Bill 198, Keeping the Promise for a Strong Economy Act (Budget Measures), 2002

Versions

Bill 198 2002

An Act to implement
Budget measures
and other initiatives
of the Government


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 Part XVI Part XVII Part XVIII Part XIX Part XX Part XXI Part XXII Part XXIII Part XXIV Part XXV Part XXVI Part XXVII Part XXVIII Part XXIX Schedule A Schedule B	Assessment Act Business Corporations Act Commodity Futures Act Community Small Business Investment Funds Act Compulsory Automobile Insurance Act Corporations Tax Act Education Act Electricity Act, 1998 Employer Health Tax Act Financial Administration Act Fuel Tax Act Gasoline Tax Act Highway Traffic Act and a Related Amendment Income Tax Act Insurance Act Land Transfer Tax Act Mining Tax Act and Its Predecessor Ministry of Revenue Act Ministry of Treasury and Economics Act Motor Vehicle Accident Claims Act Municipal Act, 2001 Municipal Tax Assistance Act Northern Services Boards Act Ontario Municipal Economic Infrastructure Financing Authority Act, 2002 Retail Sales Tax Act Securities Act Tax Incentive Zones Act (Pilot Projects), 2002 Tobacco Tax Act and Related Amendments Commencement and Short Title Ontario Municipal Economic Infrastructure Financing Authority Act, 2002 Tax Incentive Zones Act (Pilot Projects), 2002
______________

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

PART I
ASSESSMENT ACT

1. (1) Clause 2 (2) (d.2) of the Assessment Act, as enacted by the Statutes of Ontario, 1997, chapter 5, section 2 and amended by 1997, chapter 29, section 2, is amended by striking out "farmlands property class" in the portion before subclause (i) and substituting "farm property class".

(2) Clause 2 (2) (d.3) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 5, section 2 and amended by 1997, chapter 29, section 2, is amended by striking out "farmlands property class" in the portion before subclause (i) and substituting "farm property class".

(3) Subsection 2 (2) of the Act, as amended by the Statutes of Ontario, 1994, chapter 36, section 1, 1997, chapter 5, section 2, 1997, chapter 29, section 2, 1997, chapter 43, Schedule G, section 18, 2000, chapter 25, section 1 and 2001, chapter 23, section 1, is amended by adding the following clause:

(d.6) prescribing land to which subsection 33 (1) does not apply and the period during and circumstances in which that subsection does not apply;

(4) Section 2 of the Act, as amended by the Statutes of Ontario, 1994, chapter 36, section 1, 1997, chapter 5, section 2, 1997, chapter 29, section 2, 1997, chapter 43, Schedule G, section 18, 1998, chapter 3, section 1, 1998, chapter 33, section 1, 2000, chapter 25, section 1 and 2001, chapter 23, section 1, is amended by adding the following subsection:

General or specific

(2.0.1) A regulation made under clause (2) (d.6) may be general or specific in its application.

2. Paragraph 22 of subsection 3 (1) of the Act, as re-enacted by the Statutes of Ontario, 2000, chapter 25, section 2, is amended by striking out "for the accommodation of a person who would, but for the accommodation or improved facilities provided, require care in an institution" in the portion before subparagraph i and substituting "for the accommodation of a person who would, but for the accommodation or improved facilities provided, have to live in other premises where on-site care would be provided to the person".

3. (1) Paragraph 1 of subsection 7 (2) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 5, section 5, is repealed and the following substituted:

1. The residential property class.

(2) Paragraph 6 of subsection 7 (2) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 29, section 4, is repealed and the following substituted:

6. The farm property class.

4. Subparagraph 1 i of subsection 8 (1) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 29, section 5, is repealed and the following substituted:

i. the residential property class,

5. (1) The definition of "Current year's tax rate" in subsection 23 (9) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 3, section 4, is amended by striking out "residential/farm property class" and substituting "residential property class".

(2) Paragraph 4 of the definition of "Tax change (class)" in subsection 23 (9) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 3, section 4, is amended by striking out "residential/farm property class" wherever it appears and substituting in each case "residential property class".

6. Section 33 of the Act, as amended by the Statutes of Ontario, 1997, chapter 5, section 21, 1997, chapter 29, section 17 and 1998, chapter 3, section 7, is amended by adding the following subsection:

Exceptions

(1.1) Subsection (1) does not apply with respect to such land, during such period and in such circumstances as the Minister may prescribe.

Commencement

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

Same

(2) Subsections 1 (1) and (2) and sections 2 to 5 come into force on January 1, 2003.

Same

(3) Subsections 1 (3) and (4) and section 6 shall be deemed to have come into force on January 1, 2000.

PART II
BUSINESS CORPORATIONS ACT

8. Paragraph 5 of subsection 3.2 (2) of the Business Corporations Act, as enacted by the Statutes of Ontario, 2000, chapter 42, Schedule, section 2, is amended by striking out "including the temporary investment of surplus funds earned by the corporation" at the end and substituting "including the investment of surplus funds earned by the corporation".

Commencement

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

PART III
COMMODITY FUTURES ACT

10. (1) Subsection 55 (1) of the Commodity Futures Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 39, is amended by striking out the portion after clause (c) and substituting the following:

is guilty of an offence and on conviction is liable to a fine of not more than $5 million or to imprisonment for a term of not more than five years less a day, or to both.

(2) Subsection 55 (3) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 39, is amended by striking out "to a fine of not more than $1,000,000 or to imprisonment for a term of not more than two years, or to both" at the end and substituting "to a fine of not more than $5 million or to imprisonment for a term of not more than five years less a day, or to both".

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

Fraud and market manipulation

59.1 A person or company shall not, directly or indirectly, engage or participate in any act, practice or course of conduct relating to commodities or contracts that the person or company knows or reasonably ought to know,

(a) results in or contributes to a misleading appearance of trading activity in, or an artificial price for, a commodity or contract; or

(b) perpetrates a fraud on any person or company.

Misleading or untrue statements

59.2 A person or company shall not make a statement that the person or company knows or reasonably ought to know,

(a) in a material respect and at the time and in the light of the circumstances under which it is made, is misleading or untrue or does not state a fact that is required to be stated or that is necessary to make the statement not misleading; and

(b) significantly affects, or would reasonably be expected to have a significant effect on, the market price or value of a commodity or contract.

12. (1) Subsection 60 (1) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 41, is amended by adding the following paragraphs:

9. If a person or company has not complied with Ontario commodity futures law, an order requiring the person or company to pay an administrative penalty of not more than $1 million for each failure to comply.

10. If a person or company has not complied with Ontario commodity futures law, an order requiring the person or company to disgorge to the Commission any amounts obtained as a result of the non-compliance.

(2) Section 60 of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 41, is amended by adding the following subsection:

Disgorgement order

(2.1) A person or company is not entitled to participate in a proceeding in which an order may be made under paragraph 10 of subsection (1) solely on the basis that the person or company has a right of action against the respondent to the proceeding or the person or company may be entitled to receive any amount disgorged under the order.

13. Part XIII of the Act is amended by adding the following section:

Directors and officers

60.5 For the purposes of this Act, if a company or a person other than an individual has not complied with Ontario commodity futures law, a director or officer of the company or person who authorized, permitted or acquiesced in the non-compliance shall be deemed to also have not complied with Ontario commodity futures law, whether or not any proceeding has been commenced against the company or person under Ontario commodity futures law or any order has been made against the company or person under section 60.

14. Subsection 65 (2) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 47, is amended by adding the following clause:

(a.1) the administration and distribution of amounts disgorged under paragraph 10 of subsection 60 (1);

Commencement

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

Same

(2) Sections 10 to 14 come into force on a day to be named by proclamation of the Lieutenant Governor.

PART IV
COMMUNITY SMALL BUSINESS
INVESTMENT FUNDS ACT

16. Subsection 1 (7) of the Community Small Business Investment Funds Act is amended by striking out "subsection 97 (3.1)" and substituting "subsection 248 (1)".

17. Subclause (a) (ii) of the definition of "eligible employee" in section 3 of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 77, is amended by striking out "Employment Standards Act" and substituting "Employment Standards Act, 2000".

18. Subsection 4 (8) of the Act is amended by striking out "sections 104, 105, 108, 110 and 111 of the Labour Relations Act" and substituting "sections 110, 111, 114, 116 and 117 of the Labour Relations Act, 1995".

19. (1) Subsection 6 (4) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 4, is amended by striking out "the Minister of Economic Development, Trade and Tourism" and substituting "the Minister of Enterprise, Opportunity and Innovation".

(2) Subsection 6 (6) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 4, is amended by striking out "the Minister of Economic Development, Trade and Tourism" in the portion before clause (a) and substituting "the Minister of Enterprise, Opportunity and Innovation".

20. Subparagraph 4 i of subsection 12 (3) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 3, is amended by striking out "voting equity capital" and substituting "issued and outstanding voting shares".

21. Subsection 18 (11) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 55, is amended by striking out "in the case of an investment in an eligible business as set out in clause (f) of the definition of "eligible business" in subsection 12 (1)" and substituting "in the case of an investment in a corporation or partnership described in the portion of the definition of "eligible business" in subsection 12 (1) that follows clause (e)".

22. (1) The definition of "qualifying financial institution" in subsection 18.2 (1) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 10, is amended by striking out "deposit-taking financial institution" and substituting "deposit-taking institution".

(2) Clause (e) of the definition of "within the community" in subsection 18.2 (1) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 10 and amended by 1999, chapter 9, section 57, is amended by striking out the portion before subclause (i) and substituting the following:

(e) if the community sponsor is a university, a college, an Ontario Centre of Excellence that is an eligible research institute for the purposes of section 43.9 of the Corporations Tax Act, or a research institute affiliated with a university or hospital,

. . . . .

23. Subsection 18.3 (1) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 10, is amended by adding the following paragraph:

5.1 An Ontario Centre of Excellence that is an eligible research institute for the purposes of section 43.9 of the Corporations Tax Act.

24. Paragraph 1 of subsection 18.5 (1) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 59 and amended by 2001, chapter 23, section 14, is amended by striking out "January 1, 2003" and substituting "January 1, 2004".

25. Subsection 24.1 (3) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 62 and amended by 2001, chapter 23, section 15, is amended by striking out "January 1, 2003" in the portion before paragraph 1 and substituting "January 1, 2004".

26. (1) Subsection 25 (2.1) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 17, section 88, is amended by striking out "so long as no more than $15,000 is claimed in any taxation year" at the end and substituting "so long as no more than $4,150 is claimed as a tax credit in any taxation year".

(2) Subsection 25 (4.1) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 15 and amended by 1998, chapter 34, section 21, 1999, chapter 9, section 63 and 2001, chapter 23, section 16, is amended by striking out "January 1, 2003" and substituting "January 1, 2004".

(3) Subsection 25 (4.3) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 63 and amended by 2001, chapter 23, section 16, is amended by striking out "January 1, 2003" at the end and substituting "January 1, 2004".

(4) Clause 25 (4.9) (b) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 63 and amended by 2001, chapter 23, section 16, is amended by striking out "January 1, 2003" and substituting "January 1, 2004".

(5) Subclause 25 (7) (b) (i) of the Act, as amended by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 23, is amended by striking out "an investment corporation tax credit" and substituting "a labour sponsored investment fund corporation tax credit".

27. Subclause 26 (1) (c) (ii) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 16, is amended by striking out "the Minister of Economic Development, Trade and Tourism" and substituting "the Minister of Enterprise, Opportunity and Innovation".

28. Clause 27.1 (4) (a) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 67, is amended by striking out "or subsection 14.1 (1)" at the end.

29. Clause (b) of the definition of "employee" in subsection 44 (4) of the Act is amended by striking out "Employment Standards Act" and substituting "Employment Standards Act, 2000".

30. Part VI (sections 55 and 56) of the Act is repealed.

31. Part VII (sections 57, 58 and 59) of the Act, as amended by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 23, is repealed.

Commencement

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

Same

(2) Section 28 shall be deemed to have come into force on December 5, 2001.

