is not eligible equipment or eligible learning technology for the purposes of this section.

Revocation

(9) The Provincial Minister may revoke a direction or order, or both, made under subsection (8) if he or she is satisfied that the eligible educational institution will comply with the directions with respect to the accuracy, form and content of certificates given under this section.

Conditions

(10) The Provincial Minister may impose such conditions on the revocation of the direction and order under subsection (9) as he or she considers reasonable.

Effect of revocation

(11) Upon the revocation of a direction and order, the equipment or technology that would have otherwise been eligible equipment or eligible learning technology is, to the extent approved by the Provincial Minister, eligible equipment or eligible learning technology for the purposes of this section and may be certified as such by the educational institution.

Definitions

(12) In this section, "

eligible educational institution" means an educational institution that is an eligible educational institution for the purposes of section 13.5 of the Corporations Tax Act\; ("tablissement d'enseignement autoris") "

eligible equipment" means equipment that is eligible equipment for the purposes of section 13.5 of the Corporations Tax Act\; ("matriel admissible") "

eligible individual" means, in respect of a taxation year, an individual,

(a)who carries on business through a permanent establishment in Ontario in the taxation year, and

(b)who is not exempt from tax under section 6; ("particulier admissible") "

eligible learning technology" means technology that is eligible learning technology for the purposes of section 13.5 of the Corporations Tax Act\; ("technologie d'apprentissage admissible") "

eligible partnership" means, in respect of a fiscal period, a partnership,

(a)that has one or more members, other than limited partners, who are eligible individuals for the taxation year in which the fiscal period ends, and

(b)that carries on business through a permanent establishment in Ontario in the fiscal period; ("socit admissible") "

notional price" means, in respect of eligible equipment that is donated or sold or eligible learning technology that is donated, sold or licensed in a taxation year to an eligible educational institution,

(a)the lowest amount that the individual would normally have charged in the year on a sale or licensing of the equipment or technology to a person dealing at arm's length with the individual, within the meaning of section 251 of the Federal Act, if the individual carries on a business of selling eligible equipment or selling or licensing eligible learning technologies in the taxation year, or

(b)the cost to the individual of the equipment or technology, in any other case. ("prix thorique")

57. (1) Section 8.6 of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 74, is amended by adding the following subsection:

Investigations, refunds

(1.1) Any person authorized by the Provincial Minister for any purpose related to the administration or enforcement of section 8.7 may at all reasonable times enter into any premises or place where any business is carried on, where any property is kept, where anything is done in connection with any business or where any books or records are kept or should be kept that contain information relevant in the administration of that section and,

(a)audit or examine the books and records and any account, voucher, letter, telegram or other document that relates to or may relate to the information that is or should be in the books or records, or that relates to or may relate to any amount taken into consideration in determining an amount under that section or the eligibility of any individual to receive an amount under that section;

(b)examine any property, process or matter, an examination of which may, in the person's opinion, assist in determining the accuracy of an application under that section or in ascertaining the information that is or should be in the books or records or in such application, or the amount of any payment under that section; and

(c)require any person on the premises to give him or her all reasonable assistance with the audit or examination and to answer all questions relating to the audit or examination, either orally or, if he or she so requires, in writing, on oath or by statutory declaration, and for that purpose, he or she may require the person to attend at the premises or place with him or her.

(2) Subsection 8.6 (2) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 74, is amended by striking out the portion before clause (a) and substituting the following:

Demand for information

(2) For any purpose related to the administration or enforcement of this section and section 8.5 or 8.7, the Provincial Minister may require from any person, partnership, syndicate, trust, corporation, delivery agent under section 8.5 or other entity or from any partner, agent, member, director or officer of it, by registered letter, or by a demand served personally or delivered by a courier service, within such reasonable time as is stipulated in the registered letter or demand,

. . . . .

58. Part II of the Act is amended by adding the following Division:

Division C.1 - Tax Overpayments

Ontario research employee stock option

tax overpayment

8.7 (1) An individual other than a trust shall be deemed to have made an overpayment on account of tax payable under this Act for a taxation year in the amount of his or her Ontario research employee stock option tax overpayment, if any, for the year if the following conditions are satisfied:

1.The individual is deemed to receive a benefit under section 7 of the Federal Act in the taxation year in respect of an eligible stock option agreement or has realized a capital gain on the sale of shares acquired on the exercise of rights under an eligible stock option agreement.

2.The individual is resident in Ontario on December 31 of the calendar year in which the taxation year ends, or on the day in that calendar year the individual dies if he or she dies in that year.

3.The individual was resident in Ontario on December 31 of the calendar year in which the eligible stock option agreement was entered into.

4.The individual is not an ineligible individual in respect of the eligible stock option agreement.

5.The individual deducted an amount under paragraph 110 (1) (d) or (d.1) of the Federal Act in respect of a benefit relating to the eligible stock option agreement in computing his or her income for the taxation year or a prior taxation year.

6.The individual has filed a return of income under this Act and the Federal Act for the taxation year.

7.The individual is an eligible employee of an eligible employer at the time the eligible employer or a corporation not dealing at arm's length with the eligible employer enters into the eligible stock option agreement.

Amount

(2) The amount of an individual's Ontario research employee stock option tax overpayment for a taxation year is the amount by which "A" exceeds "B" where, "

A"is the amount of tax payable under this Act by the individual for the taxation year before any refund under this section, and "

B"is the individual's adjusted tax amount for the taxation year.

Ineligible individual

(3) An individual is an ineligible individual in respect of an eligible stock option agreement if,

(a)the individual is a specified shareholder of the eligible employer or the corporation that entered into the agreement or of a corporation that is associated with the eligible employer at any time in the taxation year of the eligible employer in which the agreement is entered into or at any time in its five previous taxation years; or

(b)the individual would be a specified shareholder referred to in clause (a) if the individual were to own every share of the capital stock of the eligible employer or the corporation, as the case may be, that the individual, or a person with whom the individual did not deal at arm's length, had a right at that time to acquire under a contract, either immediately or in the future and either absolutely or contingently.

Adjusted tax amount

(4) An individual's adjusted tax amount for a taxation year is the amount of tax that would be payable by the individual under this Act for the year if the individual's taxable income for the year were equal to the individual's adjusted taxable income under this section.

Adjusted taxable income

(5) An individual's adjusted taxable income for a taxation year is the amount determined by deducting from the individual's taxable income for the year the amount that is the lesser of,

(a)$100,000; and

(b)the sum of all amounts each of which is,

(i)the individual's benefit under section 7 of the Federal Act for the taxation year in respect of an eligible stock option agreement, less any deduction claimed under paragraph 110 (1) (d) or (d.1) of that Act in respect of the benefit in computing the individual's taxable income for the taxation year, or

(ii)the lesser of the individual's taxable capital gain for the taxation year from the disposition of shares of a corporation acquired by the individual on the exercise of rights under an eligible stock option agreement and the amount calculated under subsection (6) in respect of the individual for the taxation year.

Calculate amount

(6) For the purposes of subclause (5) (b) (ii), the amount is calculated using the formula,

A (B + C + D)

in which, "

A"is the net taxable capital gain included in computing the individual's income for the taxation year under paragraph 3 (b) of the Federal Act, "

B"is the allowable business investment loss, if any, deducted in computing the individual's income for the taxation year, "

C"is the net capital loss, if any, deducted in computing the individual's taxable income for the taxation year, and "

D"is the amount, if any, deducted in computing the individual's taxable income for the taxation year under subsection 110.6 (2.1) of the Federal Act.

Eligible employee

(7) For the purposes of this section, an individual is an eligible employee at the time the stock option agreement in respect of the individual is entered into if the following conditions are satisfied:

1.The individual is a full-time or permanent part-time employee of an eligible employer during the taxation year of the employer in which the employer or a corporation not dealing at arm's length with it enters into the stock option agreement.

2.The individual is employed by the eligible employer for a period of at least 6 consecutive months and the period of employment includes at least part of that taxation year.

3.The individual is not an incorporated employee providing services on behalf of a personal services business, within the meaning of subsection 125 (7) of the Federal Act, at any time in that taxation year or in any of the eligible employer's five previous taxation years to,

i.the eligible employer,

ii.the corporation that entered into the agreement,

iii.a corporation associated with the eligible employer, or

iv.a partnership of which the eligible employer, the corporation that entered into the agreement or a corporation associated with the eligible employer is a member.

4.The individual's R & D work time percentage or R & D wage percentage is at least 30 per cent for that taxation year.

R & D work time percentage

(8) An individual's R & D work time percentage for an eligible employer's taxation year is the percentage calculated using the formula,

E/F 100%

in which, "

E"is the number of hours during the taxation year in which the individual provided employment services by directly undertaking or supervising in Ontario the prosecution of scientific research and experimental development, if

(a)the salary or wages for the employment services are expenditures directly attributable to the prosecution of scientific research and experimental development under paragraph 2900 (2) (b) of the Federal Regulations, and

(b)the employment services are provided to the employer, a corporation associated with the employer or a partnership of which the employer or a corporation associated with the employer is a partner, and "

F"is the total number of hours in the taxation year in which the individual provided employment services to the employer, a corporation associated with the employer or a partnership of which the employer, or a corporation associated with the employer, is a partner.

R & D wage percentage

(9) An individual's R & D wage percentage for an eligible employer's taxation year is the percentage calculated using the formula,

E/F 100%

in which, "

E"is the individual's total salary or wages for the employer's taxation year for providing employment services by directly undertaking or supervising in Ontario the prosecution of scientific research and experimental development if,

(a)the salary or wages for the employment services are expenditures directly attributable to the prosecution of scientific research and experimental development under paragraph 2900 (2) (b) of the Federal Regulations, and

(b)the employment services are provided to the employer, a corporation associated with the employer or a partnership of which the employer or a corporation associated with the employer is a partner, and "

F"is the individual's total salary or wages for the employer's taxation year for providing employment services to the employer, a corporation associated with the employer or a partnership of which the employer, or a corporation associated with the employer, is a partner.

Eligible employer

(10) For the purposes of this section, an employer is an eligible employer at the time a stock option agreement is entered into by the employer or by a corporation not dealing at arm's length with the employer if the following conditions are satisfied:

1.The employer is a corporation.

2.Throughout the taxation year of the employer in which the stock option agreement is entered into, the employer carries on business through a permanent establishment in Ontario, either directly or as a member of a partnership.

3.In the taxation year before the year in which the stock option agreement is entered into, the employer undertakes scientific research and experimental development at a permanent establishment in Ontario, either directly or as a member of a partnership that directly undertakes the research and development.

4.The employer's eligible expenditures for the taxation year before the year in which the stock option agreement is entered are not less than $25 million or 10 per cent of the employer's total revenue for that taxation year, whichever is less.

Research by associated corporation

(11) For the purposes of paragraph 3 of subsection (10), scientific research and experimental development directly undertaken by a person at a permanent establishment in Ontario during a taxation year of the employer shall be deemed to be directly undertaken by the employer if,

(a)the person is a corporation associated throughout the taxation year with the employer; and

(b)the person undertakes the research and development directly or as a member of a partnership that directly undertakes the research and development.

Eligible expenditures

(12) Subject to subsection (16), an eligible employer's eligible expenditures for a taxation year include,

(a)the employer's proportionate share of any expenditures incurred by a partnership of which it is a member during a fiscal period of the partnership that ends in the particular taxation year that would be eligible expenditures if incurred by a corporation; and

(b)eligible expenditures incurred by each corporation that is associated with the employer throughout the taxation year and that has a permanent establishment in Canada for any taxation year of the associated corporation that ends in the taxation year, including the associated corporation's proportionate share of any expenditures incurred by a partnership of which it is a member during a fiscal period of the partnership that ends in the associated corporation's taxation year that would be eligible expenditures if incurred by a corporation.

Total revenue

(13) Subject to subsection (16), the total revenue of an eligible employer for a taxation year includes,

(a)the employer's proportionate share of the total revenue of a partnership of which it is a member during a fiscal period of the partnership that ends in the taxation year; and

(b)the total revenue of each corporation that is associated with the employer throughout the taxation year and that has a permanent establishment in Canada for any taxation year of the associated corporation that ends in the taxation year, including the associated corporation's share of the total revenue of any partnership of which it is a member for a fiscal period ending in the associated corporation's taxation year.

Partner

(14) A partner's proportionate share of an amount in respect of the partnership for a fiscal period is,

(a)nil if the partner is a specified member of the partnership at any time in the fiscal period; or

(b)the amount determined by multiplying the amount by the ratio of the partner's share of the income or loss of the partnership for that fiscal period to the total income or loss of the partnership for that fiscal period, in any other case.

Start-ups

(15) For the purposes of subsection (10), if the taxation year in which the stock option agreement is entered into is the first taxation year of the employer after it was incorporated or is the first taxation year in which it carries on business, references to the taxation year before that year are read as references to that year.

Short or multiple taxation years

(16) In determining the amount of eligible expenditures and total revenue for a taxation year for the purposes of this section, the following rules apply:

1.If the taxation year is less than 51 weeks and is the only taxation year ending in a calendar year, the eligible expenditures and total revenue for the taxation year are the amounts otherwise determined, multiplied by the ratio of 365 to the number of days in the taxation year.

2.If the taxation year is not the only taxation year of the eligible employer ending in the same calendar year, the amount of the employer's eligible expenditures and total revenue for the taxation year is the total of those amounts for all taxation years ending in that calendar year, as otherwise determined, multiplied by the ratio of 365 to the total number of days in those taxation years.

3.If the taxation year of a corporation that is associated with the eligible employer is less than 51 weeks and is the only taxation year of the associated corporation ending in the employer's taxation year, the corporation's eligible expenditures and total revenue for that taxation year are the amounts otherwise determined, multiplied by the ratio of 365 to the number of days in the taxation year.

4.If a fiscal period of a partnership of which the eligible employer or the associated corporation is a member is less than 51 weeks and is the only fiscal period of the partnership ending in the taxation year of the employer or the associated corporation, as the case may be, the eligible expenditures and total revenue of the partnership for that fiscal period are the amounts otherwise determined, multiplied by the ratio of 365 to the number of days in the fiscal period.

5.If a corporation who is associated with the eligible employer has two or more taxation years ending in the employer's taxation year, the eligible expenditures and total revenue of the associated corporation for the taxation year ending in the employer's taxation year are the total of those amounts for all of its taxation years ending in the employer's taxation year, as otherwise determined, multiplied by the ratio of 365 to the total number of days in all of those taxation years.

6.If a partnership of which the eligible employer or the associated corporation is a member has two or more fiscal periods ending in the taxation year of the employer or the associated corporation, as the case may be, the eligible expenditures and total revenue for the fiscal period of the partnership ending in the taxation year of the employer or the associated corporation, as the case may be, are those amounts for all of its fiscal periods ending in the taxation year, as otherwise determined, multiplied by the ratio of 365 to the total number of days in all of the fiscal periods.

Eligible expenditures

(17) Eligible expenditures of an entity for a taxation year or fiscal period for the purposes of this section is the amount calculated using the formula,

A + B C

in which, "

A"is the total amount of the expenditures incurred by the entity in the taxation year or fiscal period at a permanent establishment in Ontario each of which would be a qualified expenditure under subsection 12 (1) of the Corporations Tax Act and is,

(a)an amount described in subparagraph 37 (1) (a) (i) or 37 (1) (b) (i) of the Federal Act, or

(b)a prescribed proxy amount of the entity for the taxation year referred to in paragraph (b) of the definition of "qualified expenditures" in subsection 127 (9) of the Federal Act, "

B"is the reduction, if any, in the amount of "A" required under subsections 127 (18) to (20) of the Federal Act in respect of a contract payment, and "

C"is the total of all amounts each of which is paid or payable by the entity in the taxation year or fiscal period that are included in the amount of "A" and that would be contract payments as defined in subsection 127 (9) of the Federal Act to the recipient of the amount.

Certificate to Provincial Minister

(18) The eligible employer shall deliver to the Provincial Minister, in a form and manner satisfactory to the Provincial Minister, on or before the date by which the employer is required by section 75 of the Corporations Tax Act to deliver a return for its taxation year in which an eligible stock option agreement was entered into,

(a)a certificate certifying that it is an eligible employer for the taxation year for the purposes of this section and certifying the date it or a corporation not dealing at arm's length with it entered into the eligible stock option agreement;

(b)such information as the Provincial Minister may require to verify that the employer is an eligible employer; and

(c)a list containing the names and social insurance numbers of all eligible employees in respect of whom the agreement was entered into.

Certificate to employee

(19) The eligible employer shall deliver to every individual who is an eligible employee in relation to an eligible stock option agreement a certificate certifying,

(a)that the stock option agreement is an eligible stock option agreement for the purposes of this section; and

(b)that the employee is an eligible employee in relation to the agreement for the purposes of this section.

Same

(20) The certificate under subsection (19) must be in a form approved by the Provincial Minister and must be delivered in a manner acceptable to the Provincial Minister on or before the day by which the eligible employer is required by section 75 of the Corporations Tax Act to deliver a return for its taxation year in which the eligible stock option agreement was entered into.

Notice of benefit, Provincial Minister

(21) The eligible employer in respect of an eligible stock option agreement shall notify the Provincial Minister of the following information:

1.The name, address and social insurance number of each individual who is deemed under section 7 of the Federal Act to receive a benefit relating to the agreement during the relevant calendar year.

2.The amount of the benefit deemed by section 7 of the Federal Act to have been received in the calendar year by each of them.

Same

(22) The notice under subsection (21) must be in a form approved by the Provincial Minister and must be delivered to the Provincial Minister in a manner acceptable to the Provincial Minister on or before the day by which the eligible employer is required by section 75 of the Corporations Tax Act to deliver a return for its first taxation year ending after the calendar year in which the individual is deemed to have received the benefit.

Notice of benefit, employee

(23) The eligible employer shall notify the individual if a benefit deemed to be received by him or her in a calendar year under section 7 of the Federal Act relates to an eligible stock option agreement.

Same

(24) The notice under subsection (23) must be in a form approved by the Provincial Minister and must be delivered in a manner acceptable to the Provincial Minister on or before the day by which the eligible employer is required by section 75 of the Corporations Tax Act to deliver a return for its first taxation year ending after the calendar year in which the individual is deemed to have received the benefit.

Application by individual

(25) An individual who is deemed by this section to have made an overpayment on account of tax payable under this Act for a taxation year in respect of one or more eligible stock option agreements may apply for a refund of the overpayment by filing an application with the Provincial Minister, certifying that he or she satisfies the conditions in subsection (1) and setting out the following information:

1.The year in which each eligible stock option agreement was entered into.

2.The amount of all benefits included in computing his or her income for the taxation year under section 7 of the Federal Act in respect of the eligible stock option agreements.

3.All amounts deducted in computing the individual's taxable income for the taxation year under paragraph 110 (1) (d) or (d.1) of the Federal Act in respect of the benefits.

4.The amount of any taxable capital gains realized by the individual from the disposition of shares acquired through exercising rights under any of the eligible stock option agreements if the taxable capital gains were included in computing the individual's income for the taxation year.

5.The amount of the net taxable capital gains included in computing the individual's income for the taxation year.

6.The amount of any allowable business investment loss deducted in computing the individual's income for the taxation year.

7.The amount of any net capital loss deducted in computing the individual's taxable income for the taxation year.

8.The amount deducted under subsection 110.6 (2.1) of the Federal Act in computing the individual's taxable income for the taxation year.

9.The amount of the individual's taxable income for the taxation year.

10.The amount of tax payable by the individual for the taxation year under this Act, before any refund under this section.

Same

(26) The application under subsection (25) must be in a form approved by the Provincial Minister and must be delivered on or before September 30th of the second calendar year beginning after the taxation year to which the overpayment relates.

Filing of certificate

(27) The individual shall file with the application true copies of all certificates received from eligible employers relating to eligible stock option agreements.

Late application

(28) The Provincial Minister may accept an application that is not filed on time if,

(a)the application is filed no later than two years after the last date by which it is required to be filed under this section; and

(b)the Provincial Minister is satisfied that the individual was unable to file the application at an earlier time for reasons beyond his or her control.

Notice of change

(29) Every employer and corporation that has filed a certificate or notice with the Provincial Minister under this section shall notify the Provincial Minister in a form and manner satisfactory to the Provincial Minister of any change in the information provided to the Provincial Minister.

Time

(30) The notice under subsection (29) must be filed with the Provincial Minister on or before the last day of the second month following the month in which the employer or corporation becomes aware that the information is inaccurate or has changed, whether the inaccuracy or change is a result of a reassessment of tax or is due to another reason.

Restriction

(31) No application may be made under this section if the tax payable under this Act is in respect of taxable income reported in a return filed pursuant to an election made under subsection 104 (23) or 150 (4) of the Federal Act, or a return filed under paragraph 128 (2) (e) or (h) of the Federal Act.

Determination by Provincial Minister

(32) The Provincial Minister shall determine whether the individual is deemed under this section to have made an overpayment of tax for the taxation year and the amount of his or her Ontario research employee stock option tax overpayment, if any, for the year.

Refund of overpayment

(33)

After making a determination under subsection (32), the Provincial Minister shall pay a refund to the individual in the amount, if any, of the individual's Ontario research employee stock option tax overpayment for the year.

Deemed refund of tax

(34) For the purposes of section 164 of the Federal Act, as it applies for the purposes of this Act, a refund paid under this section is a refund of tax under this Act.

Interest

(35) Despite any other provision of this Act or the Federal Act, interest is payable on the amount of a refund under this section only in accordance with the rules in section 8.8.

Anti-avoidance provision

(36) Despite any other provision of this section, the Provincial Minister may disallow an individual's application under this section unless the individual entered into an employment relationship with the eligible employer for bona fide purposes other than to obtain a tax refund under this section.

Shares held in trust

(37) If an individual is entitled to deduct and has deducted an amount under subsection 8 (12) of the Federal Act in computing his or her income for the taxation year in respect of shares issued under an eligible stock option agreement that the individual is deemed to have disposed of under subsection 7 (2) of the Federal Act, the following rules apply:

1.The eligible employer in relation to the eligible stock option agreement shall notify the Provincial Minister in a form and manner satisfactory to the Provincial Minister that the conditions in paragraphs 8 (12) (a) to (d) of the Federal Act have been satisfied.

2.The individual shall repay to the Provincial Minister all or the portion of all refunds paid to the individual in respect of the eligible stock option agreement that reasonably relate to the shares.

Regulations

(38) The Lieutenant Governor in Council may make regulations,

(a)prescribing, with or without modifications, provisions of the Federal Act that apply for the purposes of this section and the manner in which they apply;

(b)prescribing the ordering of disposition of identical properties for the purposes of determining amounts relevant to calculations under this section;

(c)governing the provision of such information as the Provincial Minister may require for the administration of this section;

(d)prescribing the method of determining a corporation's eligible expenditures and total revenue after a purchase or sale of assets used in carrying on its business.

Indemnity

(39) No action or other proceeding for damages or otherwise may be instituted against a person for an act done in good faith in the execution or intended execution of a duty or authority under this section or for an alleged neglect or default in the execution in good faith of any such duty or authority under this section.

Non-arm's length

(40) Persons are not dealing at arm's length for the purposes of this section if they are not dealing at arm's length for the purposes of the Federal Act.

Definitions

(41) In this section, "

associated" means, in respect of a corporation and another person, associated within the meaning of subsection 256 (1) of the Federal Act; ("associ") "

eligible stock option agreement" means a stock option agreement, other than a replacement option agreement,

(a)that is entered into by an eligible employer, or by a corporation that does not deal at arm's length with the eligible employer, after the day the Balanced Budgets for Brighter Futures Act, 2000 receives Royal Assent,

(b)that provides for the sale or issue of shares to an individual who is an eligible employee of the eligible employer at the time the stock option agreement is entered into, and

(c)that is entered into in the course of or by virtue of the eligible employee's employment with the eligible employer; ("convention d'option d'achat d'actions admissible") "

permanent establishment" has the meaning,

(a)given to that expression by subsection 400 (2) of the Federal Regulations in references to a permanent establishment in Canada, and

(b)given to that expression by section 4 of the Corporations Tax Act in references to a permanent establishment in Ontario; ("tablissement permanent") "

permanent part-time employee" has the meaning assigned to it by subsection 1 (1) of the regulations made under the Employment Equity Act (Canada); ("employ permanent temps partiel") "

replacement option agreement" means a stock option agreement that is entered into after the day the Balanced Budgets for Brighter Futures Act, 2000 receives Royal Assent if it is reasonable to consider that the purpose of the agreement is to replace a stock option agreement that was entered into on or before that day; ("convention de remplacement") "

stock option agreement" means an agreement pursuant to which a corporation agrees to sell or issue shares of the capital stock of the corporation or of a corporation with which it does not deal at arm's length to an employee of the corporation or of a corporation with which it does not deal at arm's length; ("convention d'option d'achat d'actions") "

total revenue" means,

(a)for a taxation year of a corporation, the amount that would be the corporation's gross revenue for the taxation year, as determined in accordance with generally accepted accounting principles except that the consolidation and equity methods must not be used, if the gross revenue excluded revenue from transactions with,

(i)corporations that are associated with the corporation throughout the taxation year and that have permanent establishments in Canada in the taxation year, or

(ii)partnerships of which the corporation or a corporation described in subclause (i) is a member, or

(b)for a fiscal period of a partnership of which a corporation is a member, the amount that would be the partnership's gross revenue for the fiscal period, as determined in accordance with generally accepted accounting principles except that the equity method must not be used, if the gross revenue excluded revenue of the partnership from transactions with,

(i)the corporation, or

(ii)corporations that are associated with the corporation throughout the taxation year in which the fiscal period ends and that have permanent establishments in Canada in that taxation year. ("revenu total")

Set-off

8.8 (1) If an individual entitled to a refund under section 8.7 is liable or is about to become liable to make a payment to the Crown in right of Ontario, the Provincial Minister may apply all or part of the refund to that liability instead of paying the refund to the individual.

Interest

(2) If an individual's refund under section 8.7 for a taxation year is paid or applied to a liability of the individual, the Provincial Minister shall pay or apply interest on the refund at the rate prescribed by the regulations for the period,

(a)that begins on the day that is 45 days after the later of the day the individual is required to file his or her return of income for the year and the day he or she does file the return; and

(b)that ends on the day when the refund is paid or applied.

Repayment

(3) If an individual receives a refund under section 8.7 to which he or she is not entitled or in an amount greater than the amount to which he or she is entitled, the individual shall repay the amount of the excess amount, as the case may be, to the Provincial Minister.

Interest on repayment

(4) Amounts repayable under subsection (3) shall bear interest in accordance with the prescribed rules and may be collected as tax payable under this Act.

Minimum payment

(5) Despite any other provision of this Act, where the unpaid balance of the refund payable to an individual under section 8.7 does not exceed the amount determined by the Provincial Minister, the Minister is not required to pay that balance or any interest under subsection (2) on that balance.

Notice of entitlement

(6) After making a determination for the purposes of section 8.7, the Provincial Minister shall send to the individual a notice of entitlement setting out the following if the individual is entitled to a refund under the section:

1.The amount of the overpayment under the section.

2.The basis on which the determination is made.

3.Information on the individual's right to object to the notice of entitlement.

Day of mailing

(7) The day of mailing of a notice of entitlement under this section is deemed to be the date of the notice.

59. Section 10 of the Act, as amended by the Statutes of Ontario, 1997, chapter 10, section 4, 1998, chapter 34, section 75 and 1999, chapter 9, section 123, is further amended by adding the following subsections:

Same

(1.1) Subsection 152 (1) of the Federal Act applies to a refund of a deemed overpayment of tax under section 8.7.

Same

(1.2) Despite subsection 152 (3.1) of the Federal Act, the normal reassessment period for a taxation year with respect to a refund under section 8.7 is the period that ends six years after the date that a notice of entitlement relating to the refund is first sent under section 8.8.

60. Section 14 of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 24, section 16 and amended by 1999, chapter 9, section 124, is repealed and the following substituted:

Returns, payments and interest

14. Subsections 70 (2) and 104 (2), paragraphs 104 (23) (d) and (e), subsection 150 (4), sections 158, 159 and 160, subsections 160.1 (1) and (4), sections 160.2 and 160.3, subsections 161 (1), (2), (2.1), (2.2), (4), (4.01), (5), (6), (6.1), (6.2), (7), (9) and (11) and sections 221.1 and 221.2 of the Federal Act apply for the purposes of this Act.

61. Section 15 of the Act, as amended by the Statutes of Ontario, 1992, chapter 25, section 7, is repealed and the following substituted:

Daily interest

15. Interest computed under subsection 8.8 (2) of this Act or under any of subsections 160.1 (1), 161 (1), (2) and (11), 164 (3), (3.1), (3.2) and (4) and 227 (8.3) and (9.2) of the Federal Act, as they apply for the purposes of this Act, shall be compounded daily and, if interest is computed on an amount under any of those provisions and is unpaid on the day it would, but for this section, have ceased to be computed under that provision, interest at the rate provided by that provision shall be compounded daily on unpaid interest from that day to the day it is paid.

62. Subsection 19 (2) of the Act is, as amended by the Statutes of Ontario, 1999, chapter 9, section 125, is repealed and the following substituted:

False statements or omissions

(2) Every person who, knowingly or under circumstances amounting to gross negligence, makes, participates in, assents to or acquiesces in the making of a false statement or omission in a return, form, certificate, statement, application or answer, in this section referred to as a "return", that is filed or made in respect of a taxation year for the purposes of this Act or a regulation or a provision of the Federal Act or of the Federal Regulations as that provision applies for the purposes of this Act, is liable to a penalty of the greater of $100 and 50 per cent of the amount, if any, by which "A" exceeds "B" where, "

A"is the amount of tax for the year that would be payable under this Act after any refunds to which the individual is entitled for the year if this amount were calculated on the basis of correct and complete information, and "

B"is the tax for the year that would have been payable under this Act had the individual's tax payable for the year been assessed and his or her rebates and refunds of tax for the year, if any, been determined on the basis of the information provided for the year.

63. (1) Subsection 22.1 (1) of the Act, as re-enacted by the Statutes of Ontario, 2000, chapter 10, section 17, and subsection 22.1 (1.1) of the Act, as enacted by 2000, chapter 10, section 17, are repealed and the following substituted:

Objection, deemed overpayment

(1) An individual may object to a determination made under section 8.5 or 8.7 or subsection 10 (4) by serving on the Provincial Minister a notice of objection in a form approved by the Provincial Minister.

Time

(1.1) The notice of objection must be served not later than 90 days after the day on which the notice of entitlement in respect of the determination is sent.