PART V
COMPULSORY AUTOMOBILE
INSURANCE ACT

33. The following provisions of the Compulsory Automobile Insurance Act are amended by striking out "subsection 13 (2)" wherever it appears and substituting in each case "subsection 13 (11)":

1. Clause 2 (3) (a).

2. Clause 2 (7) (b).

3. Subsection 2 (10).

34. Section 13 of the Act and section 13.1 of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 50, are repealed and the following substituted:

Validation or transfer of permits

13. (1) No person shall apply for the issuance, validation or transfer of a permit for a motor vehicle unless the motor vehicle is insured under a contract of automobile insurance.

Ministry to be satisfied of insurance

(2) The Ministry of Transportation shall not issue, validate or transfer a permit for a motor vehicle unless it is satisfied that, at the time that the application for the issuance, validation or transfer is made, the motor vehicle is insured under a contract of automobile insurance.

Minister may require information

(3) The following persons shall, upon the request of the Minister of Transportation, give the Registrar such information as may be prescribed, including personal information, for any purpose related to this Act or any provision of the Highway Traffic Act concerning automobile insurance, subject to such conditions as may be prescribed:

1. A particular insurer.

2. Every insurer in a prescribed class of insurers.

3. A particular person.

4. Every person in a prescribed class of persons.

Collection of information on Minister's behalf

(4) The Minister of Transportation may enter into agreements authorizing one or more persons to collect and keep information provided under subsection (3) on behalf of the Registrar, and require those persons to provide the information to the Registrar.

Format of information

(5) The Minister of Transportation may require that information provided or kept under subsection (3) or (4) be in any format that the Minister considers appropriate, and be provided by any means that the Minister considers appropriate.

Verifying accuracy

(6) The Minister of Transportation may verify the accuracy of information provided or kept under subsection (3) or (4) by comparing the information with information that is collected under the authority of the Highway Traffic Act.

Use of information for other purposes

(7) Nothing in this section limits or controls the collection, use or disclosure of, or access to, any information provided to a person authorized under subsection (4), for any purpose other than one set out in this section.

Proof of insurance

(8) Despite anything in this Act or the Highway Traffic Act, the Ministry of Transportation may require a person who applies for the issuance, validation or transfer of a permit for a motor vehicle to do any or all of the following:

1. Certify in a form approved by the Superintendent that the motor vehicle is insured under a contract of automobile insurance.

2. Produce for inspection an insurance card for the motor vehicle.

3. Produce for inspection any other evidence that is satisfactory to the Ministry of Transportation that the motor vehicle is insured under a contract of automobile insurance.

Ministry of Transportation may rely on information

(9) The Ministry of Transportation, for the purpose of determining that it is satisfied under subsection (2), may rely on information obtained pursuant to this section.

No liability

(10) Where the Ministry of Transportation has relied on information obtained pursuant to this section, the Crown, the Minister of Transportation, the Ministry, the Registrar and the employees, officers and agents of the Minister or the Ministry are not liable in any action relating to the issuance, validation or transfer of a permit for a motor vehicle that arises out of that reliance or any failure or refusal to issue, validate or transfer a permit that arises out of that reliance.

Offence for false statement

(11) No person shall, in certifying under paragraph 1 of subsection (8) that a motor vehicle is insured under a contract of automobile insurance, make a statement that he or she knows or ought to know is false.

Definition

(12) In this section,

"contract of automobile insurance" means a contract of automobile insurance made with an insurer.

Possession, use, sale, etc., of false or invalid
insurance card

13.1 (1) No person shall,

(a) have a false or invalid insurance card in his or her possession that he or she knows or ought to know is false or invalid;

(b) use a false or invalid insurance card that he or she knows or ought to know is false or invalid;

(c) sell, give, deliver or distribute a false or invalid insurance card that he or she knows or ought to know is false or invalid; or

(d) produce for inspection any other evidence, that he or she knows or ought to know is false or invalid, that the motor vehicle is insured under a contract of automobile insurance.

Offence

(2) A person who contravenes this section is guilty of an offence and is liable on a first conviction to a fine of not less than $10,000 and not more than $50,000 and on a subsequent conviction to a fine of not less than $20,000 and not more than $100,000.

Definition

(3) In this section,

"contract of automobile insurance" means a contract of automobile insurance made with an insurer.

Evidence in certain prosecutions

13.2 (1) This section applies with respect to prosecutions for offences under sections 2, 13 and 13.1.

Statutory declaration

(2) A statutory declaration by a person who is identified in the declaration as an officer or employee of an insurer is admissible in evidence as proof, in the absence of evidence to the contrary, that the motor vehicle identified in the declaration was or was not insured by the insurer on the date or dates specified in the declaration.

35. (1) Clause 15 (1) (a) of the Act is repealed and the following substituted:

(a) exempting any person or class of persons or vehicle or class of vehicles from this Act or any provision of this Act, subject to such conditions as are set out in the regulations;

(2) Clause 15 (1) (c.2) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 50, is repealed and the following substituted:

(c.2) prescribing persons, classes of persons, insurers, classes of insurers, information and conditions for the purposes of subsection 13 (3).

Commencement

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

Same

(2) Sections 33 to 35 come into force on a day to be named by proclamation of the Lieutenant Governor.

PART VI
CORPORATIONS TAX ACT

37. Section 4 of the Corporations Tax Act is amended by adding the following subsections:

Same, where tax liability affected by a
tax treaty, etc.

(12) If the liability of a corporation for tax under the Income Tax Act (Canada) is determined with reference to a tax treaty, convention or agreement with another country, the corporation does not have a permanent establishment in Ontario for the purposes of this Act if it does not have such an establishment for the purposes of the tax treaty, convention or agreement.

Same

(13) Subsection (12) applies with respect to taxation years ending after June 17, 2002.

38. Clause 11 (8.1) (d) of the Act, as enacted by the Statutes of Ontario, 2001, chapter 23, section 22, and clauses 11 (8.1) (e), (f) and (g) of the Act, as enacted by 2001, chapter 8, section 19, are repealed and the following substituted:

(d) 5/12.5 multiplied by the ratio of the number of days in the taxation year that are after September 30, 2001 and before January 1, 2004 to the total number of days in the taxation year;

(e) 5/11 multiplied by the ratio of the number of days in the taxation year that are after December 31, 2003 and before January 1, 2005 to the total number of days in the taxation year;

(f) 5/9.5 multiplied by the ratio of the number of days in the taxation year that are after December 31, 2004 and before January 1, 2006 to the total number of days in the taxation year; and

(g) 5/8 multiplied by the ratio of the number of days in the taxation year that are after December 31, 2005 to the total number of days in the taxation year.

39. Clause 13.4 (2) (b) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 78, is amended by striking out "May 5, 2002" and substituting "January 1, 2006".

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

Division D.1 - Tax Incentive
for Investing in
Ontario Jobs and Opportunity Bonds

Tax incentive, Ontario Jobs and Opportunity
Bonds

37.1 (1) In this section,

"Authority" means the Ontario Municipal Economic Infrastructure Financing Authority continued by subsection 2 (1) of the Ontario Municipal Economic Infrastructure Financing Authority Act, 2002; ("Office")

"Ontario Jobs and Opportunity Bond" means a bond, debenture or other security,

(a) that is issued by the Authority and is designated by it as an Ontario Jobs and Opportunity Bond,

(b) that is issued by a subsidiary, trust, partnership or other entity established or acquired by the Authority and is designated by the Authority as an Ontario Jobs and Opportunity Bond, or

(c) that is designated by the Minister as an Ontario Jobs and Opportunity Bond. ("obligation ontarienne de financement d'emplois et de projets")

Tax incentive

(2) A corporation that owns an Ontario Jobs and Opportunity Bond at any time in a taxation year is entitled to receive a tax incentive under this section in respect of the interest received or receivable on the Bond in the taxation year.

Eligible corporation

(3) A corporation is eligible to receive a tax incentive under this section if it satisfies the prescribed conditions.

Certificate

(4) A certificate of the chair, a vice-chair, the chief executive officer or any officer of the Authority designated by its board of directors which states that an entity is a subsidiary, trust, partnership or other entity established or acquired by the Authority or that a bond, debenture or other security is an Ontario Jobs and Opportunity Bond is conclusive evidence of the facts stated.

Regulations

(5) The Minister may make regulations,

(a) prescribing the nature of the tax incentive and the manner in which it is calculated;

(b) prescribing the conditions that must be satisfied for a corporation to be eligible to receive a tax incentive under this section;

(c) prescribing circumstances in which a tax incentive must be repaid by a corporation and prescribing the rules applicable to the repayment;

(d) prescribing any other matter that the Minister considers necessary or advisable for the purposes of this section.

41. Clause 38 (2) (d) of the Act, as enacted by the Statutes of Ontario, 2001, chapter 23, section 31, and clauses 38 (2) (e), (f) and (g) of the Act, as enacted by 2001, chapter 8, section 20, are repealed and the following substituted:

(d) 12.5 per cent multiplied by the ratio of the number of days in the taxation year that are after September 30, 2001 and before January 1, 2004 to the total number of days in the taxation year;

(e) 11 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2003 and before January 1, 2005 to the total number of days in the taxation year;

(f) 9.5 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2004 and before January 1, 2006 to the total number of days in the taxation year; and

(g) 8 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2005 to the total number of days in the taxation year.

42. (1) Clauses 41 (1.1) (f), (g) and (h) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 8, section 21, are repealed and the following substituted:

(f) 7 per cent, in respect of a taxation year that ends after December 31, 2002 and before January 1, 2004;

(g) 6 per cent, in respect of a taxation year that ends after December 31, 2003 and before January 1, 2005; and

(h) 5.5 per cent, in respect of a taxation year that ends after December 31, 2004 and before January 1, 2006;

(2) Subsection 41 (1.1) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 5, section 10 and amended by 2000, chapter 10, section 4, 2001, chapter 8, section 21 and 2001, chapter 23, section 32, is amended by adding the following clause:

(i) 4 per cent, in respect of a taxation year that ends after December 31, 2005.

(3) Subsection 41 (1.4) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 23, section 32, is repealed and the following substituted:

Same, 2000 and later

(1.4) Despite clauses (1.1) (d) to (i), if the taxation year begins on or before the particular September 30 or December 31 indicated in clause (d), (e), (f), (g), (h) or (i), the change in the percentage from the percentage set out in the preceding clause to the percentage set out in the applicable clause must be prorated according to the number of days in the taxation year that are after the particular September 30 or December 31, as the case may be.

(4) Section 41 of the Act, as amended by the Statutes of Ontario, 1996, chapter 1, Schedule B, section 5, 1998, chapter 5, section 10, 2000, chapter 10, section 4, 2001, chapter 8, section 21 and 2001, chapter 23, section 32, is amended by adding the following subsections:

Specified partnership income

(6) In applying subparagraph 125 (1) (a) (ii) of the Income Tax Act (Canada) for the purposes of this section for a taxation year ending after May 1, 2000, the reference to "specified partnership income" in that subparagraph shall be read as a reference to the amount that would be determined under the definition of "specified partnership income" in subsection 125 (7) of that Act in respect of a partnership if the variable "M" in that definition were the amount equal to the lesser of,

(a) the amount determined under subsection (3.2); and

(b) the amount determined under subsection (7).

Same

(7) For the purposes of clause (6) (b), the amount is determined using the formula,

( B/365 ) × C

in which,

"B" is the amount determined under subsection (3.2), and

"C" is the total of all amounts each of which is the number of days contained in a fiscal period of the partnership ending in the year.

43. Clauses 41.1 (3) (f), (g) and (h) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 8, section 22, are repealed and the following substituted:

(f) 4.667 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2002 and before January 1, 2004 to the total number of days in the taxation year;

(g) 4 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2003 and before January 1, 2005 to the total number of days in the taxation year;

(h) 3.667 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2004 and before January 1, 2006 to the total number of days in the taxation year; and

(i) 2.667 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2005 to the total number of days in the taxation year.

44. (1) Clauses 43 (1.1) (c) and (d) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 8, section 23, and clauses 43 (1.1) (e) and (f) of the Act, as enacted by the Statutes of Ontario, 2001, chapter 8, section 23, are repealed and the following substituted:

(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, 2004 to the total number of days in the taxation year;

(d) 1 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2003 and before January 1, 2005 to the total number of days in the taxation year;

(e) 0.5 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2004 and before January 1, 2006 to the total number of days in the taxation year; and

(f) zero per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2005 to the total number of days in the taxation year.

(2) Subsection 43 (1.2) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 23, section 34, is repealed and the following substituted:

Transition, 2002 Budget

(1.2) The amount that may be deducted under subsection (1) by a corporation for a taxation year ending after September 30, 2001 may not exceed the amount that would be determined under subsection (1) for the taxation year if the reference in that subsection to "2 per cent" were read as the total of,

(a) 2 per cent multiplied by the ratio of the number of days in the taxation year that are before October 1, 2001 to the total number of days in the taxation year;

(b) 1.5 per cent multiplied by the ratio of the number of days in the taxation year that are after September 30, 2001 and before January 1, 2004 to the total number of days in the taxation year;

(c) 1 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2003 and before January 1, 2005 to the total number of days in the taxation year;

(d) 0.5 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2004 and before January 1, 2006 to the total number of days in the taxation year; and

(e) zero per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2005 to the total number of days in the taxation year.

(3) Clauses 43 (1.3) (b), (c), (d) and (e) of the Act, as enacted by the Statutes of Ontario, 2001, chapter 23, section 34, are repealed and the following substituted:

(b) 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, 2004 to the total number of days in the taxation year;

(c) 1 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2003 and before January 1, 2005 to the total number of days in the taxation year;

(d) 0.5 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2004 and before January 1, 2006 to the total number of days in the taxation year; and

(e) zero per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2005 to the total number of days in the taxation year.

(4) Paragraphs 6, 7 and 8 of clause 43 (4) (b) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 8, section 23, are repealed and the following substituted:

6. B/C × I/Z × A/0.07

7. B/C × J/Z × A/0.06

8. B/C × K/Z × A/0.055

9. B/C × L/Z × A/0.04

(5) The definition of "K" in subsection 43 (5) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 10, section 6, is repealed and the following substituted:

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

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

45. Subsection 43.1 (4) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 14, section 17, is amended by adding the following paragraph:

4. If the rules in subsection 142.7 (12) of the Income Tax Act (Canada) apply in respect of the winding up of a Canadian affiliate of an entrant bank (within the meaning of subsection 142.7 (1) of that Act) or in respect of the dissolution of a Canadian affiliate of an entrant bank under a dissolution order (within the meaning of subsection 142.7 (12) of that Act), the entrant bank shall be deemed to be the same corporation as, and a continuation of, the Canadian affiliate for the purposes of determining an amount of tax under Part II.1 that was deducted under this section or was payable by the entrant bank for a prior taxation year.

46. (1) Subsection 43.3 (3.5) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 81, is repealed and the following substituted:

Same, taxation years commencing before specified date

(3.5) The following rules apply for the purposes of subsection (3.2) for a taxation year that commenced before the day the Keeping the Promise for a Strong Economy Act (Budget Measures), 2002 received Royal Assent and ends after May 4, 1999:

1. A corporation that is required to compute its paid-up capital employed in Canada for a taxation year under Division C of Part III shall determine the amount that would be its taxable paid-up-capital for the taxation year under Part III as if it were a corporation incorporated in Canada.

2. A corporation that would be a financial institution as defined in subsection 58 (2) in a taxation year if it carried on business in Canada and had been incorporated in Canada shall determine the amount that would be its adjusted taxable paid-up capital for the taxation year under Part III as if it were a financial institution defined in subsection 58 (2).

3. A corporation that is a financial institution as defined in subsection 58 (2) and that has a permanent establishment in Canada but not in Ontario in a taxation year shall determine the amount that would be its adjusted taxable paid-up capital for the taxation year under Part III as if it had a permanent establishment in Ontario.

4. A corporation that is an insurance corporation that was not resident in Canada at any time in a taxation year shall determine the amount that would be its taxable capital employed in Canada under Part I.3 of the Income Tax Act (Canada) as if it were resident in Canada at any time during the year.

5. A corporation that has a permanent establishment in Canada but not in Ontario shall, if the corporation is not a financial institution as defined in subsection 58 (2) or an insurance corporation, determine the amount that would be its taxable paid-up capital for the taxation year under Part III as if it were a corporation incorporated in Canada and had a permanent establishment in Ontario.

(2) Section 43.3 of the Act, as enacted by the Statutes of Ontario, 1996, chapter 1, Schedule B, section 7 and amended by 1996, chapter 24, section 26, 1996, chapter 29, section 48, 1997, chapter 43, Schedule A, section 17 and 1999, chapter 9, section 81, is amended by adding the following subsection:

Same, taxation years commencing on or after
specified date

(3.6) The following rules apply for the purposes of subsection (3.2) for a taxation year that commences on or after the day the Keeping the Promise for a Strong Economy Act (Budget Measures), 2002 received Royal Assent:

1. A corporation that is required to compute its paid-up capital employed in Canada for a taxation year under Division C of Part III shall determine the amount that would be its taxable paid-up capital for the taxation year under Part III as if it were a corporation incorporated in Canada.

2. A corporation that would be a financial institution as defined in subsection 58 (2) in a taxation year if it carried on business in Canada and if it had been incorporated in Canada shall determine the amount that would be its adjusted taxable paid-up capital for the taxation year under Part III as if it were a financial institution defined in subsection 58 (2) and had a permanent establishment in Ontario.

6. A corporation that does not have a permanent establishment in Canada shall, if the corporation is not an insurance corporation or a corporation that would be a financial institution as defined in subsection 58 (2) if it carried on business in Canada and had been incorporated in Canada, determine the amount that would be its taxable paid-up capital for the taxation year under Part III as if it were a corporation incorporated in Canada and had a permanent establishment in Ontario.

7. The taxable income of a corporation incorporated outside Canada and that does not have a permanent establishment in Canada shall be determined, for the purposes of calculating the expenditure limit of the corporation under subsection 127 (10.2) of the Income Tax Act (Canada) as it applies for the purposes of subsection (3.2), in accordance with that Act as if it were subject to tax under that Act.

47. (1) Subsection 43.11 (5) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 42, is repealed and the following substituted:

Eligible labour expenditure

(5) A qualifying corporation's eligible labour expenditure for an eligible product for a taxation year is equal to the amount, if any, by which the sum of "A" and "B" exceeds "E" where,

"A" is the Ontario labour expenditure, if any, incurred by the qualifying corporation in the taxation year for the eligible product,

"B" is the amount, if any, by which "C" exceeds "D" where,

"C" is the total of all amounts, if any, each of which is the Ontario labour expenditure incurred for the eligible product by the qualifying corporation in a prior taxation year or by a qualifying predecessor corporation prior to the disposal, merger or wind-up, as the case may be, to the extent that the expenditure is incurred in the 24-month period ending immediately before the month in which the eligible product is completed, and

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

"E" is the total of all government assistance, if any, in respect of the Ontario labour expenditure for the eligible product that, at the time 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 be expected to receive, to the extent that the government assistance has not been repaid pursuant to a legal obligation to do so.

(2) The definition of "A" in subsection 43.11 (5.1) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 19, is repealed and the following substituted:

"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 or a qualifying predecessor corporation's eligible marketing and distribution expenditure incurred for the eligible product prior to the disposal, merger or wind-up, as the case may be, that was included in the determination of the corporation's tax credit under this section for a prior taxation year, and

(3) The definitions of "C" and "F" in subsection 43.11 (5.2) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 19, are repealed and the following substituted:

"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 or by a qualifying predecessor corporation prior to the disposal, merger or wind-up, as the case may be, to the extent that it 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,

. . . . .

"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 of the qualifying corporation or a qualifying predecessor corporation.

(4) Subsection 43.11 (12) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 42, is amended by striking out "or" at the end of clause (b), by adding "or" at the end of clause (c) and by adding the following clause:

(d) if, in determining the amount of its tax credit under this section for a taxation year, the corporation claims another corporation as a qualifying predecessor corporation in respect of an eligible product and the other corporation is not a qualifying predecessor corporation of the corporation before the eligible product becomes the property of, or is disposed of to, the corporation.

(5) Subsection 43.11 (14.1) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 19, is amended by striking out "as it reads" and substituting "as it is deemed to have read".

(6) Clause (a) of the definition of "qualifying corporation" in subsection 43.11 (15) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 42, is repealed and the following substituted:

(a) that satisfies one of the conditions set out in subsection (16),

(7) Subsection 43.11 (15) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 42 and amended by 2000, chapter 42, section 19, is amended by adding the following definition:

"qualifying predecessor corporation" means, in respect of a qualifying corporation (the "transferee"), a corporation that was a qualifying corporation in respect of an eligible product and that,

(a) disposes of the eligible product to the transferee in accordance with subsection 85 (1) of the Income Tax Act (Canada) if, at the time of the disposition,

(i) the corporation owns all of the issued and outstanding shares of the transferee,

(ii) the transferee owns all of the issued and outstanding shares of the corporation, or

(iii) all of the issued and outstanding shares of the corporation and the transferee are directly or indirectly owned by the same person,

(b) merges with one or more corporations in accordance with section 87 of the Income Tax Act (Canada) to form the transferee, or

(c) is wound up in accordance with subsection 88 (1) of the Income Tax Act (Canada). ("corporation remplacée admissible")

(8) Section 43.11 of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 42 and amended by 2000, chapter 42, section 19, is amended by adding the following subsections:

Conditions for qualifying corporations

(16) The following are the conditions referred to in clause (a) of the definition of "qualifying corporation" in subsection (15):

1. The corporation commences development of an eligible product at a permanent establishment in Ontario operated by the corporation, but does not complete development of the product before it is transferred to or otherwise becomes the property of another corporation in circumstances described in clause (a), (b) or (c) of the definition of "qualifying predecessor corporation" in subsection (15).

2. The corporation completes, at a permanent establishment in Ontario operated by the corporation, the development of an eligible product received from a qualifying predecessor corporation.

3. The corporation develops an eligible product at a permanent establishment in Ontario operated by the corporation.

Ceasing to be a qualifying corporation

(17) Despite paragraph 1 of subsection (16), a qualifying predecessor corporation ceases to be a qualifying corporation with respect to an eligible product immediately after the eligible product becomes the property of, or has been disposed of to, the other corporation.

48. Clauses 51 (4.1) (d), (e) and (f) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 8, section 25, are repealed and the following substituted:

(d) 7 per cent multiplied by the ratio of the number of days in the taxation year after December 31, 2002 and before January 1, 2004 to the total number of days in the taxation year;

(e) 6 per cent multiplied by the ratio of the number of days in the taxation year after December 31, 2003 and before January 1, 2005 to the total number of days in the taxation year;

(f) 5.5 per cent multiplied by the ratio of the number of days in the taxation year after December 31, 2004 and before January 1, 2006 to the total number of days in the taxation year;

(g) 4 per cent multiplied by the ratio of the number of days in the taxation year after December 31, 2005 to the total number of days in the taxation year.

49. Section 57.5 of the Act, as enacted by the Statutes of Ontario, 1994, chapter 14, section 21, is amended by adding the following subsection:

Winding-up or dissolution of a Canadian affiliate of
an entrant bank

(10) If the rules in subsection 142.7 (12) of the Income Tax Act (Canada) apply in respect of the winding-up of a Canadian affiliate of an entrant bank (within the meaning of subsection 142.7 (1) of that Act) or in respect of the dissolution of a Canadian affiliate of an entrant bank under a dissolution order (within the meaning of subsection 142.7 (12) of that Act), the entrant bank shall be deemed to be the same corporation as, and a continuation of, the Canadian affiliate for the purposes of determining the amount of the following losses of the entrant bank:

1. The pre-1994 loss.

2. The pre-1994 loss that was deducted or is deemed to have been deducted under this Part for a prior taxation year.

3. Eligible losses for a taxation year after the winding-up or dissolution.

4. Eligible losses for a taxation year that were deducted or are deemed to have been deducted under this Part for a prior taxation year.