(2) Subsection 22.1 (3) of the Act, as re-enacted by the Statutes of Ontario, 2000, chapter 10, section 17, is repealed and the following substituted:

Issues on objection

(3) In an objection under subsection (1), the individual may raise issues about the following matters only:

1.Whether the individual is entitled to a refund under section 8.7.

2.The residence of the individual, for an objection about an Ontario child care supplement for working families under section 8.5 or about a refund under section 8.7.

3.The calculation of the amount to which the individual is entitled under section 8.5 or 8.7 or the determination of amounts used in the calculation, but not the calculation of an amount determined under the Federal Act or determined by reference to an amount determined under the Federal Act.

64. (1) Clause 43 (a) of the Act, as re-enacted by the Statutes of Ontario, 1998, chapter 34, section 83, is amended by striking out "section 8.5 or 8.6" and substituting "section 8.5, 8.6 or 8.7".

(2) Subclause 43 (b) (iii) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 83, is repealed and the following substituted:

(iii)obtain for the benefit of the person or another person an amount under section 8.5 or 8.7 in excess of the amount to which the person or other person is entitled under that section.

(3) Clause 43 (f) of the Act, as re-enacted by the Statutes of Ontario, 1998, chapter 34, section 83, is amended by striking out "the deemed overpayment under section 8.5" and substituting "the refund under section 8.5 or 8.7".

65. Subsection 49 (5) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 84, is repealed and the following substituted:

Exception

(5) Subsections (3) and (4) do not apply in respect of the employment of powers, the exercise of discretion and the performance of duties under any section of this Act as it relates to the Ontario child care supplement for working families under section 8.5, a refund under section 8.7 or to proceedings in connection with it.

Commencement

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

Same

(2) Section 58 comes into force on a day to be named by proclamation of the Lieutenant Governor.

Same

(3) Section 49 and subsection 55 (3) come into force on January 1, 2001.

Same

(4) Sections 47, 48, 50, 51, 53 and 54, subsections 55 (1), (2) and (4) and sections 56 and 60 shall be deemed to have come into force on January 1, 2000.

part vi

land transfer tax act

67. The definition of "single family residence" in subsection 1 (1) of the Land Transfer Tax Act is repealed and the following substituted: "

single family residence" means a unit or proposed unit under the Condominium Act or a structure or part of a structure that is designed for occupation as the residence of a family, including dependants or domestic employees of a member of the family, whether or not rent is paid to occupy any part of it and whether or not the land on which it is situated is zoned for residential use and,

(a)includes such a residence that is to be constructed as part of the arrangement relating to a conveyance, and

(b)does not include such a residence that is constructed or is to be constructed on agricultural land that is eligible to be classified in the farmlands property class prescribed under the Assessment Act. ("habitation unifamiliale")

68. (1) Subsection 8 (2) of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 4 and 1997, chapter 43, Schedule F, section 6, is repealed and the following substituted:

Refund, residence on farmland

(2) The Minister may refund to a transferee the tax paid by him, her or it under this Act, as calculated under clause 2 (1) (b), on a conveyance of land on which a single family residence is located,

(a)if the residence ceases to be a single family residence under this Act because the land on which the residence is located is eligible to be classified in the farmlands property class prescribed under the Assessment Act\; and

(b)if the Minister receives evidence satisfactory to him or her that the land is eligible to be classified in that property class.

(2) Section 8 of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 4, 1996, chapter 18, section 11, 1997, chapter 10, section 15, 1997, chapter 19, section 12, 1997, chapter 43, Schedule F, section 6 and 1998, chapter 34, section 87, is further amended by adding the following subsection:

Time limit

(3) The Minister shall not make a refund under subsection (2) unless an application is made for the refund within four years after the conveyance is registered.

Commencement

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

Same

(2) Sections 67 and 68 shall be deemed to have come into force on January 1, 1998.

part vii

mining tax act

70. Subsection 1 (1) of the Mining Tax Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 6, is further amended by adding the following definition: "

remote mine" means a mine that is certified under section 4 as a remote mine. ("mine loigne")

71. (1) Subsection 3 (1) of the Act, as amended by the Statutes of Ontario, 2000, chapter 10, section 21, is repealed and the following substituted:

Mining tax

(1) Every operator is liable for and shall pay a tax for a taxation year equal to the amount calculated using the formula,

( A B ) + ( C 0.05 )

in which, "

A"is the amount calculated under subsection (1.1), "

B"is the tax rate for the taxation year as determined under subsection (3.1), and "

C"is the amount calculated under subsection (1.2).

Calculation of "A"

(1.1) The variable "A" in subsection (1) is the amount calculated using the formula,

D - ( E D/F )

in which, "

D"is the operator's profit, if any, for the taxation year as determined under subsection (5) from all mines in which the operator has an interest, less the amount of the operator's profit, if any, for the taxation year as determined in accordance with the prescribed rules from remote mines in which the operator has an interest, "

E"is the amount, if any, claimed as a deduction by the operator under subsection (2), and "

F"is the operator's profit, if any, for the taxation year as determined under subsection (5) from all mines in which the operator has an interest.

Calculation of "C"

(1.2) The variable "C" in subsection (1) is the amount calculated using the formula,

G - ( H G/J )

in which, "

G"is the operator's profit, if any, for the taxation year from remote mines in which the operator has an interest, as determined in accordance with the prescribed rules, "

H"is the amount, if any, claimed as a deduction by the operator under subsection (2), and "

J"is the operator's profit, if any, for the taxation year as determined under subsection (5) from all mines in which the operator has an interest.

(2) Subsection 3 (2) of the Act is repealed and the following substituted:

Deduction

(2) Every operator may claim as a deduction for a taxation year an amount equal to the lesser of,

(a)the proportion of $500,000 that the number of days in the taxation year is of 365; and

(b)the aggregate of amounts determined under section (3) for each mine in which the operator has an interest.

Deduction by associated corporations

(2.1) If two or more associated corporations are operators of one or more mines, the aggregate of the amounts deducted under subsection (2) by the corporations shall not exceed $500,000.

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

Exempt amount for remote mines

3.2 (1) In this section, "

exempt amount for remote mines" means, with respect to an operator, the amount determined under subsection (4) for a taxation year; ("montant exonr au titre des mines loignes") "

exemption limit" means, with respect to an operator's remote mine, the amount determined under subsection (6); ("limite d'exonration") "

exempt period" means, with respect to a remote mine, the exempt period described in subsection (5). ("priode d'exonration")

Application

(2) This section applies to an operator that has an interest in a remote mine that comes into existence after May 7, 1996.

Election by operator

(3) An operator may exclude from the operator's profit for a taxation year ending after May 7, 1996 from remote mines in which the operator has an interest an amount not exceeding the operator's exempt amount for remote mines.

Calculation of exempt amount

(4) The operator's exempt amount for remote mines for a taxation year is the total of all amounts, if any, each of which relates to a remote mine in which the operator has an interest and equals the lesser of,

(a)the operator's profit, if any, as determined in accordance with the prescribed rules from the remote mine for that portion of the exempt period that is during the taxation year; and

(b)the amount, if any, of the operator's exemption limit, if any, for the remote mine for the taxation year.

Exempt period

(5) The exempt period for a remote mine is 120 months less the number of calendar months that have passed in the exempt period for the mine under clause 3.1 (7) (b) and the exempt period begins with the month in which any operator of the mine first becomes entitled to receive proceeds from the output of the mine.

Exemption limit

(6) The operator's exemption limit for a remote mine for a taxation year is the following amount:

1.If there has been only one operator of the mine since it came into existence, the operator's exemption limit for the mine is the amount, if any, by which $10 million exceeds the total of all amounts, if any, excluded from profit by the operator for a previous taxation year under subsection (3) or 3.1 (1).

2.If there have been or are two or more operators of the mine, an operator's exemption limit for the mine is the amount, if any, by which $10 million exceeds the aggregate of,

i.all amounts, if any, each of which is an amount that was excluded from profit in respect of the mine by the operator for a previous taxation year under subsection (3) or 3.1 (1),

ii.all amounts, if any, each of which is the amount of an exemption limit allocated to another operator of the mine under subsection (7) or 3.1 (6), and

iii.all amounts, if any, each of which is an amount that has been excluded under subsection (3) or 3.1 (1) from profit by a person who is no longer an operator of the mine.

Exemption limit, more than one operator

(7) If, in a taxation year, more than one operator holds an interest in a remote mine, the operators shall, by agreement, allocate among themselves the exemption limit for the remote mine and each operator shall file a copy of the allocation agreement with its tax return for each taxation year in which the operator makes an exclusion under subsection (3).

Restriction on allocation of exemption limit

(8) The total of all operators' exemption limits for a remote mine as allocated under subsection (7) shall not exceed the amount by which $10 million exceeds the amounts, if any, that have been excluded under subsection (3) or 3.1 (1) from profit by a person who is no longer an operator of the mine.

Determination of profit, etc.

(9) For the purposes of this section, the operator's profit and the application of losses for a taxation year from a remote mine is to be determined in accordance with the prescribed rules.

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

Certification of a remote mine

4. (1) The Minister of Northern Development and Mines may certify a mine as a remote mine for the purposes of this Act,

(a)if the mine comes into existence after May 7, 1996;

(b)if there is a closure plan for the mine under Part VII of the Mining Act\; and

(c)if, in the opinion of the Minister of Northern Development and Mines, there is at least 30 kilometres between the pit's mouth of the mine and the nearest all-weather road or railway suitable to meet the transportation requirements of the mine.

When mine comes into existence

(2) For the purposes of clause (1) (a), a mine is considered to come into existence after May 7, 1996 in either of the following circumstances:

1.No operator of the mine is entitled to receive proceeds from the output of the mine before May 8, 1996. The mine is separate and distinct geologically from, and has no common workings with, any other mine that is operated at any time before the taxation year in which any operator of the mine first becomes entitled to receive proceeds from the output of the mine.

2.The mine reopens after May 7, 1996 after having been closed for a continuous period of at least 60 months.

Application for certification

(3) An operator who wishes to have a mine certified as a remote mine shall apply to the Minister of Northern Development and Mines for certification of the mine and shall include in the application,

(a)evidence, acceptable to the Minister of Northern Development and Mines, that the criteria set out in subsection (1) are met; and

(b)such other information as the Minister of Northern Development and Mines may require.

Time for applying

(4) An application for certification cannot be made before there is an initial closure plan for the mine under Part VII of the Mining Act.

Revocation of certification

(5) The Minister of Northern Development and Mines may revoke the certification of a mine under this section,

(a)if it is reasonable to believe that an incorrect statement was made in the application or information was omitted from the application for the purpose of obtaining the certification; or

(b)if either of the criteria set out in clauses (1) (a) and (b) is not met.

Effect of revocation

(6) If the certification of a mine is revoked, it shall be deemed never to have occurred.

Effect of mine closure

(7) If a mine certified under this section is closed for a continuous period of at least 60 months, the mine ceases to qualify as a remote mine.

Reopening of mine

(8) If a mine described in subsection (7) is reopened, it is considered to be a new mine upon the reopening and the operator may make a fresh application for certification of the mine under this section.

Definition

(9) In this section, "

pit's mouth", in respect of a mine, has the meaning prescribed by regulation.

Commencement

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

Same

(2) Section 73 shall be deemed to have come into force on November 30, 2000.

Same

(3) Sections 70, 71 and 72 shall be deemed to have come into force on May 7, 1996.

part viii

ministry of treasury

and economics act

75. Section 8 of the Ministry of Treasury and Economics Act is repealed and the following substituted:

Financial responsibility

8. The deputy minister of each ministry of the Government of Ontario and the chief executive officer of, or person holding a similar position in, each board, commission, authority, corporation and agency of the Government of Ontario is responsible for ensuring the proper conduct of the financial business of the relevant ministry, board, commission, authority, corporation and agency in accordance with such directives or guidelines as are made or issued under this Act.

Commencement

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

part ix

northern ontario heritage fund act

77. Subsection 3 (4) of the Northern Ontario Heritage Fund Act is amended by adding at the end "or in The District Municipality of Muskoka".

Commencement

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

part x

northern services boards act

79. Section 35 of the Northern Services Boards Act, as enacted by the Statutes of Ontario, 1998, chapter 16, section 10, is amended by adding at the end "and The District Municipality of Muskoka".

Commencement

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

part xi

ontario guaranteed

annual income act

81. (1) Section 1 of the Ontario Guaranteed Annual Income Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 168, is further amended by adding the following definition: "

allowance" means, unless the context indicates otherwise, an allowance authorized to be paid under Part III of the Old Age Security Act (Canada). ("allocation")

(2) The definition of "basic monthly income" in section 1 of the Act is repealed and the following substituted: "

basic monthly income" of a beneficiary for a month means,

(a)for any month in which the beneficiary is unmarried and is not in a common-law partnership, and for which the beneficiary is entitled to receive in the month a pension or a supplement, an amount equal to the sum of one-twelfth of his or her income for the base calendar year, plus the amount of any pension or supplement that the beneficiary is entitled to receive in the month,

(b)for any month throughout the whole of which the beneficiary is married to or is in a common-law partnership with a person who is entitled to receive in the month an increment and a pension or a supplement, and for which the beneficiary is entitled to receive a pension or a supplement, an amount equal to one-twenty-fourth of the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner, plus the amount of any pension or supplement that the beneficiary is entitled to receive in the month,

(c)for any month throughout the whole of which the beneficiary is married to or is in a common-law partnership with a person who is not entitled to receive in the month a pension or a supplement, and for which the beneficiary is entitled to receive a pension or a supplement, an amount equal to one-twenty-fourth of the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner, minus the lesser of,

(i)one-half of the amount of any pension that the beneficiary is entitled to receive in the month, or

(ii)an amount equal to one-twenty-fourth of the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner,

plus,

(iii)the amount of any pension or supplement that the beneficiary is entitled to receive in the month,

(d)for any month in which the beneficiary is unmarried and is not in a common-law partnership, and for which the beneficiary is not entitled to receive a pension or a supplement, an amount equal to one-twelfth of his or her income for the base calendar year,

(e)for any month throughout the whole of which the beneficiary is married to or is in a common-law partnership with a person who is entitled to receive in the month an increment, and for which neither the beneficiary nor his or her spouse or common-law partner is entitled to receive a pension or a supplement, an amount equal to one-twenty-fourth of the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner,

(f)for any month throughout the whole of which the beneficiary is married to or is in a common-law partnership with a person who is not entitled to receive in the month an increment, a pension or a supplement, and for which the beneficiary is not entitled to receive a pension or a supplement,

(i)where the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner is less than an amount equal to 12 times the maximum amounts of pension and supplement that are authorized to be paid in that month under the Old Age Security Act (Canada) to a person who is not married and is not in a common-law partnership,

an amount equal to one-twelfth of the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner, or

(ii)where the aggregate of the incomes for the calendar year of the beneficiary and his or her spouse or common-law partner is not less than an amount equal to 12 times the maximum amounts of pension and supplement that are authorized to be paid in that month under the Old Age Security Act (Canada) to a person who is not married and is not in a common-law partnership, and is less than an amount equal to the sum of,

(A)an amount equal to 24 times the amount of the pension that is authorized to be paid in the month under the Old Age Security Act (Canada),

(B)an amount equal to 12 times the maximum amount of supplement that is authorized to be paid in the month under the Old Age Security Act (Canada) to a person who is not married and is not in a common-law partnership, and

(C)$48,

an amount equal to the sum of the amount of the pension that is authorized to be paid in the month under the Old Age Security Act (Canada), plus the maximum amount of the supplement that is authorized to be paid in that month under the Old Age Security Act (Canada) to a person who is not married and is not in a common-law partnership, or

(iii)where the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner is equal to or greater than the sum of the amounts described in sub-subclauses (ii) (A), (B) and (C),

an amount equal to the sum of,

(A)the amount equal to one-thirty-sixth of the result obtained by subtracting from the amount of the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner the sum of the amounts described in sub-subclauses (ii) (A) and (B) and $12.00,

(B)the amount of the pension that is authorized to be paid in the month under the Old Age Security Act (Canada), and

(C)the maximum amount of the supplement that is authorized to be paid in the month under the Old Age Security Act (Canada) to a person who is not married and is not in a common-law partnership, or

(g)for any month throughout the whole of which the beneficiary is married to or is in a common-law partnership with a person who is entitled to receive an increment and a pension or supplement, and for which the beneficiary is not entitled to receive a pension or supplement, an amount equal to one-twelfth of the aggregate of the incomes for the base calendar year of the beneficiary and his or her spouse or common-law partner, plus the aggregate of,

(i)the amount of any increment, and

(ii)the amount of any pension or supplement,

that the spouse or common-law partner of the beneficiary is entitled to receive in the month. ("revenu mensuel de base")

(3) Section 1 of the Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 168, is further amended by adding the following definitions: "

common-law partner" has the meaning given to it by section 2 of the Old Age Security Act (Canada); ("conjoint de fait") "

common-law partnership" means the relationship between two persons who are common-law partners of each other. ("union de fait")

(4) The definition of "defined income" in section 1 of the Act is amended by striking out "a supplement, a pension, a spouse's allowance, a payment similar to a supplement, pension or spouse's allowance under a law of a province of Canada" and substituting "a supplement, a pension, an allowance, a payment similar to a supplement, pension or allowance under a law of a province of Canada".

(5) Clause (a) of the definition of "guaranteed income limit" in section 1 of the Act is amended by striking out "is married to a spouse who is not entitled to receive a spouse's allowance" and substituting "is married to, or is in a common-law partnership with, a person who is not entitled to receive an allowance".

(6) Clause (c) of the definition of "guaranteed income limit" in section 1 of the Act is amended by striking out "is married to a spouse who is entitled to receive a spouse's allowance" and substituting "is married to, or is in a common-law partnership with, a person who is entitled to receive an allowance".

(7) The definition of "month throughout the whole of which the beneficiary is married" in section 1 of the Act is repealed.

(8) The definitions of "spouse" and "spouse's allowance" in section 1 of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 168, are repealed.

(9) Section 1 of the Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 168, is further amended by adding the following subsections:

Interpretation, marriage

(2) A reference in this Act to a month throughout the whole of which the beneficiary is married to a person includes the month in which the beneficiary ceases to be married as a result of the death of his or her spouse or otherwise, and a reference to a month in which the beneficiary is unmarried does not include the month in which the beneficiary so ceases to be married.

Same, common-law partnership

(3) A reference in this Act to a month throughout the whole of which the beneficiary is in a common-law partnership with a person includes the month in which the beneficiary ceases to be in a common-law partnership as a result of the death of his or her common-law partner or otherwise, and a reference to a month in which the beneficiary is not in a common-law partnership does not include the month in which the beneficiary so ceases to be in a common-law partnership.

82. Clauses 2 (4) (b) and (c) of the Act are repealed and the following substituted:

(b)for every full $48 of the aggregate of the incomes for the base calendar year of the person and his or her spouse or common-law partner, if the person to whom the monthly benefit is paid is married to a spouse or is in a common-law partnership with a person who is entitled to receive in the month a monthly benefit or an increment under this Act; or

(c)for every full $48 of the amount by which the aggregate of the incomes for the base calendar year of the person and his or her spouse or common-law partner exceeds the product of 12 times the maximum amount of pension that is authorized to be paid in the month under the Old Age Security Act (Canada) to an unmarried person or a person who is not in a common-law partnership, if the person to whom the monthly benefit is paid is married to or in a common-law partnership with either a person who is not entitled to receive in the month an increment, a pension, a supplement or a monthly benefit, or a person who is entitled to receive in the month an allowance.

83. (1) Clause 6 (1.1) (b) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 171, is amended by striking out "spouse" and substituting "spouse or common-law partner".

(2) Subsection 6 (2) of the Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 171, is further amended by striking out "spouse" wherever it occurs and substituting in each case "spouse or common-law partner".

(3) Subsection 6 (3) of the Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 171, is further amended by striking out "spouse" wherever it occurs and substituting in each case "spouse or common-law partner".

(4) Subsection 6 (4) of the Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 171, is further amended by striking out "spouse" wherever it occurs and substituting in each case "spouse or common-law partner".

(5) Subsection 6 (5) of the Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 171, is further amended by striking out "spouse" wherever it occurs and substituting in each case "spouse or common-law partner".

(6) Subsection 6 (6) of the Act is amended by striking out "spouse" wherever it occurs and substituting in each case "spouse or common-law partner".

(7) Subsection 6 (7) of the Act is amended by striking out "spouse" wherever it occurs and substituting in each case "spouse or common-law partner".

84. Subsection 13 (1) of the Act is amended by striking out "spouse" and substituting "spouse or common-law partner".

Commencement

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

Same

(2) Sections 81, 82, 83 and 84 shall be deemed to have come into force on July 1, 2000.

part xii

ontario home ownership

savings plan act

86. (1) Subsection 1 (1) of the Ontario Home Ownership Savings Plan Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 123, is further amended by adding the following definitions: "

common-law partner", with respect to an individual at any time, means a person who cohabits at that time in a conjugal relationship with the individual if,

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

(b)the person and the individual are both parents of the same child; ("conjoint de fait") "

common-law partnership" means the relationship between two persons who are common-law partners of each other. ("union de fait")

(2) The definition of "tax credit" in subsection 1 (1) of the Act is amended by striking out "spouse or former spouse" and substituting "spouse or former spouse or common-law partner or former common-law partner".

(3) Subsections 1 (8), (9) and (10) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 17, section 123, are repealed and the following substituted:

Spouse or common-law partner

(8) If at any time a person is a spouse or a common-law partner of an individual, the person shall be deemed to be a spouse or common-law partner, as the case may be, of the individual at a later time unless, because of a breakdown of their conjugal relationship, the person and the individual were not cohabiting at the later time for a period of at least 90 days that includes the later time.

Same

(9) In this Act, words referring to the time at which a common-law partnership was entered into shall be interpreted as referring to the time at which the common-law partners who are the members of the partnership began cohabiting in a conjugal relationship or, in the case of persons described in clause (b) of the definition of "common-law partner" in subsection (1), the time at which they became parents of the same child.

87. (1) Paragraph 6 of section 2 of the Act is amended by striking out "the planholder's spouse, if the planholder is married" and substituting "the planholder's spouse or common-law partner, if the planholder is married or is in a common-law partnership".

(2) Paragraphs 9 and 10 of section 2 of the Act are repealed and the following substituted:

9.In the case of a plan entered into by the planholder and a depositary before January 1, 1989, no spouse or common-law partner of the planholder with whom the planholder resides, or from whom the planholder lives separate and apart for reasons other than the breakdown of the marriage or common-law partnership, has ever owned at any time an eligible home anywhere in the world.

10.In the case of a plan entered into by the planholder and a depositary after the December 31, 1988, no spouse or common-law partner of the planholder with whom the planholder resides, or from whom the planholder lives separate and apart for reasons other than the breakdown of the marriage or common-law partnership, has ever owned an eligible home anywhere in the world at any time during the marriage or common-law partnership.

(3) Paragraph 18 of section 2 of the Act is amended by striking out "the planholder's spouse" and substituting "the planholder's spouse or common-law partner".

88. (1) Clause 3 (3) (b) of the Act is repealed and the following substituted:

(b)the contribution is made at a time when the planholder or a spouse or common-law partner of the planholder with whom the planholder resides, or from whom the planholder lives separate and apart for reasons other than the breakdown of the marriage or common-law partnership, is the owner of an eligible home or is a partner in a partnership that owns property that would be an eligible home of the partner if the property was owned by the partner.

(2) Clause 3 (3) (d) of the Act is repealed and the following substituted:

(d)the spouse or common-law partner of the planholder with whom the planholder resides, or from whom the planholder lives separate and apart for reasons other than the breakdown of the marriage or common-law partnership, owns or owned at any time an eligible home unless,

(i)in the case of a contribution made to a plan before January 1, 1989, the contribution was made to the plan before the planholder married the spouse or entered into a common-law partnership with the common-law partner and either,

(A)the spouse or common-law partner owned no interest in an eligible home at the time the marriage or common-law partnership was entered into and the only interest in an eligible home the spouse or common-law partner may have acquired after the marriage or common-law partnership was entered into was an interest in an eligible home in respect of which the assets of the planholder's plan were released under section 5, or

(B)the marriage occurred or common-law partnership was entered into after the date on which the planholder acquired an interest in an eligible home in respect of which the assets of the planholder's plan were released under section 5, or

(ii)in the case of a contribution made to a plan after December 31, 1988, the spouse or common-law partner has not owned, at any time during the marriage to or common-law partnership with the planholder, an interest in an eligible home, other than an interest in an eligible home acquired during the marriage or common-law partnership in respect of which the assets of the planholder's plan were released under section 5; or

. . . . .

89. (1) Clause 5 (4) (c) of the Act is repealed and the following substituted:

(c)the eligible home is acquired as the principal residence of the planholder to be ordinarily inhabited by the planholder or by the planholder's spouse or common-law partner or an individual who was the planholder's spouse or common-law partner at the time of acquisition by the planholder of the eligible home, or by both of them, for a period of at least 30 consecutive days within two years of the first day of ownership by the planholder.

(2) Clauses 5 (6) (d) and (e) of the Act are repealed and the following substituted:

(d)the planholder or the spouse or common-law partner of the planholder with whom the planholder resides, or from whom the planholder lives separate and apart for reasons other than the breakdown of the marriage or common-law partnership, has acquired, after the planholder has entered into an Ontario home ownership savings plan, an ownership interest in an eligible home by gift from the owner or the interest or by reason of the death of the owner of the interest; or

(e) the planholder, after having entered into an Ontario home ownership savings plan, has married a person who had an ownership interest in an eligible home at the time of the marriage or has entered into a common-law partnership with a person who had an ownership interest in an eligible home at the time the common-law partnership was entered into.

90. (1) Subsection 7 (1) of the Act is amended by striking out "planholder's spouse if the spouse survives the planholder" at the end and substituting "planholder's spouse or common-law partner if the spouse or common-law partner survives the planholder".

(2) Clause 7 (2) (a) of the Act is amended by inserting "or common-law partner" after "spouse".

(3) Subsection 7 (3) of the Act is repealed and the following substituted:

No transfer

(3) No transfer may be made under subsection (2) unless,

(a)the spouse or common-law partner is alive at the time of the transfer to the spouse's or common-law partner's Ontario home ownership savings plan; and

(b)the spouse or common-law partner is eligible under this Act to be and is a planholder of an Ontario home ownership savings plan at the time of the transfer.

(4) Clauses 7 (4) (a) and (b) of the Act are amended by inserting "or common-law partner" after "spouse" wherever it occurs.

(5) Clause 7 (4) (d) of the Act is amended by striking out "spouse's plan" at the end and substituting "spouse's plan or common-law partner's plan".

91. (1) Clause 9 (1) (a) of the Act is amended by striking out "spouse or former spouse" and substituting "spouse or former spouse or common-law partner or former common-law partner".

(2) Subsection 9 (2) of the Act is repealed and the following substituted:

Exception

(2) No amount is payable under subsection (1) with respect to tax credits allowed to the planholder or to his or her spouse or former spouse or common-law partner or former common-law partner under the Income Tax Act in respect of qualifying contributions made by the planholder to his or her Ontario home ownership savings plan if the planholder has otherwise complied with this Act and the regulations but is terminating his or her plan for the reason that,

(a)the planholder or the spouse or common-law partner of the planholder with whom the planholder resides, or from whom the planholder lives separate and apart for reasons other than the breakdown of the marriage or common-law partnership, has acquired, after the planholder entered into the plan, an ownership interest in an eligible home by gift from the owner of the interest or by reason of the death of the owner of the interest; or

(b)the planholder, after having entered into an Ontario home ownership savings plan, has married a person who had an ownership interest in an eligible home at the time of the marriage or has entered into a common-law partnership with a person who had an ownership interest in an eligible home at the time the common-law partnership was entered into.

Commencement

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

part xiii

retail sales tax act

93. (1) Paragraph 2.2 of subsection 7 (1) of the Retail Sales Tax Act, as re-enacted by the Statutes of Ontario, 1998, chapter 5, section 45, is repealed and the following substituted:

2.2Toll free telephone services having an identity code that begins with 1-8 followed by two digits, except the telephone services that the Minister prescribes as ones that are excluded for the purposes of the exemption under this paragraph.

(2) Paragraph 44 of subsection 7 (1) of the Act is amended by striking out "a public library administered under the Public Libraries Act" and substituting "a public library established under the Public Libraries Act".

(3) Section 7 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, 1997, chapter 41, section 125, 1997, chapter 43, Schedule D, section 4, 1998, chapter 5, section 45, 1999, chapter 9, section 184 and 2000, chapter 10, section 28, is further amended by adding the following subsections:

Foreign states and diplomatic personnel

(5) The following persons and entities are exempt from tax under this Act:

1.A foreign state.

2.An international organization.

3.An individual who,

i.is not a Canadian citizen or permanent resident of Canada, as defined in the Immigration Act (Canada),

ii.is assigned to duty in Canada by the foreign state or international organization that the individual represents,

iii.is authorized by the Department of Foreign Affairs and International Trade of Canada,

iv.is not engaged locally, and

v.serves in, or is employed by, an international organization or the diplomatic mission or consular post of a foreign state.

4.A spouse, same-sex partner or family member of an individual described in paragraph 3, but only if the spouse, same-sex partner or family member is not a Canadian citizen or permanent resident of Canada, as defined in the Immigration Act (Canada), and is authorized by the Department of Foreign Affairs and International Trade of Canada.

5.A political subdivision of a foreign state, as prescribed by the Minister, and individuals, as prescribed by the Minister, employed by the government of such a political subdivision, but only on such conditions as the Minister prescribes for any of them.

6.A spouse, same-sex partner or family member of an individual described in paragraph 5, but only on such conditions as the Minister prescribes.

Exception

(5.1) Subsection (5) does not apply to exempt from tax an individual who, not being in the performance of his or her duties for the foreign state or international organization that he or she represents, purchases tangible personal property or a taxable service for the consumption or use of a person who is not entitled to an exemption under that subsection.

Definitions

(5.2) For the purposes of subsections (5) and (5.1), "

foreign state" means a foreign state that is officially recognized by Canada; ("tat tranger") "

international organization" means an international organization as defined in the Foreign Missions and International Organizations Act (Canada) but only to the extent specified in an order made under section 5 of that Act; ("organisation internationale") "

same-sex partner" means a same-sex partner as defined in section 29 of the Family Law Act\; ("partenaire de mme sexe") "

spouse" means a spouse as defined in section 29 of the Family Law Act. ("conjoint")

94. Subclauses 14 (1) (b) (i), (ii) and (iii) of the Act are repealed and the following substituted:

(i)5 per cent of the tax collected by the vendor in the period and shown in a return to be $400 or more,

(ii)$20 for each return with respect to the tax collected by the vendor in the period and shown to have been more than $20 and less than $400, and

(iii)the tax collected by the vendor in the period and shown in a return to be not more than $20.