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

Election on disposition of property to
an entrant bank

57.9.1 (1) In this section,

"Canadian affiliate" has the same meaning as in subsection 142.7 (1) of the Income Tax Act (Canada); ("filiale canadienne")

"entrant bank" has the same meaning as in subsection 142.7 (1) of the Income Tax Act (Canada). ("banque entrante")

Joint election

(2) If during a taxation year a Canadian affiliate has disposed of property to an entrant bank and both corporations have jointly elected under subsection 142.7 (3) of the Income Tax Act (Canada) to have the rules in that subsection apply, the Canadian affiliate and the entrant bank may jointly elect in the form approved by the Minister to have the rules prescribed by regulation apply for the purposes of this Part.

Application

(3) This section applies in respect of dispositions made after June 27, 1999.

Time of election

(4) An election under subsection (2) must be made on or before the day that is the later of,

(a) the date that is prescribed for the purposes of this subsection; and

(b) the earliest of the days on or before which the Canadian affiliate or the entrant bank is required to file a return under this Act for the taxation year in which the disposition occurred.

Exception

(5) If neither the Canadian affiliate nor the entrant bank is liable to pay tax under this Part for the taxation year in which the disposition occurred, the election may be made on or before the day that is the later of,

(a) the date that is prescribed for the purposes of this subsection; and

(b) the earliest of the days on or before which the entrant bank or Canadian affiliate is required to file a return under this Act for the first taxation year ending after the disposition for which the entrant bank or Canadian affiliate is liable to pay tax under this Part.

51. Subsection 66.1 (4.5) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 36 and amended by 1999, chapter 9, section 88, is amended by striking out "an investment made before January 1, 2002" and substituting "an investment made before January 1, 2004".

52. (1) Subsection 69 (2) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 91 and amended by 2001, chapter 23, section 45, is amended by striking out "except as provided in subsections (4) and 68 (1) and section 71" in the portion before paragraph 1 and substituting "except as provided in subsection 68 (1) and section 71".

(2) Paragraph 2 of subsection 69 (2) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 91, is repealed and the following substituted:

2. The amount, if any, determined using the formula,

A × (B - C)

in which the variables "A" and "B" represent the amounts described in paragraphs 3 and 4, respectively, and the variable "C" represents the amount described in paragraph 5 or 5.1.

(3) Paragraph 2 of subsection 69 (2) of the Act, as re-enacted by subsection (2), is amended by adding at the end "or the amount determined in accordance with subsection (2.1)".

(4) Paragraph 4 of subsection 69 (2) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 91, is repealed and the following substituted:

4. For the purposes of paragraph 2, the variable "B" is the amount calculated using the formula,

[(0.003 × D) × E/F] + [(0.003 × DD) × EE/F]

in which,

"D" is the corporation's taxable paid-up capital for the taxation year,

"DD" is the corporation's taxable paid up capital or taxable paid-up capital employed in Canada, as the case may be, for the taxation year,

"E" is the number of days in the taxation year that are after May 4, 1999 and before October 1, 2001,

"EE" is the number of days in the taxation year that are after September 30, 2001, and

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

(5) Paragraph 5 of subsection 69 (2) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 91 and amended by 2001, chapter 23, section 45, is repealed and the following substituted:

5. For the purposes of paragraph 2, the variable "C" for a taxation year that ends before October 1, 2001 is the amount calculated using the formula,

G × D/H

in which,

"D" is the corporation's taxable paid-up capital for the taxation year,

"G" is the sum of the amounts described in paragraphs 6 to 8, and

"H" is the sum of the corporation's taxable paid-up capital for the taxation year and the taxable paid-up capital of each corporation, if any, with which it is associated, for the last taxation year of the associated corporation ending during the corporation's taxation year.

5.1 For the purposes of paragraph 2, the variable "C" for a taxation year that ends after September 30, 2001 is the amount calculated using the formula,

GG × DD/HH

in which,

"DD" is the corporation's taxable paid-up capital or taxable paid-up capital employed in Canada, as the case may be, for the taxation year,

"GG" is the sum of the amounts described in paragraphs 7 to 9, and

"HH" is the sum of,

i. the corporation's taxable paid-up capital or taxable paid-up capital employed in Canada, as the case may be, for the taxation year, and

ii. the taxable paid-up capital or taxable paid-up capital employed in Canada, as the case may be, of each corporation, if any, that has a permanent establishment in Canada and with which the corporation is associated, for the last taxation year of the associated corporation ending during the corporation's taxation year.

(6) Paragraph 7 of subsection 69 (2) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 91, is amended by striking out the portion before the formula and substituting the following:

7. For the purposes of the variable "G" in paragraph 5 and the variable "GG" in paragraph 5.1, the applicable amount under this paragraph is calculated using the formula,

. . . . .

(7) Paragraph 8 of subsection 69 (2) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 91 and amended by 2001, chapter 23, section 45, is amended by striking out the portion before the formula and substituting the following:

8. For the purposes of the variable "G" in paragraph 5 and the variable "GG" in paragraph 5.1, the applicable amount under this paragraph is calculated using the formula,

. . . . .

(8) Paragraph 9 of subsection 69 (2) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 23, section 45, is repealed and the following substituted:

9. For the purposes of the variable "GG" in paragraph 5.1, the applicable amount under this paragraph is calculated using the formula,

(0.003 × Q) × R/F

in which,

"F" is the number of days in the taxation year,

"Q" is the lesser of,

i. $5 million, and

ii. the corporation's taxable paid-up capital or taxable paid-up capital employed in Canada, as the case may be, for the taxation year or, if the corporation is associated with one or more corporations in the taxation year that have a permanent establishment in Canada, the total of the taxable paid-up capital or taxable paid-up capital employed in Canada, as the case may be, of the corporation for the taxation year and of each such associated corporation for the last taxation year of the associated corporation ending during the corporation's taxation year, and

"R" is the number of days in the taxation year that are after September 30, 2001.

(9) Section 69 of the Act, as amended by the Statutes of Ontario, 1999, chapter 9, section 91 and 2001, chapter 23, section 45, is amended by adding the following subsections:

Election for group of associated corporations

(2.1) A corporation and each corporation with which it is associated in a taxation year and that has a permanent establishment in Canada in the taxation year (the "associated group") may elect to calculate the amount of the variable "C" in paragraph 2 of subsection (2) for taxation years ending after December 31, 2002 using the formula,

S/A

in which,

"A" is the corporation's Ontario allocation factor for the taxation year, as defined in subsection 12 (1), and

"S" is the corporation's portion, for the taxation year, of the associated group's net deduction for the calendar year in which the taxation year ends, as determined in accordance with subsection (2.6) or (2.7), as the case may be.

Same

(2.2) The associated group may make the election under subsection (2.1) if all of the corporations in the associated group enter into a written allocation agreement and if the following conditions are satisfied:

1. The allocation agreement must allocate among the corporations in the associated group the amount of the associated group's net deduction for the calendar year in which the corporations' taxation years end.

2. The amount of the associated group's net deduction for that calendar year must be determined in accordance with subsection (2.3).

3. The total of all amounts allocated to each corporation under the agreement must not exceed the associated group's net deduction for that calendar year.

4. For the taxation year that ends in the calendar year to which the allocation agreement applies, each corporation in the associated group is required to determine its tax payable under this Part in accordance with the allocation agreement.

5. A copy of the allocation agreement must be delivered to the Minister with the corporation's tax return for the taxation year in which an amount is claimed under subsection (2.1).

Associated group's net deduction

(2.3) The associated group's net deduction for a calendar year is the sum of the net deductions of each corporation in the associated group for the last taxation year of each corporation ending in the calendar year, as determined under subsection (2.4).

Net deduction of a corporation in the associated
group

(2.4) The net deduction of a corporation for a taxation year is the amount calculated using the formula,

A × ($15,000 × T/X)

in which,

"A" is the corporation's Ontario allocation factor, as defined in subsection 12 (1), for the last taxation year ending in the calendar year preceding the calendar year in which the taxation year ends,

"T" is amount of the total assets of the corporation as recorded in its books and records for the last taxation year ending in the calendar year preceding the calendar year in which the taxation year ends, and

"X" is the sum of the total assets of each corporation in the associated group as recorded in their books and records for the last taxation year ending in the calendar year preceding the calendar year in which the taxation year ends.

Same

(2.5) For the purposes of the definitions of "T" and "X" in subsection (2.4), if a corporation is incorporated under the laws of a jurisdiction outside Canada, its total assets in Canada shall be deemed to constitute its total assets.

Corporation's portion of net deduction

(2.6) If the associated group makes the election under subsection (2.1) and if the conditions described in subsection (2.2) are satisfied, the corporation's portion, for the taxation year, of the associated group's net deduction for the calendar year in which the taxation years ends is the amount determined in accordance with the written allocation agreement.

Same, conditions not satisfied

(2.7) If the associated group purports to make the election under subsection (2.1) but the conditions described in subsection (2.2) are not satisfied, the corporation's portion, for the taxation year, of the associated group's net deduction for the calendar year in which the taxation year ends is the amount, if any, that the Minister considers to be reasonable in the circumstances.

(10) Subsection 69 (3) of the Act is repealed and the following substituted:

Interpretation

(3) For the purposes of this section, the taxable paid-up capital or the taxable paid-up capital employed in Canada of a corporation that has no permanent establishment in Ontario shall be determined in accordance with Division B or C of this Part as if the corporation had a permanent establishment in Ontario, whether or not the corporation is subject to tax under this Act.

(11) Subsection 69 (4) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 91 and amended by 2001, chapter 23, section 45, is repealed and the following substituted:

Financial institutions and exempt corporations

(4) For the purposes of this section, the taxable paid-up capital, the taxable paid-up capital employed in Canada and the total assets of a corporation do not include the taxable paid-up capital, the taxable paid-up capital employed in Canada or the total assets of a corporation that is a financial institution or of a corporation that is exempt from tax under this Part.

53. (1) Paragraph 1 of subsection 79 (3.2) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 29, section 61, is amended by adding "or (2)" after "subsection 76 (1)".

(2) Subsection 79 (7) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 14, section 37 and amended by 1996, chapter 29, section 61, is amended by adding "or (2)" after "subsection 76 (1)" in the portion before clause (a).

54. Subclause 80 (28) (a) (ii) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 29, section 62, is repealed and the following substituted:

(ii) a determination or redetermination of a loss or any other written notice of a change in a loss,

(ii.1) a written notice that no tax is payable,

55. (1) Subsection 92 (2) of the Act is amended by striking out the portion after clause (c).

(2) Section 92 of the Act is amended by adding the following subsection:

Reassessment

(2.1) If necessary, the Minister shall reassess the corporation in accordance with the decision referred to in clause (2) (a), the final disposition referred to in clause (2) (b) or the minutes of settlement referred to in clause (2) (c), as the case may be, and shall also change the tax payable by the corporation under Part II.1, III or IV to the extent that the change can reasonably be considered to relate to the reassessment.

(3) Clause 92 (3) (a) of the Act is repealed and the following substituted:

(a) to a reassessment referred to in subsection (2.1) of tax payable under Part II; and

(4) Subsection 92 (4) of the Act is amended by striking out "subsection (2)" and substituting "subsection (2.1)".

Commencement

56. (1) Subject to subsections (2) to (11), this Part comes into force on the day this Act receives Royal Assent.

Same

(2) Section 39 shall be deemed to have come into force on May 5, 2002.

Same

(3) Section 40 comes into force on a day to be named by proclamation of the Lieutenant Governor.

Same

(4) Subsections 42 (4) and 47 (5) shall be deemed to have come into force on May 2, 2000.

Same

(5) Sections 45, 49 and 50 shall be deemed to have come into force on June 28, 1999.

Same

(6) Subsection 46 (1) shall be deemed to have come into force on May 5, 1999.

Same

(7) Subsections 47 (1), (4), (6), (7) and (8) shall be deemed to have come into force on July 1, 1998.

Same

(8) Subsections 47 (2) and (3) shall be deemed to have come into force on May 3, 2000.

Same

(9) Subsections 52 (1), (2), (4), (5), (6), (7), (8), (10) and (11) shall be deemed to have come into force on October 1, 2001.

Same

(10) Subsections 52 (3) and (9) come into force on January 1, 2003.