95. Subsection 48 (3) of the Act, as amended by the Statutes of Ontario, 1993, chapter 12, section 14, 1994, chapter 13, section 25, 1996, chapter 18, section 18, 1997, chapter 10, section 34, 1997, chapter 19, section 22, 1997, chapter 43, Schedule D, section 14, 1998, chapter 5, section 47 and 1999, chapter 9, section 189, is further amended by adding the following clause:

(p)authorizing the refund to or among employers of tax paid by them in respect of payments not liable to tax that were made by them to multi-employer benefits plans and prescribing the conditions on which such refunds may be made.

Commencement

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

Same

(2) Subsection 93 (1) and section 94 shall be deemed to have come into force on July 1, 2000.

Same

(3) Subsection 93 (3) shall be deemed to have come into force on March 1, 2000.

part xiv

tobacco tax act

97. (1) The definition of "exporter" in section 1 of the Tobacco Tax Act is repealed and the following substituted: "

exporter" means, with reference to a particular date, a person who takes tobacco in bulk out of Ontario during the 12 consecutive months before that date, or causes it to be taken out of Ontario during that period, and who may be accountable for the tax on that tobacco to the jurisdiction receiving the tobacco. ("exportateur")

(2) The definition of "importer" in section 1 of the Act is repealed and the following substituted: "

importer" means, with reference to a particular date, a person who brings tobacco in bulk into Ontario during the 12 consecutive months before that date or causes it to be brought into Ontario during that period. ("importateur")

98. (1) Subsection 2 (1.1) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 10, section 42, is repealed.

(2) Section 2 of the Act, as amended by the Statutes of Ontario, 1996, chapter 18, section 19 and 1997, chapter 10, section 42, is further amended by adding the following subsections:

Tax for cigars

(1.5) Every consumer shall pay to Her Majesty in right of Ontario a tax on every cigar purchased by the consumer at the rate of 45 per cent of the taxable price of the cigar.

Fraction of a cent

(1.6) If an amount of tax calculated under subsection (1.5) is a fraction of a cent, the fraction shall be counted as a full cent.

Taxable price of cigar

(1.7) For the purposes of subsection (1.5), the taxable price of a cigar is the sum of the following amounts:

1.The price for which the cigar was purchased by its retail dealer, including the value in terms of Canadian money of any other consideration accepted by the wholesaler from whom the cigar passed as or on account of the price of the cigar.

2.The cost of, or charges for, customs and mailing, delivery or transportation, whether or not they are shown separately in the books of the wholesaler or on any invoice or in the computation of the price, or whether or not title has passed to the retail dealer before delivery to the retail dealer.

3.The amount of the tax imposed under the Excise Tax Act (Canada), other than the tax imposed by Part IX of that Act, or the duty imposed under the Excise Act (Canada) in respect of the cigar or in respect of the sale or acquisition of the cigar.

4.The amount determined by multiplying the prescribed percentage by the sum of the amounts described in paragraphs 1, 2 and 3.

Same

(1.8) Despite subsection (1.7), if the importer or manufacturer of a cigar is also the retail dealer of the cigar, the taxable price of the cigar is equal to the price that the consumer is deemed to have paid for the cigar as described in subsection (1.9).

Same

(1.9) For the purposes of subsection (1.8), the price that the consumer is deemed to have paid for the cigar is the sum of the following amounts:

1.The price for which the cigar was purchased by the consumer including the value in terms of Canadian money of any other consideration accepted as or on account of the price of the cigar by the retail dealer of the cigar.

2.The cost of, or charges for, customs and mailing, delivery or transportation, whether or not they are shown separately in the books of the retail dealer or on any invoice or in the computation of the price, or whether or not title has passed to the consumer before delivery to the consumer.

3.The amount of the tax imposed under the Excise Tax Act (Canada), other than the tax imposed by Part IX of that Act, or the duty imposed under the Excise Act (Canada) in respect of the cigar or in respect of the sale or acquisition of the cigar.

(3) Section 2 of the Act, as amended by the Statutes of Ontario, 1996, chapter 18, section 19 and 1997, chapter 10, section 42, is further amended by adding the following subsection:

Determination of taxable price of a cigar

(2.1) If the Minister considers that any of the amounts in a retail dealer's records for the matters described in paragraph 1 or 2 of subsection (1.7) or paragraph 1 or 2 of subsection (1.9) is artificially low or if the price referred to in paragraph 1 of subsection (1.7) or paragraph 1 of subsection (1.9) is below a reasonable wholesale market price, the Minister may determine the amount for the purpose of taxation under this Act and for the purpose of the applicable paragraph of subsection (1.7) or (1.9), unless it is established in an appeal under section 22 that the amount determined by the Minister is unreasonable.

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

Duty to provide invoice for cigars

2.1 (1) Every wholesaler shall inform the person to whom the wholesaler sells cigars of the quantity of cigars being sold and the tax collectable and payable on the cigars and shall deliver to the person, at the time of the purchase, an invoice containing the prescribed information.

Liability for tax

(2) Every person who purchases cigars from a wholesaler without obtaining an invoice containing the information required under subsection (1) remains liable for the tax collectable or tax payable under this Act in respect of the purchase until the tax is paid to the wholesaler or the Minister, as the case may be.

Same

(3) Subsection (2) applies whether or not the wholesaler is an agent of the Minister.

Duty of retail dealer

(4) Every retail dealer shall provide every consumer of cigars with an invoice specifying the tax payable and any other prescribed information or shall give the consumer that information by another reasonable means.

100. (1) Section 4 of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8 and 1998, chapter 5, section 49, is further amended by adding the following subsections:

Wholesalers of cigars

(1.3) The Minister may designate in writing a wholesaler who sells or delivers cigars to retail dealers to collect the tax imposed on the cigars under subsection 2 (1.5) and a person so designated shall be the agent of the Minister and shall collect and remit the tax to the Minister at the time or times and in the manner provided under this Act.

Conditions

(1.4) The Minister may impose any conditions and restrictions with respect to a designation under subsection (1.3) that the Minister considers appropriate.

(2) Subsection 4 (3) of the Act is repealed and the following substituted:

Sale to another collector

(3) Subsection (2) does not apply,

(a)to require a collector designated under subsection (1) to collect tax under this Act on the sale or delivery of tobacco by the collector to another collector designated under subsection (1) who is not a consumer in respect of the tobacco; or

(b)to require a collector designated under subsection (1) or (1.3) to collect tax under this Act on the sale or delivery of cigars by the collector to another collector designated under subsection (1.3) who is not a consumer in respect of the cigars.

(3) Subsection 4 (6) of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8, is repealed and the following substituted :

Collection of tax by registered importer

(6) Every registered importer shall collect, as agent for the Minister, the tax collectable or payable under this Act from every person to whom the importer sells or delivers tobacco in Ontario.

Duty to remit

(6.1) Every registered importer shall remit to the Minister the tax collected by the importer in accordance with subsection (6) as well as the tax, if any, in respect of which the importer is a consumer and shall do so at the times and in the manner required by this Act and the regulations.

101. (1) Subsection 5 (4) of the Act is repealed and the following substituted:

Sales to collector

(4) Subsection (3) does not apply to require a registered importer to collect tax under this Act,

(a)on the sale or delivery of tobacco by the registered importer to a collector appointed under subsection 4 (1) who is not a consumer in respect of the tobacco; or

(b)on the sale or delivery of cigars by the registered importer to a collector designated under subsection 4 (1) or (1.3) who is not a consumer in respect of the cigars.

(2) Section 5 of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8 and 1997, chapter 19, section 25, is further amended by adding the following subsection:

Penalty on unregistered importer

(11.1) Every person who operates as an importer in Ontario without holding a subsisting registration certificate required by this section shall pay a penalty, when assessed therefor, in an amount equal to the tax that would be payable under section 2 on all tobacco imported into Ontario by the person during the period when the person did not hold the subsisting registration certificate, calculated as if the tobacco had been sold to a consumer liable to pay tax in Ontario.

102. Subsection 11 (1) of the Act is amended by striking out "The Minister may refuse to designate a person under subsection 4 (1)" and substituting "The Minister may refuse to designate a person under subsection 4 (1) or (1.3)".

103. Clause 12 (2) (a) of the Act is repealed and the following substituted:

(a)every collector appointed under subsection 4 (1) in an amount equal to the average three months' tax collectable and payable by the collector calculated for the 12-month period preceding the date of the Minister's demand, or $1 million, whichever is the greater;

(a.1)every collector appointed under subsection 4 (1.3) in an amount equal to the average three months' tax collectable and payable by the collector calculated for the 12-month period preceding the date of the Minister's demand, or $10,000, whichever is the greater.

104. Subsection 13.1 (5) of the Act, as enacted by the Statutes of Ontario, 1992, chapter 28, section 1, is amended by striking out "retail selling price" and substituting "taxable price".

105. (1) The English version of subsection 14 (1) of the Act is amended by striking out "wholesale dealer" wherever it appears and substituting in each case "wholesaler".

(2) The English version of subsection 14 (2) of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8, is further amended by striking out "wholesale dealer" wherever it appears and substituting in each case "wholesaler".

106. Subsection 16 (3) of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8, is repealed and the following substituted:

Compensation to collectors, etc.

(3) For each 12-month period commencing on April 1, there may be paid to each person designated a collector under this Act and to each registered importer who is not also a person designated as a collector under this Act, as compensation for their services in collecting and remitting the tax imposed by this Act, the lesser of,

(a)$2,000; or

(b)the total of,

(i)4 per cent of the tax collected by the person in that period and shown in a return that is made in accordance with this Act and the regulations and in which the tax shown to have been collected is $75 or more,

(ii)$3 for each return with respect to tax collected by the person in that period that is made in accordance with this Act and the regulations and in which the tax shown to have been collected exceeds $3 but does not exceed $75, and

(iii)the tax collected by the person in that period and shown on a return that is made in accordance with this Act and the regulations and in which the tax shown to have been collected does not exceed $3.

Same

(3.1) A person to whom compensation may be paid under subsection (3) may deduct that compensation from the amount otherwise to be remitted to the Minister in accordance with this Act and the regulations.

107. Subsection 18 (3) of the Act is repealed and the following substituted:

Refund of tax claimed

(3) Despite subsection (1), a collector designated under subsection 4 (1) may retain the amount of a refund for which the collector has made application under this Act or the regulations until the refund for which the collector has applied is, in whole or in part, approved or refused by the Minister and until notice of the Minister's decision is sent to the collector.

108. Section 19 of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8, is further amended by adding the following subsections:

Limitation

(3.1) Subject to subsections (3.2) and (3.3), the Minister may assess or reassess any tax, interest or penalty payable under clause (1) (b) or tax payable as determined under subsection (3) within four years after the day on which the tax becomes payable.

Same

(3.2) If the Minister establishes that a person liable to pay the tax, interest or penalty under clause (1) (b) has made a misrepresentation that is attributable to neglect, carelessness or wilful default or has committed any fraud in making a return, in supplying information under this Act or in omitting to disclose information under this Act, the Minister may assess or reassess the tax, interest or penalty for which the person is liable at any time the Minister considers reasonable.

Same

(3.3) Subsections (3.1) and (3.2) do not apply in respect of a reconsideration under subsection 21 (3).

109. (1) Subsection 22 (5) of the Act is repealed and the following substituted:

Reply to notice of appeal

(5) The Minister shall, with all due dispatch, serve on the appellant and file with the court a reply to the notice of appeal admitting or denying the facts alleged and containing a statement of the allegations of fact and of the statutory provisions and reasons the Minister intends to rely on.

Same

(5.1) If the Minister does not serve the reply within 180 days after the notice under subsection (2) is served on him or her, the appellant may, upon 21 days notice to the Minister, apply to the court for an order requiring the reply to be served within such time as a judge shall order.

Same

(5.2) If the judge considers it proper in the circumstances, the judge may also order that, upon the failure of the Minister to serve the reply in the time specified by the order, the assessment or statement of disallowance with respect to which the appeal is made shall be vacated and any tax levied pursuant to the assessment shall be repaid to the appellant or the refund disallowed shall be paid to the appellant.

Same

(5.3) Nothing in this section revives an appeal that is void or affects a statement of disallowance or assessment that has become valid and binding.

(2) The English version of subsection 22 (10) of the Act is amended by striking out "notice of disallowance" and substituting "statement of disallowance".

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

Records to be kept

22.1 (1) Every collector, importer, exporter, interjurisdictional transporter, wholesaler, retail dealer or manufacturer shall keep at its principal place of business in Ontario records and books of account in the form and containing the information that will enable the accurate determination of the tax collectable and payable under this Act.

Same

(2) Every person referred to in subsection (1) shall maintain the records and books of account, as well as any other document necessary to verify the information in the records and books, for a period of seven years following the end of the person's fiscal year to which the records and books relate, unless written permission for their disposal is received from the Minister.

111. Subsection 23 (4) of the Act is repealed and the following substituted:

Demand to keep records

(4) Upon giving notice by registered letter or by demand served personally or by courier, the Minister may require any person who fails or refuses to keep adequate records and books of account to keep those records and books of account specified in the notice for the length of time required by the Minister.

112. (1) The English version of subsection 31 (1) of the Act is amended by striking out "wholesale dealer" and substituting "wholesaler".

(2) The English version of subsection 31 (2) of the Act, as re-enacted by the Statutes of Ontario, 1998, chapter 34, section 109, is amended by striking out "wholesale dealer" and substituting "wholesaler".

113. Paragraph 2 of subsection 35 (2) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 110, is amended by striking out "sold" at the end and substituting "purchased".

114. Section 38.1 of the Act, as enacted by the Statutes of Ontario, 1994, chapter 18, section 8, is repealed and the following substituted:

Refund to dealer where tax reduced

38.1 (1) Despite section 38, if a dealer who is not a collector designated under subsection 4 (1) has, as a result of a reduction in the tax payable by a consumer under section 2, remitted to the Minister an amount of money for a period that is greater than this Act requires the dealer to remit, the dealer shall apply to the dealer's collector for a refund of the amount overpaid, or to the Minister, if the Minister so requires.

Application by dealer

(2) If the application for a refund is made after the end of the month that is four months after subsection 2 (1.5) comes into force, it shall be made to the Minister and not to the dealer's collector.

Application by designated collector

(3) If the dealer referred to in subsection (1) is a collector designated under subsection 4 (1.3), the dealer shall apply to the Minister for any refund owing.

Limitation

(4) No refund shall be made unless the dealer makes an application for the refund under this section by the end of the month that is 12 months after subsection 2 (1.5) comes into force.

Same

(5) Upon proof satisfactory to the collector designated under subsection 4 (1) or (1.3) or satisfactory to the Minister that the amount was overpaid, the collector or the Minister may refund the overpayment to the dealer or, at the collector's or Minister's option, apply the amount of the overpayment to the liability of the dealer with respect to a previous or subsequent period.

Insufficient records

(6) For the purposes of a refund under subsection (1), if the dealer cannot substantiate the refund claim because of insufficient records, the Minister may estimate the amount of the refund in the manner the Minister considers expedient and refund the amount to the dealer.

Collector as agent

(7) A collector shall be deemed to act as the agent of the Minister in making a refund under subsection (1).

Recovery of refunds

(8) If a collector refunds an overpayment to a dealer or applies an overpayment to a liability of a dealer under subsection (5), the collector shall retain the amount refunded or applied from the amount for which the collector is liable to pay under this Act for the period, until the expiry of the period described in subsection (9).