Same

(11) Section 54 shall be deemed to have come into force on October 30, 2002.

PART VII
EDUCATION ACT

57. Clause (a) of the definition of "residential property" in section 257.5 of the Education Act, as enacted by the Statutes of Ontario, 1997, chapter 31, section 113, is amended by striking out "the residential/farm property class, the farmlands property class" and substituting "the residential property class, the farm property class".

58. (1) Subsection 257.12 (4) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 31, section 113, is amended by striking out "residential/farm property class" and substituting "residential property class".

(2) Subsection 257.12 (5) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 31, section 113, is amended,

(a) by striking out "farmlands property class" and substituting "farm property class"; and

(b) by striking out "residential/farm property class" and substituting "residential property class".

(3) Subsection 257.12 (6) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 31, section 113, is amended by striking out "residential/farm property class" and substituting "residential property class".

59. (1) Subsection 257.25 (3) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 31, section 113, is amended by striking out "residential/farm property class" and substituting "residential property class".

(2) The definition of "school purpose tax ratio" in subsection 257.25 (4) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 31, section 113, is amended by striking out "residential/farm property class" and substituting "residential property class".

Commencement

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

Same

(2) Sections 57 to 59 come into force on January 1, 2003.

PART VIII
ELECTRICITY ACT, 1998

61. Section 85.15 of the Electricity Act, 1998, as enacted by the Statutes of Ontario, 2000, chapter 42, section 27, is amended by adding the following subsection:

Refund by the Financial Corporation

(7.1) The Minister of Finance may authorize the Financial Corporation to make a refund under subsection (1) to a person if the Minister is satisfied that the amount to be refunded was wrongly paid and that it has not been refunded by a collector.

62. Section 85.16 of the Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 27, is amended by adding the following subsection:

Refund by the Financial Corporation

(3) The Financial Corporation shall refund the amount described in subsection (1) to the person described in that subsection.

63. (1) Paragraph 1 of subsection 94 (3) of the Act, as re-enacted by the Statutes of Ontario, 2000, chapter 42, section 36, is amended by striking out "before the date of the transfer" and substituting "up to and including the date of the transfer".

(2) Paragraph 2 of subsection 94 (3) of the Act, as re-enacted by the Statutes of Ontario, 2000, chapter 42, section 36, is amended by striking out "before the date of the transfer" and substituting "up to and including the date of the transfer".

(3) Paragraph 1 of subsection 94 (4) of the Act, as re-enacted by the Statutes of Ontario, 2000, chapter 42, section 36, is amended by striking out "before the date of the transfer" and substituting "up to and including the date of the transfer".

(4) Paragraph 2 of subsection 94 (4) of the Act, as re-enacted by the Statutes of Ontario, 2000, chapter 42, section 36, is amended by striking out "before the date of the transfer" and substituting "up to and including the date of the transfer".

(5) The definition of "A" in subsection 94 (6.1) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 36, is repealed and the following substituted:

"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 up to and including 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 up to and including the date of the transfer or in respect of a previous taxation year,

Commencement

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

Same

(2) Sections 61 and 62 shall be deemed to have come into force on May 1, 2002.

Same

(3) Section 63 shall be deemed to have come into force on December 21, 2000.

PART IX
EMPLOYER HEALTH TAX ACT

65. Section 1 of the Employer Health Tax Act, as amended by the Statutes of Ontario, 1994, chapter 8, section 1, 1994, chapter 17, section 57, 1996, chapter 18, section 4, 1996, chapter 24, section 1, 1998, chapter 34, sections 58 and 59, 1999, chapter 9, section 106 and 2001, chapter 23, section 71, is amended by adding the following subsection:

Reporting for work at a permanent establishment

(3.1) For the purposes of this Act, an employee is considered to report for work at a permanent establishment of an employer,

(a) if the employee comes to the permanent establishment in person to work; or

(b) if, although the employee does not come to the permanent establishment in person to work, he or she may reasonably be regarded as attached to the permanent establishment.

66. Section 7 of the Act, as amended by the Statutes of Ontario, 1994, chapter 8, section 7, 1996, chapter 29, section 6 and 2001, chapter 23, section 76, is amended by adding the following subsections:

Same

(1.2) If an employer,

(a) was formed in a year as a result of an amalgamation under section 87 of the Income Tax Act (Canada);

(b) was formed and acquired property in the year as a result of a qualifying exchange under section 132.2 of the Income Tax Act (Canada); or

(c) was formed and acquired in the year all or substantially all of the property of a transferor in a transfer to which subsection 85 (1) or (2) or 97 (2) of the Income Tax Act (Canada) applies,

the total Ontario remuneration paid by the employer for the year shall be determined, for the purposes of subsection (1.1), by multiplying the total Ontario remuneration paid by the employer for the year by the ratio of 365 to the number of days in the year.

Same

(1.3) Subsection (1.1) does not apply to the following employers for a particular year if the condition specified with respect to the employer is satisfied:

1. An employer that was formed in the year as a result of an amalgamation under section 87 of the Income Tax Act (Canada), if the total Ontario remuneration for the prior year of at least one of the predecessor corporations that amalgamated to form the employer in that year was more than $600,000.

2. An employer that acquired property in the year in the course of a winding-up to which subsection 88 (1) or (2) of the Income Tax Act (Canada) applies, if the total Ontario remuneration for the prior year of the corporation that transferred the property to the employer in the year in the course of the winding-up was more than $600,000.

3. An employer that acquired property in the year as a result of a qualifying exchange under section 132.2 of the Income Tax Act (Canada), if the total Ontario remuneration for the prior year of the corporation or trust that disposed of the property to the employer in the year was more than $600,000.

4. An employer that acquired in the year all or substantially all of the property of a transferor in a transfer to which subsection 85 (1) or (2) or 97 (2) of the Income Tax Act (Canada) applies, if the total Ontario remuneration for the prior year of the transferor was more than $600,000.

67. Section 30 of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 8, section 28 and amended by 1994, chapter 8, section 29, 1996, chapter 29, section 7 and 2001, chapter 23, section 84, is amended by adding the following subsections:

Same

(2.2) If an employer,

(a) was formed in a year as a result of an amalgamation under section 87 of the Income Tax Act (Canada);

(b) was formed and acquired property in the year as a result of a qualifying exchange under section 132.2 of the Income Tax Act (Canada); or

(c) was formed and acquired in the year all or substantially all of the property of a transferor in a transfer to which subsection 85 (1) or (2) or 97 (2) of the Income Tax Act (Canada) applies,

the total Ontario remuneration paid by the employer for the year shall be determined, for the purposes of subsection (2.1), by multiplying the total Ontario remuneration paid by the employer for the year by the ratio of 365 to the number of days in the year.

Same

(2.3) Subsection (2.1) does not apply to the following employers for a particular year if the condition specified with respect to the employer is satisfied:

Commencement

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

Same

(2) Section 65 comes into force on January 1, 2003.

Same

(3) Sections 66 and 67 shall be deemed to have come into force on January 1, 2000.

PART X
FINANCIAL ADMINISTRATION ACT

69. (1) Subsection 5 (2) of the Financial Administration Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 62, is repealed and the following substituted:

Deletion from the accounts

(2) The Lieutenant Governor in Council may delete from the accounts of the Government of Ontario any obligation, debt or claim that is the subject of a settlement or determination described in subsection (1) if the Minister of Finance recommends the deletion as being in the public interest.

(2) Subsection 5 (3) of the Act is repealed and the following substituted:

Disclosure of deletion

(3) The aggregate amount for each ministry of all obligations, debts and claims that are deleted from the accounts under subsection (2) during a fiscal year must be reported in the Public Accounts or in the financial information supplementary to the Public Accounts for the fiscal year.

Effect of determination and deletion

(3.1) A determination made under clause (1) (b) or (c) with respect to an obligation, debt or claim and its subsequent deletion from the accounts under subsection (2) does not affect the liability of any person that is subject to the obligation, debt or claim.

70. Section 11.1 of the Act, as enacted by the Statutes of Ontario, 2002, chapter 8, Schedule B, section 2, is amended by adding the following subsection:

Same, by interim supply

(3.1) Nothing in this Act prohibits the Crown from incurring a non-cash expense under the authority of a resolution passed by the Assembly granting interim supply.

71. Subsection 28 (2) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 8, Schedule B, section 11, is amended by striking out "is not binding on or enforceable against the ministry" and substituting "is not binding on or enforceable against any ministry".

Commencement

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

Same

(2) Sections 70 and 71 come into force on April 1, 2003.

PART XI
FUEL TAX ACT

73. Subsection 1 (1) of the Fuel Tax Act, as amended by the Statutes of Ontario, 1991, chapter 49, section 1, 1994, chapter 18, section 2, 1996, chapter 10, section 1, 1998, chapter 30, section 1, 2001, chapter 23, section 89 and 2002, chapter 8, Schedule C, section 1, is amended by adding the following definition:

"manufacturer" means a person who manufactures, blends, modifies or produces fuel for distribution, sale or storage in Ontario but does not include a person designated by the Minister as a distributor; ("fabricant")

74. Subsection 2 (3.1) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 8, Schedule C, section 2, is amended by striking out "Subsection (3)" at the beginning and substituting "Subsection (1)".

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

Manufacturer: registration certificate

2.1 (1) Every manufacturer shall apply for and the Minister shall issue a registration certificate in such form and manner as the Minister requires.

Conditions and restrictions

(2) The Minister may, as a requirement for the issuance of a registration certificate, impose such reasonable conditions and restrictions as the Minister considers appropriate.

Change of business

(3) Every manufacturer shall forthwith notify the Minister of all changes in the name or nature of the manufacturer's business or of the termination of the business.

Offence

(4) A person who operates as a manufacturer in Ontario without holding a registration certificate issued under this section is guilty of an offence and on conviction is liable to a fine of not less than $500 and not more than $10,000.

Same

(5) A manufacturer who contravenes a condition or restriction contained in the registration certificate issued to the manufacturer under this section is guilty of an offence and on conviction is liable to a fine of not less than $500 and not more than $10,000.

Same

(6) A manufacturer who fails to comply with subsection (3) is guilty of an offence and on conviction is liable to a fine of not less than $500 and not more than $10,000.

Penalty, failure to register

(7) Every person who operates as a manufacturer in Ontario without holding a registration certificate issued under this section shall pay to the Minister, when assessed therefor, a penalty equal to the tax that would be payable under this Act on the volume of fuel that the person produced during the period that the person did not hold a registration certificate, calculated as if that fuel were clear fuel received or used by a purchaser liable to pay tax under clause 2 (1) (b).

76. Subsection 6.1 (1) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 8 and amended by 1998, chapter 30, section 20, is amended by striking out "Every collector" at the beginning and substituting "Every manufacturer, collector".

77. Subsection 7 (1) of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 9 and amended by 1998, chapter 30, section 21, is amended by striking out "to be a collector" and substituting "to be a manufacturer, collector".

78. Section 8 of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 10 and amended by 1994, chapter 18, section 2, 1997, chapter 19, section 7 and 2001, chapter 23, section 94, is amended by adding the following subsections:

Offence, failure to register

(4.1) Every interjurisdictional transporter transporting or transferring fuel in bulk into or out of Ontario who is not registered as an interjurisdictional transporter under this Act is guilty of an offence and on conviction is liable to a fine of not less than $1,000 and not more than $10,000.

Penalty, failure to register

(4.2) Every interjurisdictional transporter transporting or transferring fuel in bulk into or out of Ontario who is not registered as an interjurisdictional transporter under this Act shall pay to the Minister, when assessed therefor, a penalty equal to the sum of $500 and 5 per cent of the tax that would be payable under this Act on all fuel transported or transferred by the transporter into or out of Ontario during the period that the transporter was not registered, calculated as if that fuel were clear fuel received or used by a purchaser liable to pay tax under clause 2 (1) (b).

79. (1) Subsection 10 (1) of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 12 and amended by 1998, chapter 30, section 22, is amended by striking out "Every person who is a collector" at the beginning and substituting "Every person who is a manufacturer, collector".

(2) Subsection 10 (3) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 18, section 2, is repealed and the following substituted:

Offence, failure to deliver a return

(3) Every person who fails to deliver a return as required by subsection (1) is guilty of an offence and on conviction is liable to a fine of not less than $200 and not more than $5,000.

Penalty, failure to deliver a return

(3.1) Every person who is a collector, distributor, registered importer, registered exporter, registered dyer, interjurisdictional carrier or registered consumer who fails to deliver a return as required by subsection (1) shall pay to the Minister, when assessed therefor, a penalty equal to 10 per cent of the tax collectable or 5 per cent of the tax payable, as the case may be, by the person for the period covered by the return, whether or not the failure to file the return was caused by a person acting as an agent under subsection (7).

Same, manufacturer

(3.2) Every person who is a manufacturer who fails to deliver a return as required by subsection (1) shall pay to the Minister, when assessed therefor, a penalty of $1,000 for each month covered by the return and $1,000 for each month or part thereof that the return is late.

Same, interjurisdictional transporter

(3.3) Every person who is an interjurisdictional transporter who fails to deliver a return as required by subsection (1) shall pay to the Minister, when assessed therefor, a penalty of $1,000, whether or not the failure to file the return was caused by a person acting as an agent under subsection (7).

(3) Subsection 10 (4) of the Act is repealed and the following substituted:

Offence, failure to complete information

(4) Every person who fails to complete the information required in a return under subsection (1) is guilty of an offence and on conviction is liable to a fine of not less than $200 and not more than $5,000.

Penalty, failure to remit tax with a return

(4.1) Every person who fails to remit with their return under subsection (1) the tax collectable or the tax payable, as the case may be, by the person shall pay to the Minister, when assessed therefor, a penalty equal to 10 per cent of the tax collectable or 5 per cent of the tax payable, as the case may be, by the person for the period covered by the return, whether or not the failure to remit the tax was caused by a person acting as an agent under subsection (7).

80. Subsection 12 (2) of the Act, as amended by the Statutes of Ontario, 1991, chapter 49, section 14 and 1998, chapter 30, section 25, is amended,

(a) by striking out "by any collector" and substituting "by any manufacturer, collector"; and

(b) by striking out "to such collector" and substituting "to such manufacturer, collector".

81. (1) Section 13 of the Act, as amended by the Statutes of Ontario, 1991, chapter 49, section 15, 1994, chapter 18, section 2, 1997, chapter 19, section 7, 1998, chapter 30, section 26 and 2001, chapter 23, section 96, is amended by adding the following subsection:

Same, manufacturers

(3.1) Where it appears from an inspection, audit or examination of the books of account, records or documents of any manufacturer that this Act or the regulations have not been complied with, the Minister may assess a penalty against the manufacturer in an amount equal to the tax that would be payable under this Act on the volume of fuel that the manufacturer failed to report, calculated as if that fuel were clear fuel received or used by a purchaser liable to pay tax under clause 2 (1) (b).

(2) Subsection 13 (5.1) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 18, section 2, is repealed.

82. (1) Clause 18 (1) (a) of the Act is repealed and the following substituted:

(a) audit or examine any books or records and any documents that relate or may relate to the tax imposed by this Act;

(2) Subsection 18 (2) of the Act, as amended by the Statutes of Ontario, 1991, chapter 49, section 18, 1998, chapter 30, section 30 and 2001, chapter 23, section 101, is amended by adding "manufacturer" after "any purchaser, retail dealer, wholesaler, importer" in the portion before clause (a).

83. Clause 29 (2) (s) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 25, is repealed and the following substituted:

(s) prescribing percentages for the purposes of clauses 4.17 (2) (b) and (2.1) (b) and subsection 4.17 (3);

Commencement

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

Same

(2) Sections 73 and 75 to 82 come into force on July 1, 2003.

Same

(3) Section 74 shall be deemed to have come into force on June 18, 2002.

PART XII
GASOLINE TAX ACT

85. Subsection 1 (1) of the Gasoline Tax Act, as amended by the Statutes of Ontario, 1991, chapter 13, section 1, 1992, chapter 9, section 1, 1994, chapter 18, section 3, 1996, chapter 10, section 4, 1998, chapter 30, section 39 and 2001, chapter 23, section 106, is amended by adding the following definition:

"manufacturer" means a person who manufactures, blends, modifies or produces gasoline, propane or aviation fuel for distribution, sale or storage in Ontario; ("fabricant")

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

Manufacturer: registration certificate

2.1 (1) Every manufacturer shall apply for and the Minister shall issue a registration certificate in such form and manner as the Minister requires.

Conditions and restrictions

(2) The Minister may, as a requirement for the issuance of a registration certificate, impose such reasonable conditions and restrictions as the Minister considers appropriate.

Change of business

(3) Every manufacturer shall forthwith notify the Minister of all changes in the name or nature of the manufacturer's business or of the termination of the business.

Offence

Same

(6) A manufacturer who fails to comply with subsection (3) is guilty of an offence and on conviction is liable to a fine of not less than $500 and not more than $10,000.

Penalty, failure to register

(7) Every person who operates as a manufacturer in Ontario without holding a registration certificate issued under this section shall pay to the Minister, when assessed therefor, a penalty equal to the tax that would be payable under this Act on the volume of gasoline, aviation fuel or propane that the person manufactured, blended, modified or produced during the period that the person did not hold a registration certificate, calculated as if that gasoline, aviation fuel or propane were purchased by, delivered to or used by a purchaser liable to pay tax under section 2.

87. Section 5 of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 6 and amended by 1994, chapter 18, section 3, 1997, chapter 19, section 8 and 2001, chapter 23, section 110, is amended by adding the following subsections:

Offence, failure to register

(4.1) Every interjurisdictional transporter transporting or transferring gasoline in bulk, aviation fuel in bulk or propane in bulk into or out of Ontario who is not registered as an interjurisdictional transporter under this Act is guilty of an offence and on conviction is liable to a fine of not less than $1,000 and not more than $10,000.

Penalty, failure to register

(4.2) Every interjurisdictional transporter transporting or transferring gasoline in bulk, aviation fuel in bulk or propane in bulk into or out of Ontario who is not registered as an interjurisdictional transporter under this Act shall pay to the Minister, when assessed therefor, a penalty equal to the sum of $500 and 5 per cent of the tax that would be payable under this Act on all such gasoline, aviation fuel or propane transported or transferred by the transporter into or out of Ontario during the period that the transporter was not registered, calculated as if that gasoline, aviation fuel or propane were purchased by, delivered to or used by a purchaser in Ontario.

88. Subsection 6 (1) of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 10, section 7, is amended by striking out "to be a collector" and substituting "to be a manufacturer, collector".

89. (1) Subsection 8 (1) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 6 and amended by 1996, chapter 10, section 8 and 1998, chapter 30, section 43, is repealed and the following substituted:

Returns

(1) The Minister may demand that a person who is a manufacturer, collector, importer, exporter, interjurisdictional carrier or interjurisdictional transporter deliver to the Minister a return in such form as the Minister requires for the purpose of administering this Act and the person shall do so on or before the day designated in the demand.

(2) Subsection 8 (2) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 6 and amended by 1996, chapter 10, section 8, is amended by striking out "Every collector" at the beginning and substituting "Every manufacturer, collector".

(3) Subsection 8 (4) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 18, section 3, is repealed and the following substituted:

Offence, failure to deliver a return

(4) Every person who fails to deliver a return as required by this Act or the regulations is guilty of an offence and on conviction is liable to a fine of not less than $200 and not more than $5,000.

Penalty, failure to deliver a return

(4.1) Every person who is a collector, importer, exporter or interjurisdictional carrier who fails to deliver a return as required by this Act or the regulations shall pay to the Minister, when assessed therefor, a penalty equal to 10 per cent of the tax collectable or 5 per cent of the tax payable, as the case may be, by the person for the period covered by the return.

Same, manufacturer

(4.2) Every person who is a manufacturer who fails to deliver a return as required by this Act or the regulations shall pay to the Minister, when assessed therefor, a penalty of $1,000 for each month covered by the return and $1,000 for each month or part thereof that the return is late.

Same, interjurisdictional transporter

(4.3) Every person who is an interjurisdictional transporter who fails to deliver a return as required by this Act or the regulations shall pay to the Minister, when assessed therefor, a penalty of $1,000.

90. (1) Section 11 of the Act, as amended by the Statutes of Ontario, 1992, chapter 9, section 7, 1994, chapter 18, section 3, 1996, chapter 10, section 11, 1997, chapter 19, section 8, 1998, chapter 30, section 44 and 2001, chapter 23, section 111, is amended by adding the following subsection:

Same, manufacturers

(6.0.1) Where it appears from an inspection, audit or examination of the books of account, records or documents of any manufacturer that this Act or the regulations have not been complied with, the Minister may assess a penalty against the manufacturer in an amount equal to the tax that would be payable on the volume of gasoline, propane or aviation fuel that the manufacturer has failed to report, calculated as if the volume of gasoline, propane or aviation fuel had been purchased by, delivered to or used by a purchaser liable to pay tax under section 2.

(2) Subsection 11 (15.1) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 18, section 3, is repealed and the following substituted:

Assessment of penalties

(15.1) The Minister may, at any time the Minister considers reasonable, assess against any person any penalty that the Minister may assess under this Act against the person.

91. Subsection 15 (1) of the Act, as amended by the Statutes of Ontario, 1992, chapter 9, section 10 and 1996, chapter 10, section 12, is amended by striking out "Every collector" at the beginning and substituting "Every manufacturer, collector".

92. (1) Clause 16 (1) (a) of the Act is repealed and the following substituted:

(a) audit or examine any books or records and any documents that relate or may relate to the tax imposed by this Act;

(2) Subsection 16 (2) of the Act, as amended by the Statutes of Ontario, 1991, chapter 13, section 6, 1992, chapter 9, section 11 and 1996, chapter 10, section 13, is amended by striking out "interjurisdictional carrier or collector" wherever it appears in the portion before clause (a) and substituting in each case "interjurisdictional carrier, manufacturer or collector".

93. Clause 33 (2) (b) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 19, section 8, is repealed and the following substituted:

(b) prescribing records to be kept by persons, information to be shown and a return to be delivered by a person and prescribing times or periods of time for the delivery of a return by any person or class of persons;

Commencement

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

Same

(2) Sections 85 to 92 come into force on July 1, 2003.

PART XIII
HIGHWAY TRAFFIC ACT
AND A RELATED AMENDMENT

95. Subsection 6 (1) of the Highway Traffic Act, as amended by the Statutes of Ontario, 1999, chapter 12, Schedule R, section 1, is amended by adding the following definition:

"IRP inspector" means a person appointed as an IRP inspector under subsection 7.3 (1); ("inspecteur de l'IRP")

96. Subsection 7 (7) of the Act is amended by adding "and the requirements of the Compulsory Automobile Insurance Act" at the end.

97. (1) Subsection 7 (17) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 12, Schedule R, section 2, is repealed.

(2) Subsections 7 (18), (19) and (20) of the Act are repealed.

98. Part II of the Act is amended by adding the following sections:

Record-keeping by IRP permit holders

7.2 (1) Every holder of an IRP cab card issued under subsection 7 (7) shall maintain and preserve the prescribed records for three years after the registration year for which the IRP cab card was issued.

Offence

(2) Every person who fails to comply with subsection (1) is guilty of an offence and on conviction is liable to a fine of not less than $250 and not more than $20,000.

Examination and inspection

7.3 (1) The Minister may appoint one or more employees of the Government of Ontario as IRP inspectors.

Identification

(2) An IRP inspector conducting an examination and inspection shall produce, on request, evidence of his or her appointment.

Powers

(3) For any purpose related to the administration or enforcement of the International Registration Plan, an IRP inspector may, at any reasonable time, enter any place where activities related to an IRP cab card holder's operation of commercial motor vehicles are carried on or where anything is kept or done in connection with such operation or any records are kept under this Part.