Same

(9) The period referred to in subsection (8) begins on the day on which the collector's return is due under this Act for the month following the month that subsection 2 (1.5) comes into force and ends on the day on which the collector's return is due in the month that is five months after subsection 2 (1.5) comes into force.

Compensation to collectors

(10) If a collector refunds an overpayment to a dealer or applies the overpayment to a liability of the dealer under subsection (5), there may be paid to the collector in compensation for the collector's services the amount of $5 for each overpayment provided and the collector may deduct that compensation from the tax otherwise to be remitted to the Minister.

115. Clause 38.2 (3) (a) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 18, section 8, is repealed and the following substituted:

(a)an application for a refund is made to the Minister as part of the next return required to be filed by the collector following the day subsection 2 (1.5) comes into force.

116. Subsection 41 (2) of the Act, as amended by the Statutes of Ontario, 1997, chapter 19, section 25, is further amended by adding the following clauses:

(a)establishing one or more categories of cigars for the purposes of paragraph 4 of subsection 2 (1.7) and prescribing the percentage applicable to each category of cigar for the purposes of that paragraph;

(a.1)prescribing records to be kept and information to be included on invoices for the purposes of sections 2.1 and 22.1;

(a.2)prescribing alternative methods of calculating the taxable price per cigar on the sale of cigars to consumers if the wholesaler and the retail dealer of the cigars are not dealing at arm's length.

Commencement

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

Same

(2) Sections 98 and 99, subsections 100 (1) and (2), sections 101, 102, 103, 104, 107, 110, 111, 114, 115 and 116 come into force on a day to be named by proclamation of the Lieutenant Governor.

part xv

schedule, commencement

and short title

Enactment of Schedule

118. The Schedule to this Act is hereby enacted.

Commencement

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

Same

(2) Each Part of this Act comes into force as provided in the commencement section at the end of the Part.

Same

(3) The Schedule to this Act comes into force as provided in the commencement section at the end of the Schedule.

Same

(4) Where a Part or the Schedule provides that any provisions of it are to come into force on a day to be named by proclamation of the Lieutenant Governor, any such proclamation may apply to one or more of those provisions, and proclamations may be issued at different times with respect to any of those provisions.

Short title

120. The short title of this Act is the Balanced Budgets for Brighter Futures Act, 2000.

schedule

professional corporations

CONTENTS

Part I

Part II

Part III

Part IV

Part V

Part VI

Part VII

Part VIII

Part IX

Part X

Part XI

Part XII

Business Corporations Act

Certified General Accountants Association of Ontario Act, 1983

The Chartered Accountants Act, 1956

Drug and Pharmacies Regulation Act

Health Care Accessibility Act

Health Insurance Act

Law Society Act

Public Accountancy Act

Regulated Health Professions Act, 1991

Social Work and Social Service Work Act, 1998

Veterinarians Act

Commencement

Part I

Business Corporations Act

1. Subsection 3 (1) of the Business Corporations Act is repealed.

2. The Act is amended by adding the following sections:

Definitions

3.1 (1) In this section and in sections 3.2, 3.3 and 3.4, "

member" means a member of a profession governed by an Act that permits the profession to be practised through a professional corporation; ("membre") "

professional corporation" means a corporation incorporated or continued under this Act that holds a valid certificate of authorization or other authorizing document issued under an Act governing a profession. ("socit professionnelle")

Professions

(2) Where the practice of a profession is governed by an Act, a professional corporation may practise the profession if,

(a)that Act expressly permits the practice of the profession by a corporation and subject to the provisions of that Act; or

(b)the profession is governed by an Act named in Schedule 1 of the Regulated Health Professions Act, 1991, one of the following Acts or a prescribed Act:

1.Certified General Accountants Association of Ontario Act, 1983.

2.The Chartered Accountants Act, 1956.

3.Law Society Act.

4.Social Work and Social Service Work Act, 1998.

5.Veterinarians Act.

Regulations

(3) The Lieutenant Governor in Council may make regulations prescribing Acts for the purposes of clause (2) (b).

Application of Act

3.2 (1) This Act and the regulations apply with respect to a professional corporation except as otherwise set out in this section and sections 3.1, 3.3 and 3.4 and the regulations.

Conditions for professional corporations

(2) Despite any other provision of this Act, a professional corporation shall satisfy all of the following conditions:

1.All of the issued and outstanding shares of the corporation shall be legally and beneficially owned, directly or indirectly, by one or more members of the same profession.

2.All officers and directors of the corporation shall be shareholders of the corporation.

3.The name of the corporation shall include the words "Professional Corporation" or "Socit professionnelle" and shall comply with the rules respecting the names of professional corporations set out in the regulations and with the rules respecting names set out in the regulations or by-laws made under the Act governing the profession.

4.The corporation shall not have a number name.

5.The articles of incorporation of a professional corporation shall provide that the corporation may not carry on a business other than the practice of the profession but this paragraph shall not be construed to prevent the corporation from carrying on activities related to or ancillary to the practice of the profession, including the temporary investment of surplus funds earned by the corporation.

Corporate acts not invalid

(3) No act done by or on behalf of a professional corporation is invalid merely because it contravenes this Act.

Voting agreements void

(4) An agreement or proxy that vests in a person other than a shareholder of a professional corporation the right to vote the rights attached to a share of the corporation is void.

Unanimous shareholder agreements void

(5) A unanimous shareholder agreement in respect of a professional corporation is void unless each shareholder of the corporation is a member of the professional corporation.

Consequences of occurrence of certain events

3.3 (1) Despite any other Act, a professional corporation's certificate of authorization or other authorizing document remains valid and the corporation does not cease to exist despite,

(a)the death of a shareholder;

(b)the divorce of a shareholder;

(c)the bankruptcy or insolvency of the corporation;

(d)the suspension of the corporation's certificate of authorization or other authorizing document; or

(e)any other prescribed event.

Invalidity of certificate

(2) Subject to the regulations, a certificate of authorization or other authorizing document becomes invalid and the corporation ceases to exist on the revocation of the certificate.

Regulations

(3) For the purposes of subsection (1), the Lieutenant Governor in Council may make regulations,

(a)prescribing events;

(b)prescribing the manner in which shares of a shareholder are to be dealt with on the occurrence of any event mentioned in clauses (1) (a) to (e), the time within which they are to be dealt with and any other matter related to dealing with the shares.

No limit on professional liability

3.4 (1) Subsection 92 (1) shall not be construed as limiting the professional liability of a shareholder of a professional corporation under an Act governing the profession for acts of the shareholder or acts of employees or agents of the corporation.

Deemed acts

(2) For the purposes of professional liability, the acts of a professional corporation shall be deemed to be the acts of the shareholders, employees or agents of the corporation, as the case may be.

Professional liability

(3) The liability of a member for a professional liability claim is not affected by the fact that the member is practising the profession through a professional corporation.

Joint and several liability

(4) A person is jointly and severally liable with a professional corporation for all professional liability claims made against the corporation in respect of errors and omissions that were made or occurred while the person was a shareholder of the corporation.

PART ii

Certified General Accountants Association of Ontario Act, 1983

3. Section 1 of the Certified General Accountants Association of Ontario Act, 1983 is amended by adding the following clauses:

(c.1)"certificate of authorization" means a certificate of authorization issued under this Act authorizing the professional corporation named in it to practice as a certified general accountant;

(c.2)"professional corporation" means a corporation incorporated under the Business Corporations Act that holds a valid certificate of authorization under this Act.

4. Subsection 7 (1) of the Act is amended by inserting the following clause:

(c.1)regulating and governing the practice of certified general accountants through professional corporations, including, without limiting the generality of the foregoing, requiring the certification of those corporations, governing the issuance, renewal, suspension and revocation of certificates of authorization, governing the terms and conditions that may be imposed on certificates and governing the names of those corporations and the notification of a change in the shareholders of those corporations.

5. Subsection 8 (2) of the Act is amended by inserting "as well as the names of all professional corporations issued a certificate of authorization" after "in good standing".

6. The Act is amended by adding the following sections:

Professional corporations

9.1 Subject to the by-laws, a member of the Association or two or more members of the Association practising as individuals or as a partnership may establish a professional corporation for the purpose of practising as certified general accountants, and the provisions of the Business Corporations Act that apply to professional corporations within the meaning of that Act apply to such a corporation.

Notice of change of shareholder

9.2 A professional corporation shall notify the registrar within the time and in the form and manner determined under the by-laws of a change in the shareholders of the corporation.

Application of Act and by-laws

9.3 This Act and the by-laws apply to a member despite the fact that the practice of the member is carried on through a professional corporation.

Fiduciary and ethical obligations to clients

9.4 (1) The fiduciary and ethical obligations of a member to a person on whose behalf the member is practising as a certified general accountant,

(a)are not diminished by the fact that the member is practising through a professional corporation;

(b)apply equally to the corporation and to its directors, officers, shareholders, agents and employees.

Investigation

(2) If the conduct of a member practising on behalf of a professional corporation is the subject of an investigation or inquiry,

(a)any power that may be exercised under this Act in respect of the member may be exercised in respect of the corporation; and

(b)the corporation is jointly and severally liable with the member for all fines and costs the member is ordered to pay.

Restrictions apply to corporation's certificate

9.5 A term, condition, limitation or restriction imposed on the practice of a member practising as a certified general accountant through a professional corporation applies to the certificate of authorization of the corporation in relation to practice as a certified general accountant through the member.

pART iii

The Chartered Accountants Act, 1956

7. Section 1 of The Chartered Accountants Act, 1956 is amended by adding the following clauses:

(c)"professional corporation" means a corporation incorporated under the Business Corporations Act that holds a valid registration certificate under this Act;

(d)"registration certificate" means a certificate issued under this Act authorizing the professional corporation named in it to practise as a chartered accountant.

8. (1) If Bill 119 of the 1st Session, 37th Legislature (Red Tape Reduction Act, 2000) receives Royal Assent on or before the day this section comes into force, clause 3 (e) of the Act, as enacted by Bill 119, Schedule A, section 3, is amended by striking out "and firms" at the end and substituting "firms and professional corporations".

(2) If Bill 119 does not receive Royal Assent on or before the day this section comes into force, subsection (1) applies upon Bill 119 receiving Royal Assent.

(3) If Bill 119 of the 1st Session, 37th Legislature (Red Tape Reduction Act, 2000) receives Royal Assent on or before the day this section comes into force, clause 3 (f) of the Act, as enacted by Bill 119, Schedule A, section 3, is amended by adding "and professional corporations" at the end.

(4) If Bill 119 does not receive Royal Assent on or before the day this section comes into force, subsection (3) applies upon Bill 119 receiving Royal Assent.

(5) If Bill 119 of the 1st Session, 37th Legislature (Red Tape Reduction Act, 2000) receives Royal Assent on or before the day this section comes into force, clause 3 (g) of the Act, as enacted by Bill 119, Schedule A, section 3, is amended by striking out "and of firms" at the end and substituting "firms and professional corporations".

(6) If Bill 119 does not receive Royal Assent on or before the day this section comes into force, subsection (5) applies upon Bill 119 receiving Royal Assent.

9. (1) If Bill 119 of the 1st Session, 37th Legislature (Red Tape Reduction Act, 2000) receives Royal Assent on or before the day this section comes into force, subsection 8 (1) of the Act, as re-enacted by Bill 119, Schedule A, section 3, is amended by adding the following clause:

(m)to provide for and govern the practice of chartered accounting through professional corporations, including, without limiting the generality of the foregoing, requiring the certification of those corporations, governing the issuance, renewal, suspension and revocation of registration certificates, governing the terms and conditions that may be imposed on certificates and governing the names of those corporations and the notification of a change in the shareholders of those corporations.

(2) If Bill 119 does not receive Royal Assent on or before the day this section comes into force, subsection (1) applies upon Bill 119 receiving Royal Assent.

10. The Act is amended by adding the following sections:

Professional corporations

13.2 Subject to the by-laws, a member of the Institute or two or more members of the Institute practising as individuals or as a partnership may establish a professional corporation for the purpose of practising as a chartered accountant, and the provisions of the Business Corporations Act that apply to professional corporations within the meaning of that Act apply to such a corporation.

Notice of change of shareholder

13.3 A professional corporation shall notify the registrar within the time and in the form and manner determined under the by-laws of a change in the shareholders of the corporation.

Application of Act and by-laws

13.4 This Act and the by-laws of the Institute apply to a member despite the fact that the practice of the member is carried on through a professional corporation.

Fiduciary and ethical obligations to clients

13.5 (1) The fiduciary and ethical obligations of a member to a person on whose behalf the member is practising as a chartered accountant,

(a)are not diminished by the fact that the member is practising through a professional corporation;

(b)apply equally to the corporation and to its directors, officers, shareholders, agents and employees.

Investigation

(2) If the conduct of a member practising on behalf of a professional corporation is the subject of an investigation or inquiry,

(a)any power that may be exercised under this Act in respect of the member may be exercised in respect of the corporation; and

(b)the corporation is jointly and severally liable with the member for all fines and costs the member is ordered to pay.

Restrictions apply to corporation's certificate

13.6 A term, condition, limitation or restriction imposed on the practice of a member practising as a chartered accountant through a professional corporation applies to the registration certificate of the corporation in relation to the practice of chartered accounting through the member.

11. (1) If Bill 119 of the 1st Session, 37th Legislature (Red Tape Reduction Act, 2000) receives Royal Assent on or before the day this section comes into force, section 15 of the Act, as re-enacted by Bill 119, Schedule A, section 3, is repealed and the following substituted:

Register

15. The registrar of the Institute shall establish and maintain a register listing,

(a)firms as well as members and students of the Institute; and

(b)professional corporations that have been issued registration certificates under this Act.

(2) If Bill 119 does not receive Royal Assent on or before the day this section comes into force, subsection (1) applies upon Bill 119 receiving Royal Assent.

PART IV

Drug and Pharmacies

Regulation Act

12. Subsection 1 (1) of the Drug and Pharmacies Regulation Act, as amended by the Statutes of Ontario, 1991, chapter 18, section 47 and 1998, chapter 18, Schedule G, section 49, is further amended by adding the following definitions: "

certificate of authorization" has the same meaning as in the Regulated Health Professions Act, 1991\; ("certificat d'autorisation") "

health profession corporation" has the same meaning as in the Regulated Health Professions Act, 1991. ("socit professionnelle de la sant")

13. Subsection 142 (2) of the Act is repealed and the following substituted:

Same

(2) No corporation shall own or operate a pharmacy unless a majority of each class of shares of the corporation is owned by and registered in the name of pharmacists or in the name of health profession corporations each of which holds a valid certificate of authorization issued by the Ontario College of Pharmacists.

PART V

Health Care Accessibility Act

14. Subsection 2 (3) of the Health Care Accessibility Act, as enacted by the Statutes of Ontario, 1996, chapter 1, Schedule H, section 36, is repealed and the following substituted:

Hospitals

(3) A hospital shall not accept payment with respect to the provision of an insured service to an insured person unless permitted to do so by the regulations in the circumstances and on the conditions prescribed in the regulations.

Prescribed entities, etc.

(3.1) Such entities and persons or classes of persons as may be prescribed shall not accept payment with respect to the provision of an insured service to an insured person unless permitted to do so by the regulations in the circumstances and on the conditions prescribed in the regulations.

15. Section 8 of the Act, as amended by the Statutes of Ontario, 1996, chapter 1, Schedule H, section 38, is further amended by adding the following subsection:

Same

(1.1.1) An entity or person that contravenes subsection 2 (3.1) is guilty of an offence.

16. (1) Section 9 of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 1, Schedule H, section 39, is amended by adding the following clauses:

(c)prescribing circumstances and conditions for the purposes of subsection 2 (3);

(d)prescribing entities, persons, classes of persons, circumstances and conditions for the purposes of subsection 2 (3.1).

(2) Section 9 of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 1, Schedule H, section 39, is amended by adding the following subsection:

Retroactivity

(2) A regulation under subsection (1) is effective with respect to a period before it was filed if the regulation so provides.

PART VI

Health Insurance Act

17. (1) Subsection 15 (1) of the Health Insurance Act is amended by striking out "thereof directly to the physician".

(2) Subsection 15 (3) of the Act is repealed and the following substituted:

Requirements where Plan billed

(3) Where a physician submits his or her accounts directly to the Plan under this section,

(a)payment thereof shall be made,

(i)directly to the physician, or

(ii)as the physician directs in accordance with section 16.1;

(b)he or she shall not submit any account for any amount to the patient in respect of insured services or permit any account in respect of insured services to be submitted to the patient by any other person or entity from which the person receives a benefit; and

(c)the payment by the Plan for the insured services performed constitutes payment in full of the account therefor.

18. (1) Subsection 16 (1) of the Act is amended by striking out "thereof directly to the practitioner".

(2) Subsection 16 (3) of the Act is repealed and the following substituted:

Requirements where Plan billed

(3) Where a practitioner submits his or her accounts directly to the Plan under this section,

(a)payment thereof shall be made,

(i)directly to the practitioner, or

(ii)as the practitioner directs in accordance with section 16.1;

(b)he or she shall not submit any account for any amount to the patient in respect of insured services or permit any account in respect of insured services to be submitted to the patient by any other person or entity from which the person receives a benefit; and

(c)the payment by the Plan for the insured services performed constitutes payment in full of the account therefor.

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

Direction to make payments to entity

16.1 (1) A physician or a practitioner may direct that payments for services performed by the physician or practitioner and to which the physician or practitioner is lawfully entitled may be directed to such person or entity as may be prescribed and in such circumstances and on such conditions as may be prescribed, including such requirements and other matters with respect to directions as may be prescribed.

Condition

(2) A physician or a practitioner may not direct the General Manager to make payments to a person or entity if the physician or practitioner does not submit his or her accounts directly to the Plan.

Person or entity not entitled

(3) The entitlement to payment for services performed by a physician or a practitioner is that of the physician or practitioner and not that of the person or entity to which the physician or practitioner has directed that such a payment be made.

Repayment to Plan

(4) Where payment is made by the Plan to a person or entity pursuant to subsection (1), any money owing to the Plan by the physician or the practitioner may be recovered from the physician or practitioner personally.

Interpretation

(5) A reference in this Act or the regulations to a payment to a physician or a practitioner where the reference relates to a payment for services performed by the physician or practitioner shall be deemed to include a payment made to a person or entity pursuant to a direction made under this section.

Keeping and inspection of records

(6) Section 37.1 (record-keeping) applies with necessary modifications to a person or entity to whom payment is made pursuant to a direction and sections 40, 40.1 and 40.2 apply with necessary modifications to an inspection of the records to be kept.

PART VII

Law Society Act

20. Subsection 1 (1) of the Law Society Act, as amended by the Statutes of Ontario, 1991, chapter 41, section 1 and 1998, chapter 21, section 1, is further amended by adding the following definitions: "

certificate of authorization" means a certificate of authorization issued under this Act authorizing the professional corporation named in it to practise law; ("certificat d'autorisation") "

professional corporation" means a corporation incorporated under the Business Corporations Act that holds a valid certificate of authorization under this Act. ("socit professionnelle")

21. Section 27.1 of the Act, as enacted by the Statutes of Ontario, 1998, chapter 21, section 15, is amended by adding at the end "and of every name of a professional corporation registered under the by-laws and of every suspension or revocation of the corporation's certificate of authorization".

22. The Act is amended by adding the following sections:

Professional corporations

61.0.1 Subject to the by-laws, a member or two or more members practising law as individuals or as a partnership may establish a professional corporation for the purpose of practising law, and the provisions of the Business Corporations Act that apply to professional corporations within the meaning of that Act apply to such a corporation.

Register

61.0.2 (1) The Secretary shall establish and maintain a register of professional corporations that have been issued certificates of authorization.

Contents of registry

(2) The register shall contain the information set out in the by-laws.

Notice of change of shareholder

61.0.3 A professional corporation shall notify the Secretary within the time and in the form and manner determined under the by-laws of a change in the shareholders of the corporation.

Application of Act, etc.

61.0.4 (1) This Act, the regulations, the by-laws and the rules of practice and procedure apply to a member, student member and all other persons authorized to practise law despite the fact that the practice of the member, student member or other person is carried on through a professional corporation.

Exercise of powers of Society against corporation

(2) Subsections 34 (1) and (2), sections 36, 45, 46, 47, 48 and 49.2, subsection 49.3 (1) and sections 49.7 to 49.10, 49.44 to 49.52, 57 to 59 and 61 apply with necessary modifications to professional corporations as if a reference to a member in those provisions were a reference to a professional corporation, a reference to membership were a reference to a certificate of authorization, a reference to a revocation of membership were a reference to the revocation of a certificate of authorization and a reference to a restriction of manner of practice were a reference to the attachment of conditions to a certificate of authorization.

Fiduciary and ethical obligations to clients

61.0.5 (1) The fiduciary and ethical obligations of a member, student member and all other persons practising law to a person on whose behalf they are practising law,

(a)are not diminished by the fact that they are practising law through a professional corporation; and

(b)apply equally to the corporation and to its directors, officers, shareholders, agents and employees.

Investigation

(2) If the conduct of a member, student member and all other persons practising law on behalf of a professional corporation is the subject of an investigation or inquiry,

(a)any power that may be exercised under this Act in respect of the member, student member or other person may be exercised in respect of the corporation; and

(b)the corporation is jointly and severally liable with the member, student member or other person for all fines and costs that he or she is ordered to pay.

Restrictions apply to corporation's certificate

61.0.6 A term, condition, limitation or restriction imposed on the practice of a member practising law through a professional corporation applies to the corporation's certificate of authorization in relation to the practice of law through the member.

Prohibitions

61.0.7 No professional corporation shall,

(a)in the course of practising law do anything that, if done by a member, would be professional misconduct or conduct unbecoming a member;

(b)contravene any provision of this Act;

(c)practise law at any time when it is unable to satisfy the requirements for professional corporations under the Business Corporations Act and under this Act;

(d)contravene any condition attached to its certificate of authorization; or

(e)permit shares to be voted in contravention of subsection 3.2 (4) of the Business Corporations Act.

Trusteeships permitted

61.0.8 Clause 213 (2) (b) of the Loan and Trust Corporations Act does not prevent a professional corporation from acting as a trustee in respect of services normally provided by members.

References to barrister, etc.

61.0.9 A reference in any other Act or any regulation, rule or order made under any other Act to a barrister, solicitor or member shall be deemed to include a reference to a professional corporation.

23. (1) Paragraph 14 of subsection 62 (0.1) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 21, section 29, is amended by adding the following subparagraph:

iii.1professional corporations and applicants for certificates of authorization for professional corporations.

(2) Subsection 62 (0.1) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 21, section 29, is amended by adding the following paragraph:

28.1governing the practice of law through professional corporations, including, without limiting the generality of the foregoing, requiring the certification of those corporations, governing the issuance, renewal, suspension and revocation of certificates of authorization, governing the terms, conditions, limitations and restrictions that may be imposed on certificates and governing the names of those corporations and the notification of a change in the shareholders of those corporations.

PART VIII

Public Accountancy Act

24. (1) Section 1 of the Public Accountancy Act is amended by adding the following definition: "

professional corporation" means a corporation incorporated under the Business Corporations Act that holds a valid certificate of authorization under this Act. ("socit professionnelle")

(2) The definition of "public accountant" in section 1 of the Act is amended by inserting "or as a professional corporation" after "partnership".

25. Section 14 of the Act is amended by adding the following subsection:

Regulations

(4) The Council may make regulations,

(a)governing certificates of authorization to permit corporations to carry on practice as a public accountant in accordance with such conditions or restrictions as may be prescribed;

(b)prescribing the terms and conditions upon which any licensee in good standing may be permitted to incorporate and continue as its sole director and sole shareholder of a professional corporation as defined in the Business Corporations Act for the purpose of carrying on practice as a public accountant.

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

Application of Act and by-laws

14.1 This Act and the regulations apply to a person licensed under this Act despite the fact that the person practices as a public accountant through a professional corporation.

27. (1) Subsection 24 (1) of the Act is amended by inserting "or a professional corporation that does not hold a valid certificate of authorization under this Act" before "shall" at the end of the portion before clause (a).

(2) Clause 24 (1) (c) of the Act is amended by adding "or the corporation is authorized to carry on practice as a public accountant" at the end.

28. Subsection 25 (1) of the Act is amended by adding "Unless it is a professional corporation incorporated under subsection 14 (4)" at the beginning.

PART IX

Regulated Health

Professions Act, 1991

29. Subsection 1 (1) of the Regulated Health Professions Act, 1991, as amended by the Statutes of Ontario, 1998, chapter 18, Schedule G, section 1, is further amended by adding the following definitions: "

certificate of authorization" means a certificate of authorization issued under this Act or the Code; ("certificat d'autorisation") "

health profession corporation" means a corporation incorporated under the Business Corporations Act that holds a valid certificate of authorization issued under this Act or the Code. ("socit professionnelle de la sant")

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

Holding out as a health profession corporation

34.1 (1) No corporation shall hold itself out as a health profession corporation unless it holds a valid certificate of authorization.

Same

(2) No person shall hold himself or herself out as a shareholder, officer, director, agent or employee of a health profession corporation unless the corporation holds a valid certificate of authorization.

31. Section 37 of the Act is amended by adding the following subsection:

Onus of proof to show certificate of authorization

(2) A person who is charged with an offence to which holding a certificate of authorization under a health profession Act would be a defence shall be deemed, in the absence of evidence to the contrary, to have not been issued a certificate of authorization.

32. (1) Subsection 40 (2) of the Act is amended by inserting "or 34.1 (2)" after "subsection 34 (2)".

(2) Subsection 40 (3) of the Act is amended by inserting "or 34.1 (2)" after "subsection 34 (1)".

33. Subsection 43 (1) of the Act is amended by adding the following clauses:

(e)respecting health profession corporations;

(f)governing the issue, renewal, suspension, revocation and expiration of certificates of authorization;

(g)governing the names of health profession corporations.

34. Subsection 1 (1) of Schedule 2 to the Act, as amended by the Statutes of Ontario, 1998, chapter 18, Schedule G, section 10, is further amended by adding the following definitions: "

certificate of authorization" means a certificate of authorization issued under the Regulated Health Professions Act, 1991 or this Code; ("certificat d'autorisation") "

health profession corporation" means a corporation incorporated under the Business Corporations Act that holds a valid certificate issued under the Regulated Health Professions Act, 1991 or this Code. ("socit professionnelle de la sant")

35. (1) Subsection 23 (2) of Schedule 2 to the Act, as amended by the Statutes of Ontario, 1993, chapter 37, section 7 and 1998, chapter 18, Schedule G, section 13, is further amended by adding the following clauses:

(d.1)the name, business address and business telephone number of every health profession corporation;

(d.2)the name of every shareholder of a health profession corporation.

(2) Paragraph 1 of subsection 23 (3) of Schedule 2 to the Act is repealed and the following substituted:

1.Information described in clauses (2) (a), (b), (c), (d.1) and (d.2).

36. Subsection 85.5 (1) of Schedule 2 to the Act, as enacted by the Statutes of Ontario, 1993, chapter 37, section 23, is amended by inserting "a health profession corporation" after "partnership".

37. Schedule 2 to the Act, as amended by the Statutes of Ontario, 1993, chapter 37, sections 4 to 37 and 1998, chapter 18, Schedule G, sections 11 to 23, is further amended by adding the following sections:

Health Profession Corporations

Professional corporations

85.8 Subject to the regulations made under subsection 43 (1) of the Regulated Health Professions Act, 1991 and the by-laws, a member or two or more members may establish a health profession corporation for the purpose of practising a health profession, and the provisions of the Business Corporations Act that apply to professional corporations within the meaning of that Act apply to such a corporation.

Notice of change of shareholder

85.9 A health profession corporation shall notify the Registrar within the time and in the form and manner determined under the by-laws of a change in the shareholders of the corporation.

Application of Act, etc.

85.10 This Act, the regulations and the by-laws apply to a member despite the fact that the member practises a health profession through a health profession corporation.

Fiduciary and ethical obligations to patients

85.11 (1) The fiduciary and ethical obligations of a member to a person on whose behalf the member is practising a health profession,

(a)are not diminished by the fact that the member is practising through a health profession corporation; and

(b)apply equally to the corporation and to its directors, officers, shareholders, agents and employees.

Investigation

(2) If the conduct of a member practising on behalf of a health profession corporation is the subject of a complaint, a specified allegation of professional misconduct, an investigation by the Board, an investigator or assessor appointed under this Code, an inquiry of a board of inquiry or the Registrar,

(a)any power that the College may exercise in respect of the member may be exercised in respect of the corporation; and

(b)the corporation is jointly and severally liable with the member for all fines and costs the member is ordered to pay.

Duty to patient prevails

85.12 If there is a conflict between a member's duty to a patient and the member's duty to a health profession corporation as a director or officer of the corporation, the duty to the patient prevails.

Restrictions apply to corporation's certificate

85.13 A term, condition or limitation imposed on the certificate of registration of a member practising a health profession through a health profession corporation applies to the certificate of authorization of the corporation in relation to the practice of the health profession through the member.

38. Section 87 of Schedule 2 to the Act, as amended by the Statutes of Ontario, 1998, chapter 18, Schedule G, section 20, is further amended by inserting "(t.1)" after "(t)".

39. Subsection 92 (1) of Schedule 2 to the Act is amended by inserting "or a certificate of authorization" after "registration".

40. Subsection 94 (1) of Schedule 2 to the Act, as amended by the Statutes of Ontario, 1998, chapter 18, Schedule G, section 22, is further amended by adding the following clauses:

(t.1)prescribing the form and manner in which a health profession corporation shall notify the Registrar of a change in the shareholders of the corporation and the time period for doing so;

(t.2)requiring the payment of fees upon application for a certificate of authorization and for the issue or renewal of a certificate of authorization and specifying the amount of such fees.

PART X

Social Work and

Social Service Work Act, 1998

41. Section 1 of the Social Work and Social Service Work Act, 1998 is amended by adding the following definitions: "

certificate of authorization" means a certificate of authorization issued under this Act authorizing the corporation named in it to practise social work or social service work; ("certificat d'autorisation") "

professional corporation" means a corporation incorporated under the Business Corporations Act that holds a valid certificate of authorization issued under this Act. ("socit professionnelle")

42. Subsection 22 (2) of the Act is amended by adding the following clauses:

(c.1)the name of every professional corporation issued a certificate of authorization under this Act;

(c.2)a notation of every revocation or suspension of a certificate of authorization.

43. The Act is amended by adding the following sections:

Professional corporations

23.1 Subject to the by-laws, a member or two or more members practising social work or social service work as individuals or as a partnership may establish a professional corporation for the purpose of practising social work or social service work, and the provisions of the Business Corporations Act that apply to professional corporations within the meaning of that Act apply to such a corporation.