Same

(4) An IRP inspector may conduct an examination and inspection at the place entered under subsection (3) and for such purpose may,

(a) examine and inspect a record or other thing that may be relevant to the examination and inspection;

(b) require the production of a record or other thing that the IRP inspector thinks may be relevant to the examination and inspection;

(c) remove for examination, inspection or copying any record or other thing that the IRP inspector thinks may be relevant to the examination and inspection;

(d) in order to produce a record in readable form, use data storage, information processing or retrieval devices or systems that are normally used in carrying on business in the place and require any person, including the IRP cab card holder, any partner, director, officer, agent, representative or employee of the holder, any driver engaged by the holder or any person at the place, to give the IRP inspector all reasonable assistance in using them;

(e) require any person, including the IRP cab card holder, any partner, director, officer, agent, representative or employee of the holder, any driver engaged by the holder or any person at the place, to give the IRP inspector all reasonable assistance in the examination and inspection;

(f) question any person, including the IRP cab card holder, any partner, director, officer, agent, representative or employee of the holder, any driver engaged by the holder or any person at the place, on matters that the IRP inspector thinks may be relevant to the examination and inspection and require answers to be made orally or in writing;

(g) require any person, including the IRP cab card holder, any partner, director, officer, agent, representative or employee of the holder or any driver engaged by the holder, to attend at the place with the IRP inspector for the purpose of clause (d), (e) or (f).

Written demand for records

(5) An IRP inspector may at any time, for any purpose related to the administration or enforcement of the International Registration Plan, deliver a demand personally on an IRP cab card holder, any partner, director, officer, agent, representative or employee of the holder or any driver engaged by the holder, or mail a demand to such person at the latest address of the person appearing on the records of the Ministry, requiring that the person deliver to the IRP inspector, within the time specified in the demand, any record or other thing the production of which could be required under clause (4) (b).

Same

(6) A demand sent by mail shall be deemed to have been received on the fifth day after it was mailed, unless the person to whom the demand was mailed establishes that the person did not, acting in good faith, through absence, accident, illness or other cause beyond the person's control, receive the demand.

Obligation to produce and assist

(7) If an IRP inspector requires that a record or other thing be produced under clause (4) (b) or delivered to him or her under subsection (5), the person upon whom the demand is made shall produce or deliver it and, in the case of a record, shall on request provide any assistance that is reasonably necessary to interpret the record or to produce it in a readable form.

Records and things removed

(8) An IRP inspector who removes a record or other thing under clause (4) (c) or to whom a record or other thing is delivered pursuant to a demand made under subsection (5) shall give a receipt for the record or thing and return the record or thing to the person who produced or delivered it within a reasonable time.

Powers to assist other IRP jurisdictions

(9) An IRP inspector, accompanied by an official from another jurisdiction that is a member of the International Registration Plan, may exercise his or her powers under this section for any purpose related to the administration or enforcement of the International Registration Plan by the other jurisdiction and subsections (2) and (3), clause (12) (c) and subsection (13) apply, with necessary modifications, to and in respect of an official from another jurisdiction accompanying an IRP inspector who is conducting an examination and inspection under this section.

Copies admissible in evidence

(10) A copy of a record that purports to be certified to be a true copy by the IRP inspector or other employee of the Government of Ontario who made the copy is admissible in evidence in any proceeding or prosecution as proof, in the absence of evidence to the contrary, of the original record and its contents.

Same

(11) A copy made from an electronic record that purports to be certified by the IRP inspector or other employee of the Government of Ontario who made the copy to be a paper copy of the electronic record and to be a true and accurate representation of the electronic record or the information contained in the electronic record, is admissible in evidence in any proceeding or prosecution as proof, in the absence of evidence to the contrary, of the original record and its contents.

Offence

(12) No person shall,

(a) fail to comply with a direction or requirement of an IRP inspector conducting an examination and inspection;

(b) give an IRP inspector conducting an examination and inspection information that the person knows to be false, deceptive or misleading; or

Penalty

(13) A person who contravenes subsection (12) is guilty of an offence and on conviction is liable to a fine of not less than $250 and not more than $20,000 or to imprisonment for a term of not more than six months, or to both.

Sharing examination, inspection findings with other
IRP jurisdictions

7.4 The Minister shall, in accordance with the terms of the International Registration Plan, provide the findings from every examination and inspection conducted under section 7.3,

(a) to such other member jurisdictions of the Plan, or their delegates, that have an interest in the findings; and

(b) to the governing body of the Plan or its delegate.

IRP inspector's costs

7.5 Where an IRP inspector travels outside of Ontario to conduct an examination and inspection under section 7.3 respecting a holder of an IRP cab card issued under subsection 7 (7), the holder shall pay to the Minister the IRP inspector's travel expenses and a daily fee for the IRP inspector's work.

Assessment and reassessment of fees,
etc.

7.6 (1) The Minister may assess or reassess the amount of fees owed by a holder of an IRP cab card issued under subsection 7 (7) pursuant to the International Registration Plan to the Minister and to every other member jurisdiction of the Plan and the amount of taxes owed by a holder of an IRP cab card issued under subsection 7 (7) to every other member jurisdiction of the Plan that Ontario is required to collect pursuant to the Plan at any time or times within three years after the registration year for which the fees and taxes were owed.

Same

(2) Despite subsection (1), where the Minister establishes that the holder has made any misrepresentation that is attributable to neglect, carelessness or wilful default, or has committed any fraud, in supplying any information under this Part in respect of the Plan or in omitting to disclose any information, then the Minister may assess or reassess the fees and taxes described in subsection (1) at any time the Minister considers reasonable.

Same

(3) The Minister may, under subsection (1) or (2), assess or reassess the amount of fees and taxes using whatever method the Minister considers appropriate where, as a result of an examination and inspection under section 7.3, the IRP inspector determines that,

(a) the information filed by the holder with the Ministry is not substantiated by the records examined and inspected;

(b) the holder failed to maintain and preserve the records required by section 7.2; or

Same

(4) The assessment or reassessment shall be based on all relevant information available to the Minister, including information about comparable permit holders.

Penalty

(5) Where the Minister assesses or reassesses an IRP cab card holder, he or she may assess a penalty equal to 10 per cent of the assessment or reassessment.

Refund to holder

(6) Where, as a result of an examination and inspection under section 7.3, it is determined that an IRP cab card holder paid fees or taxes in excess of what the holder owed pursuant to the International Registration Plan, the Minister shall assess or reassess the amount of the fees and taxes owed accordingly and the Minister may refund the excess to the holder.

Notice

(7) The Minister shall deliver a notice of assessment or reassessment personally on the IRP cab card holder or shall mail it to the holder at the latest address for the holder appearing on the records of the Ministry.

Same

(8) A notice of assessment or reassessment sent by mail shall be deemed to have been received on the fifth day after it was mailed unless the holder establishes that the holder did not, acting in good faith, through absence, accident, illness or other cause beyond the holder's control, receive it.

Payment

(9) Every person assessed or reassessed under this section shall pay to the Minister the amount assessed or reassessed within 30 days after receiving the notice of assessment or reassessment, whether or not an objection to the assessment or reassessment is outstanding.

Included in assessment, reassessment

(10) For the purposes of this section, an assessment or reassessment of fees and taxes includes travel costs and fees owed under section 7.5, penalties assessed under this section and interest owed under section 7.7.

Interest

7.7 (1) Interest is payable to the Minister on the amount of any unpaid fees and penalties owed to the Minister and on the amount of any unpaid taxes owed to another member jurisdiction of the International Registration Plan and collected by Ontario pursuant to the Plan at the prescribed rate and calculated in the prescribed manner.

Compounding

(2) Interest shall be compounded daily to the date on which it is paid.

Objections

7.8 (1) An IRP cab card holder who objects to an assessment, reassessment or penalty may, within 30 days after receiving the notice of assessment or reassessment, serve on the Minister a written objection in the form approved by the Minister.

Decision

(2) The Minister shall consider the written submissions and shall confirm, vary or set aside the assessment, reassessment or penalty objected to.

Extension of time

(3) The Minister may extend the time for objecting if the person seeking to object proves to the satisfaction of the Minister that the objection could not have been served on time.

Appeal or review from Minister's decision

7.9 (1) No further appeal or other review shall be available from a decision under subsection 7.8 (2) except as provided in the International Registration Plan.

Appeal or review under IRP binding

(2) Where an appeal or review is provided for and conducted under the terms of the International Registration Plan, the Minister and the IRP cab card holder who was a party to the appeal or review are bound by the decision made on that appeal or review.

False statements on IRP documents

7.10 (1) Every person is guilty of an offence who has made, or participated in, assented to or acquiesced in the making of, false or deceptive statements in an application or other documentation filed with the Ministry with respect to an IRP cab card.

Penalty

(2) A person convicted of an offence under subsection (1) is liable to one or both of the following penalties in addition to any assessment, penalty or interest under section 7.6 or 7.7:

1. A fine that is,

i. not less than $1,000 or 50 per cent of the amount of the fees and taxes that was evaded, whichever is greater, and

ii. not more than double the amount of the fees and taxes that was evaded, if the maximum so calculated is greater than the amount determined under subparagraph i.

2. Imprisonment for a term of not more than six months.

Permit refusal or cancellation

7.11 (1) The Minister may, in his or her discretion, cancel or refuse to issue an IRP cab card where the owner or lessee of the vehicle for which an IRP cab card has been issued under subsection 7 (7) or applied for,

(a) has been convicted of an offence under section 7.2, 7.3 or 7.10;

(b) has not paid all of the amounts owed by the person under this Part with respect to the IRP cab card; or

Same

(2) The Minister may, in his or her discretion, cancel or refuse to issue an IRP cab card where the owner or lessee of the vehicle for which an IRP cab card has been issued under subsection 7 (7) or applied for is related to,

(a) a person who has been convicted of an offence under section 7.2, 7.3 or 7.10;

(b) a person who has not paid all of the amounts owed by the person under this Part with respect to the IRP cab card; or

Interpretation

(3) An owner or lessee of a vehicle is related to a person for the purpose of subsection (2) if,

(a) the owner or lessee and the person are related individuals;

(b) either the owner or lessee or the person is a partner of the other or was a partner of the other or they have or have had partners in common;

(c) either the owner or lessee or the person, directly or indirectly, controls or controlled or manages or managed the other; or

(d) the owner or lessee and the person have or have had common officers or directors or they are or have been controlled, directly or indirectly, by the same shareholders.

Modification of permit

(4) The Minister may, at the request of another member jurisdiction of the International Registration Plan and in accordance with the terms of the Plan, remove that jurisdiction from an IRP cab card issued under subsection 7 (7).

Notice

(5) The Minister shall give notice of the cancellation or modification of or refusal to issue an IRP cab card by delivering the notice personally on the IRP cab card holder or applicant or by mailing the notice to the person at the latest address of the person appearing on the records of the Ministry.

Same

(6) Notice sent by mail shall be deemed to have been received on the fifth day after it was mailed unless the person to whom the notice was mailed establishes that the person did not, acting in good faith, through absence, accident, illness or other cause beyond the person's control, receive the notice.

Objection

(7) A person who has received notice that the Minister has cancelled an IRP cab card or refused to issue an IRP cab card may, within 30 days after receiving the notice, serve on the Minister a written objection in the form approved by the Minister.

Decision

(8) The Minister shall consider the written submissions and shall confirm, vary or set aside the decision objected to.

Decision final

(9) The Minister's decision under subsection (8) is final and no further appeal or other review shall be available from it.

Extension of time

(10) The Minister may extend the time for objecting if the person seeking to object proves to the satisfaction of the Minister that the objection could not have been served on time.

Collection and disclosure of information

7.12 (1) The Minister may, for any purpose related to the administration or enforcement of the International Registration Plan, collect information, directly or indirectly, and retain and use such information, including,

(a) information collected and disclosed to the Minister by another minister, another member jurisdiction of the Plan or its delegate or the governing body of the Plan or its delegate; and

(b) information about the employees and agents of an IRP cab card holder or an applicant for an IRP cab card.

Same

(2) Every other minister of the Crown shall disclose to the Minister information collected by the other minister that may assist the Minister in carrying out his or her duties in the administration or enforcement of the International Registration Plan.

Assignment to another minister

7.13 If any power or duty of the Minister under this Part, as it relates to the International Registration Plan or an IRP cab card holder, is assigned to another minister of the Crown under the Executive Council Act, section 7.12 both applies to the other minister of the Crown as if he or she were the Minister and continues to apply to the Minister.