Notice of change of shareholder

23.2 A professional corporation shall notify the Registrar within the time and in the form and manner determined under the by-laws of a change in the shareholders of the corporation.

Application of Act, etc.

23.3 This Act, the regulations and the by-laws apply to a member despite the fact that the member practises social work or social service work through a professional corporation.

Fiduciary and ethical obligations to clients

23.4 (1) The fiduciary and ethical obligations of a member to a person on whose behalf the member is practising social work or social service work,

(a)are not diminished by the fact that the member is practising through a professional corporation; and

(b)apply equally to the corporation and to its directors, officers, shareholders, agents and employees.

Investigation

(2) If the conduct of a member practising on behalf of a professional corporation is the subject of an investigation or a hearing,

(a)any power that may be exercised in respect of the member may be exercised in respect of the corporation; and

(b)the corporation is jointly and severally liable with the member for all fines and costs the member is ordered to pay.

Restrictions apply to corporation's certificate

23.5 A term, condition or limitation imposed on the certificate of registration of a member practising social work or social service work through a corporation applies to the certificate of authorization of the corporation in relation to the practice of social work or social service work through the member.

44. Subsection 37 (1) of the Act is amended by adding the following paragraph:

17.1governing the practice of social work and social service work through professional corporations, including, without limiting the generality of the foregoing, requiring the certification of those corporations, governing the issuance, renewal, suspension and revocation of certificates of authorization, governing the terms, conditions or limitations that may be imposed on certificates and governing the names of those corporations and the notification of a change in the shareholders of those corporations.

PART XI

Veterinarians Act

45. Subsection 1 (1) of the Veterinarians Act, as amended by the Statutes of Ontario, 1998, chapter 18, Schedule G, section 73, is further amended by adding the following definitions: "

certificate of authorization" means a certificate of authorization issued under this Act authorizing the professional corporation named in it to engage in the practice of veterinary medicine; ("certificat d'autorisation") "

professional corporation" means a corporation incorporated under the Business Corporations Act that holds a valid certificate of authorization issued under this Act. ("socit professionnelle")

46. The Act is amended by adding the following sections:

Professional corporations

5.1 Subject to the by-laws, a member or two or more members practising veterinary medicine as individuals or as a partnership may establish a professional corporation for the purpose of practising veterinary medicine, and the provisions of the Business Corporations Act that apply to professional corporations within the meaning of that Act apply to such a corporation.

Registry

5.2 (1) The Registrar shall establish and maintain a register of professional corporations that have been issued certificates of authorization.

Contents of registry

(2) The Register shall contain the information required under the by-laws.

Notice of change of shareholder

5.3 A professional corporation shall notify the Registrar within the time and in the form and manner determined under the by-laws of a change in the shareholders of the corporation.

Application of Act, etc.

5.4 This Act, the regulations and the by-laws apply to a member despite the fact that the member practises veterinary medicine through a professional corporation.

Fiduciary and ethical obligations to clients

5.5 (1) The fiduciary and ethical obligations of a member to a person on whose behalf the member is practising veterinary medicine,

(a)are not diminished by the fact that the member is practising veterinary medicine through a professional corporation; and

(b)apply equally to the corporation and to its directors, officers, shareholders, agents and employees.

Investigation

(2) If the conduct of a member practising on behalf of a professional corporation is the subject of an investigation or inquiry,

(a)any power that may be exercised in respect of the member may be exercised in respect of the corporation; and

(b)the corporation is jointly and severally liable with the member for all fines and costs the member is ordered to pay.

Restrictions apply to corporation's certificate

5.6 A condition or limitation imposed on the licence of a member practising veterinary medicine through a professional corporation applies to the corporation's certificate of authorization in relation to the practice of veterinary medicine through the member.

47. Subsection 9 (1) of the Act is amended by adding the following paragraph:

16.1governing the practice of veterinary medicine through professional corporations, including, without limiting the generality of the foregoing, requiring the certification of those corporations, governing the issuance, renewal, suspension and revocation of certificates of authorization, governing the conditions and limitations that may be imposed on certificates and governing the names of those corporations and the notification of a change in the shareholders of those corporations.

pART XII

Commencement

Commencement

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

EXPLANATORY NOTE

The Bill implements measures contained in the 2000 Budget and makes amendments to other statutes. The major amendments made by the Bill are described below.

Part I

community small business

investment funds act

Currently, the Community Small Business Investment Funds Act allows a corporation that is registered as a labour sponsored investment fund (an "LSIF") to sell shares that are eligible for a 15 per cent tax credit to residents of Ontario.

Proposed amendments to the Act would increase the tax credit to 20 per cent for the shares of an LSIF, if the LSIF is able to demonstrate that 50 per cent of its capital available for investment is invested in companies whose research and development expenses are at least 50 per cent of their total expenses.

An amendment is also proposed to modify the rules governing the redemption of LSIF shares. In certain circumstances, shareholders would be permitted to redeem their shares up to 31 days earlier than under the current Act without incurring a penalty.

Amendments to the Act also provide that common-law partners receive the same treatment as spouses under the Act.

Part II

corporations tax act

A new section 13.5 of the Corporations Tax Act enacts the Educational Technology Tax Incentive. It provides a 15 per cent deduction for donations or price discounts given after May 2, 2000 to eligible educational institutions in respect of eligible equipment and eligible learning technology, as defined in that section.

Section 43 of the Act now provides a lower tax rate for income from manufacturing and processing. An amendment to that section makes the lower tax rate applicable to income from the generation of electrical energy for sale or from the production of steam for use in the generation of electrical energy for sale. The tax rate reduction is phased in over four years, beginning as of January 1, 1999.

The Ontario Film and Television Tax Credit under section 43.5 of the Act and the Ontario Production Services Tax Credit under section 43.10 of the Act are amended. The amendments establish a bonus for productions for which a specified minimum amount of principal photography is shot outside the Greater Toronto Area. For Ontario labour expenditures incurred after May 2, 2000, the bonus under the Ontario Film and Television Tax Credit is equal to an additional 10 per cent of Ontario labour expenditures; the bonus under the Ontario Production Services Tax Credit is equal to an additional 3 per cent of Ontario labour expenditures.

The Ontario Book Publishing Tax Credit under section 43.7 of the Act is amended. The tax credit is made available for the first three eligible literary works by an eligible Canadian author. The maximum tax credit for each eligible literary work is increased from $10,000 to $30,000. These amendments are effective for qualifying expenditures incurred after May 2, 2000.

The Ontario Interactive Digital Media Tax Credit under section 43.11 of the Act is amended. The tax credit is available for a maximum of $100,000 of eligible marketing and distribution expenditures incurred after May 2, 2000 in respect of an eligible digital media product. The definition of an eligible marketing and distribution expenditure is to be set out in the regulations.

Amendments to section 68 of the Act relate to the use of the short-form corporations tax return. Businesses are now able to use this return if they have gross revenue and total assets of $1 million or less. The amendment increases that threshold to $1.5 million, effective for taxation years ending after December 31, 2000.

Amendments to the Act also provide that common-law partners receive the same treatment as spouses under the Act.

Part III

electricity act, 1998

Currently, Part V of the Electricity Act, 1998 provides for a charge to be paid to the Financial Corporation for the purpose of retiring the residual stranded debt of the former Ontario Hydro. The charge applies to the generation and consumption of electricity. Amendments to the Act eliminate the charge on the generation of electricity and establish a new Part V.1 which governs the payment of the debt retirement charge on the consumption of electricity.

Amendments to section 88 of the Act specify that, in the circumstances set out in the Bill, certain corporations and other entities are municipal electricity utilities for the purposes of Part VI of the Act ("Special Payments").

Amendments to section 94 of the Act relate to the transfer tax payable by municipal corporations and municipal electricity utilities upon the transfer of certain types of property. An amendment provides that the transfer tax must be paid, or security for payment must be given, before a transfer takes effect.

A new section 104.1 concerns the pension plans of successor employers under the Act. The new section allows the affiliates of the successor employers to participate in those pension plans. The affiliates may reduce or suspend their contributions to the pension fund, to the extent permitted by the Pension Benefits Act, if the pension plan has a surplus or a prior year credit balance.

An amendment to section 111 provides that land transfer tax and retail sales tax are not payable on the transfer of assets from the OEFC pension plan to the successor employers' pension plans. These asset transfers are made in accordance with agreements required by section 111 of the Act.

Currently, section 138 authorizes orders to be made transferring officers, employees, assets, liabilities, rights and obligations of a specified subsidiary of the Financial Corporation. An amendment authorizes other orders to be made, orders transferring to the successor employers assets, liabilities, rights and obligations relating to the OEFC pension plan or pension fund, and to the responsibilities of the Financial Corporation under Part VII of the Act ("Pension Plans"). Such a transfer order cannot conflict with an agreement under section 111 of the Act governing the transfer of assets and liabilities between pension plans.

Part IV

employer health tax act

The Employer Health Tax Act imposes a tax based, in part, upon the amount of remuneration paid by an employer to an employee. An amendment will exclude from that remuneration, for the purposes of the Act, certain stock option benefits provided to employees in the circumstances set out in the amendment. These circumstances relate to the employer's eligible expenditures for scientific research and experimental development in Ontario.

Part V

income tax act

Amendments to sections 3 and 4 and new sections 4.0.1 and 4.0.2 of the Income Tax Act relate to the conversion of the Ontario personal income tax system from a percentage of federal tax to a percentage of taxable income for the 2000 and subsequent taxation years and provide that annual tax indexing will use the Ontario Consumer Price Index instead of the federal CPI. New sections 4.5, 4.6, 4.7 and 4.8 of the Act provide for additional taxes in special circumstances in which the comparable federal special taxes are payable.

Technical changes are made to section 7.1 of the Act, relating to the tax rebate of up to $200 in 1999 Ontario personal income taxes. A new subsection 8 (7.2) extends the 1999 property tax credit available to individuals whose residence in 1999 was in a territory without municipal organization.

Subsection 8 (8.1.1) of the Act is amended to provide an additional tax credit for investments in labour sponsored investment fund corporations that are research oriented investment funds.

Section 8 is amended and a new section 8.4.1 of the Act is enacted to provide an educational technology tax credit for donations or price discounts given to eligible educational institutions by individuals after May 2, 2000 in respect of eligible equipment and eligible learning technology.

A new Division C.1 of Part II of the Act is enacted to implement a new tax refund announced in the 2000 Ontario Budget. A new section 8.7 of the Act, when proclaimed into force, will provide a tax refund to research employees of eligible research companies. The refund reflects the tax saving from a notional deduction from taxable income for Ontario purposes of up to $100,000 of taxable stock option benefits and taxable capital gains on the sale of shares acquired from exercising the stock options. This measure applies to eligible stock option agreements entered into after this Bill receives Royal Assent.

New section 8.8 of the Act sets out rules applying to the refund under section 8.7. Amendments to sections 1, 8.6, 10, 15, 19, 22.1, 43 and 49 of the Act are required due to the enactment of the new sections. The Act is amended to provide for the equivalent treatment of spouses and common-law partners.

part vi

land transfer tax act

Currently, under the Land Transfer Tax Act, purchasers of single family residences are required to pay an additional tax under the Act of 0.5 per cent of the portion of the purchase price that exceeds $400,000. An amendment to the Act clarifies that the additional tax is not payable for a residence located on land that is eligible to be classified in the farmlands property class. If the additional tax is paid on such a residence, the taxpayer may apply for a refund.

part vii

mining tax act

Amendments to the Mining Tax Act enact an exemption that applies with respect to mines opened after May 7, 1996 that are certified by the Minister of Northern Development and Mines as remote mines. The exemption is a 120-month tax exemption or a $10 million mining profit exemption, whichever threshold is met first. Such mines are also eligible for a reduced tax rate of 5 per cent.

If a mine is reopened after being closed for at least 60 continuous months, the operator may apply (or reapply) to have the mine certified as a remote mine.

part viii

ministry of treasury

and economics act

The amendment clarifies the responsibility for financial management of organizations of the Government of Ontario.

part ix

northern ontario

heritage fund act

The amendment to the Northern Ontario Heritage Fund Act makes it possible for a director of the Northern Ontario Heritage Fund Corporation to be ordinarily resident in The District Municipality of Muskoka.

part x

northern services boards act

The amendment provides that Part II of the Northern Services Boards Act relating to area services boards applies to The District Municipality of Muskoka as well as the territorial districts already mentioned in section 35 of the Act.

part xi

ontario guaranteed

annual income act

Amendments to the Ontario Guaranteed Annual Income Act provide that common-law partners receive the same treatment as spouses under the Act.

part xii

ontario home ownership

savings plan act

Amendments to the Ontario Home Ownership Savings Plan Act provide that common-law partners receive the same treatment as spouses under the Act.

part xiii

retail sales tax act

An amendment to subsection 7 (1) of the Retail Sales Tax Act clarifies the language of the exemption for toll free numbers. It provides that any toll-free number in the 800 series is exempt from tax unless a regulation prescribes otherwise.

Proposed subsection 7 (5) of the Act provides that foreign states, specified international organizations and qualifying diplomatic personnel are exempt from tax under the Act.

Subclauses 14 (1) (b) (i), (ii) and (iii) are re-enacted to clarify the method of calculating the amount that can be paid to a vendor as compensation for collecting tax under the Act.

The amendment to subsection 48 (3) gives the Minister power to make regulations providing for refunds to employers of overpayments of tax related to multi-employer benefits plans.

part xiv

tobacco tax act

Amendments to the Tobacco Tax Act change the manner of determining the tax applicable to cigars. The taxable price of a cigar is described in subsection 2 (1.7) of the Act.

A wholesaler who sells cigars to retailers may be designated a collector of the tax paid under the Act by the consumer.

All dealers are required to maintain records, books of account and related documents for seven years after the fiscal year end to which they relate, unless the Minister gives written permission otherwise.

Wholesalers will be required to inform a person to whom they sell cigars of the amount of tax on the cigars and to deliver an invoice with prescribed information. Retail dealers will be required to tell consumers the amount of the tax payable by means of an invoice or by another reasonable method.

References in the English version of the Act to "wholesale dealer" are replaced with references to "wholesaler".

Schedule

Professional corporations

The Schedule to the Bill amends a number of statutes for the purpose of permitting certain regulated professionals to carry on their professions through a corporation. The professionals to be allowed to practise in this way include members of the regulated health professions, lawyers, certified general accountants, chartered accountants, social workers, social service workers and veterinarians. Provision is made in the Business Corporations Act to name by way of regulation other professions that may be allowed to practise through a corporation. The regulation of the practice of the individual professions by corporations is left to the by-laws and regulations under each Act but every professional corporation is required to meet the requirements set out in the amendments that the Bill makes to the Business Corporations Act. These requirements include the following:

1.All of the issued and outstanding shares of the corporation shall be legally and beneficially owned, directly or indirectly, by one or more members of the same profession.

2.All officers and directors of the corporation shall be shareholders of the corporation.

3.The name of the corporation shall include the words "Professional Corporation" and no professional corporation shall have a number name.

4.The articles of incorporation of a professional corporation shall provide that the corporation may not carry on a business other than the practice of the profession.

A professional corporation may have more than one shareholder but multi-disciplinary professional corporations are not permitted.

The Bill also makes necessary amendments to the Drug and Pharmacies Regulation Act, the Health Care Accessibility Act and the Health Insurance Act in consequence of the changes relating to the practice of the health professions.