Disclosure to Minister of Finance
re taxing statutes

7.14 The Minister shall disclose any information collected by the Minister with respect to the International Registration Plan or an IRP cab card holder to the Minister of Finance, or to any employee of the Ministry of Finance, that may assist the Minister of Finance or the employee in carrying out his or her duties in the administration or enforcement of the Fuel Tax Act, Gasoline Tax Act or Retail Sales Tax Act.

Regulations

7.15 (1) The Lieutenant Governor in Council may make regulations,

(a) prescribing information to be included in an application for an IRP cab card;

(b) prescribing the records to be maintained and preserved under section 7.2;

(d) prescribing the rate of interest and the manner of calculating it for the purposes of section 7.7;

(e) prescribing the manner of serving objections under subsections 7.8 (1) and 7.11 (7).

Same

(2) A regulation may establish classes of IRP cab card holders and may contain different provisions and requirements for different classes.

Fees

7.16 The Minister may set a daily fee for work by IRP inspectors outside of Ontario for the purpose of section 7.5.

Forms

7.17 The Minister may require that forms approved by the Minister be used for any purpose respecting the International Registration Plan.

99. Sections 24 and 25 of the Act are repealed.

100. Clause 205 (1) (c) of the Act, as amended by the Statutes of Ontario, 1996, chapter 33, section 16, is amended by adding the following subclause:

(iii.2) a record of all information relating to the International Registration Plan that is received by the Ministry,

Repeal

101. Subsection 2 (6) of Schedule R to the Red Tape Reduction Act, 1999 is repealed.

Commencement

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

Same

(2) Section 96 comes into force on a day to be named by proclamation of the Lieutenant Governor.

PART XIV
INCOME TAX ACT

103. Subclause (b) (i.2) of the definition of "Provincial Minister" in subsection 1 (1) of the Income Tax Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 47, is repealed and the following substituted:

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

104. (1) Paragraph 10 of subsection 3 (1) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 23, section 127, is amended by striking out the portion before subparagraph i and substituting the following:

10. The additional tax for each of the 2002 and 2003 taxation years is the aggregate of,

. . . . .

(2) Paragraph 11 of subsection 3 (1) of the Act, as enacted by the Statutes of Ontario, 2001, chapter 23, section 127, is amended by striking out "2003" and substituting "2004".

105. (1) Clauses (c) and (d) of the definition of "lowest tax rate" in subsection 4 (1) of the Act, as enacted by the Statutes of Ontario, 2001, chapter 23, section 128, are repealed and the following substituted:

(d) 5.65 per cent for the 2004 and each subsequent taxation year;

(2) Clauses (c) and (d) of the definition of "middle tax rate" in subsection 4 (1) of the Act, as enacted by the Statutes of Ontario, 2001, chapter 23, section 128, are repealed and the following substituted:

(d) 8.85 per cent for the 2004 and each subsequent taxation year;

106. The definitions of "E", "F", "G" and "H" in subsection 4.1 (2) of the Act, as enacted by the Statutes of Ontario, 2001, chapter 23, section 129, are repealed and the following substituted:

"E" is the number of days in the taxation year that are after September 30, 2001 and before January 1, 2004,

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

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

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

107. The definition of "D" in subsection 7 (2.4) of the Act, as enacted by the Statutes of Ontario, 2001, chapter 23, section 130, is repealed and the following substituted:

"D" is,

(a) for the 2002 taxation year, $156,

(b) for the 2003 taxation year, $178,

(c) for the 2004 or a subsequent taxation year, the basic reduction for the prior taxation year or, if the basic reduction for the prior taxation year was rounded to a whole dollar amount under subsection (2.6), the amount that would be the basic reduction for the prior taxation year if the amount had not been rounded to a whole dollar amount,

108. (1) Subclause (c) (i) of the definition of "housing unit" in subsection 8 (1) of the Act, as amended by the Statutes of Ontario, 1998, chapter 34, section 69, is repealed and the following substituted:

(i) such premises are exempt from the payment of taxes levied under the Provincial Land Tax Act, the Local Roads Boards Act or taxes for municipal and school purposes levied in respect of real property in Ontario that is assessed as residential or multi-residential property, or

(2) Clause (a) of the definition of "municipal tax" in subsection 8 (1) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 25, section 3 and amended by 1998, chapter 34, section 69, is repealed and the following substituted:

(a) taxes for municipal and school purposes levied in respect of real property in Ontario that is assessed as residential or multi-residential property,

(3) 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, 1999, chapter 9, section 120, 2000, chapter 42, section 55, 2001, chapter 8, section 40 and 2001, chapter 23, section 131, is amended by adding the following subsection:

Extension of property tax credit for 2001,
certain taxpayers

(7.3) For the purpose of clause (3) (a) or (3.1) (a), the amount of an individual's 2001 municipal tax that is due in 2002 and paid by the due date may be used to determine the individual's occupancy cost for 2001 or 2002, if the individual's principal residence in 2001 was located in a territory without municipal organization in an area of jurisdiction of a school board.

(4) Subsection 8 (8.1) of the Act, as enacted by the Statutes of Ontario, 1992, chapter 18, section 55 and amended by 1994, chapter 17, section 99, 1996, chapter 24, section 13, 1996, chapter 29, section 9, 1997, chapter 43, Schedule B, section 4, 1998, chapter 34, section 69 and 2001, chapter 23, section 131, is amended by striking out "or (15.6)" in the portion before clause (a) and substituting "(15.6) or (16)".

(5) 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, 1999, chapter 9, section 120, 2000, chapter 42, section 55, 2001, chapter 8, section 40 and 2001, chapter 23, section 131, is amended by adding the following subsection:

Ontario school bus safety tax credit

(16) An individual who is an eligible individual under section 8.4.4 may deduct from the amount of tax otherwise payable under this Act for a taxation year ending after June 17, 2002 and commencing before January 1, 2006 an amount not exceeding the amount of his or her Ontario school bus safety tax credit determined under section 8.4.4 for the taxation year.

(6) Paragraph 2 of subsection 8 (17) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 23, section 131, is amended by striking out "and (15.4)" and substituting "(15.4) and (16)".

(7) Paragraph 3 of subsection 8 (17) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 23, section 131, is amended by striking out "and (15.4)" and substituting "(15.4) and (16)".

(8) Paragraph 7 of subsection 8 (17) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 23, section 131, is amended by striking out "and (15.4)" and substituting "(15.4) and (16)".

(9) Paragraph 8 of subsection 8 (17) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 23, section 131, is amended by striking out "and (15.4)" and substituting "(15.4) and (16)".

109. Paragraphs 1 and 2 of subsection 8.4.2 (3) of the Act, as enacted by the Statutes of Ontario, 2001, chapter 8, section 41, are repealed and the following substituted:

1. If the taxation year commences after December 31, 2001 and ends before January 1, 2004, the appropriate percentage is 10 per cent.

2. If the taxation year commences after December 31, 2003, the appropriate percentage is 20 per cent.

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

Ontario school bus safety tax credit

8.4.4 (1) The amount of an eligible individual's Ontario school bus safety tax credit for a taxation year is the amount equal to 5 per cent of the individual's qualifying expenditures under this section for the taxation year.

Eligible individual

(2) For the purposes of this section, an individual is an eligible individual in respect of a taxation year if he or she,

(a) carries on business through a permanent establishment in Ontario in the taxation year; and

(b) is not exempt from tax under section 6.

Qualifying expenditures under this section

(3) The amount of an eligible individual's qualifying expenditures under this section for a taxation year is the total of all amounts each of which is the capital cost to the individual of an eligible school bus acquired by the individual in the taxation year.

Eligible school bus

(4) A vehicle acquired by an eligible individual is an eligible school bus if the following conditions are satisfied:

1. The vehicle must be a school bus as defined in subsection 175 (1) of the Highway Traffic Act.

2. The vehicle must meet the requirements of sections 1 and 3 of Regulation 612 of the Revised Regulations of Ontario, 1990 ("School Buses") made under that Act and it must conform to Canadian Standards Association Standard D250-1998 ("School Buses").

3. The individual must have acquired the vehicle after June 17, 2002 and before January 1, 2006.

4. The vehicle must not have been used before the individual acquired it.

5. The vehicle must be used by the individual for at least 36 months after acquiring it. It must be used throughout that period for the primary purpose of transporting children in Ontario or transporting adults with a developmental disability in Ontario.

6. For the purposes of the Federal Act, the individual must include the capital cost of the vehicle in class 10 of Schedule II to the regulations made under that Act.

Partnerships

(5) If an eligible individual is a member of a partnership at the end of a taxation year and if the partnership incurs, in a fiscal period of the partnership that ends in the taxation year, a capital cost in respect of the acquisition of an eligible school bus that would qualify for the Ontario school bus safety tax credit if the bus had been acquired by an eligible individual, the eligible individual who is the member of the partnership may include, in determining the amount of his or her Ontario school bus safety tax credit, that portion of the capital cost of the bus that may reasonably be attributed to him or her.

Limited partner

(6) Subsection (5) does not apply if the eligible individual is a limited partner in the partnership.

Penalty

(7) An eligible individual is liable to pay a penalty equal to the amount calculated under subsection (8) if, within 36 months after an eligible school bus is acquired, the individual or a partnership in which the individual is a member disposes of the bus or begins to use it for a primary purpose other than transporting children in Ontario or transporting adults with a developmental disability in Ontario.

Amount of penalty

(8) The amount of the penalty under subsection (7) is calculated using the formula,

A × [(1095 - B) / 1095]

where,

"A" is 0.05 multiplied by the amount of the capital cost of the eligible school bus that the eligible individual included in determining the amount of his or her Ontario school bus safety tax credit for a taxation year, and

"B" is the number of days that the eligible individual or the partnership in which the individual is a member owned the eligible school bus before disposing of it or before beginning to use it for a primary purpose other than transporting children in Ontario or transporting adults with a developmental disability in Ontario.

Exception

(9) Subsection (7) does not apply in respect of the disposition of an eligible school bus by an eligible individual or by a partnership in which the eligible individual is a member,

(a) if the individual or partnership disposes of the bus in connection with a disposition by the individual or partnership of all or substantially all of the business in which the bus was used, and the person acquiring the business continues after the disposition to carry on the business in Ontario;

(b) if the individual is bankrupt, is in receivership or is insolvent and the bus is disposed of in the course of the disposition of the assets of the individual's business; or

(c) if the individual disposes of the bus to a corporation in a transfer to which subsection 85 (1) of the Federal Act applies, or disposes of the bus to a partnership in a transfer to which subsection 97 (2) of the Federal Act applies.

111. Section 8.7 of the Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 58 and amended by 2001, chapter 23, section 134, is amended by adding the following subsections:

Exception, short taxation year

(14.1) If an employer or a corporation not dealing at arm's length with an employer enters into a stock option agreement after December 21, 2000, the condition described in paragraph 4 of subsection (10) shall be deemed to be satisfied for the taxation year before the year in which the stock option agreement is entered into (the "preceding taxation year") if the conditions described in paragraphs 1 and 2 of subsection (14.2) are satisfied and,

(a) if the conditions described in paragraphs 3 and 4 of subsection (14.2) are satisfied;

(b) if the condition described in paragraph 5 of subsection (14.2) is satisfied; or

Same

(14.2) The following are the conditions referred to in subsection (14.1):

1. The preceding taxation year is less than 51 weeks in duration.

2. The employer's eligible expenditures for the taxation year that precedes the preceding taxation year are not less than $25 million or 10 per cent of the employer's total revenue for that taxation year, whichever is less.

3. The employer is associated with one or more other corporations (each referred to as an associated corporation) throughout the preceding taxation year. Each associated corporation has a permanent establishment in Canada throughout the preceding taxation year.

4. The eligible expenditures of an associated corporation are not included in the eligible expenditures of the employer for the preceding taxation year because the taxation year of the associated corporation did not end in the preceding taxation year.

5. If the employer or an associated corporation is a member of a partnership in the preceding taxation year and if the partnership carried on business in Canada throughout the preceding taxation year, expenditures of the partnership that would be eligible expenditures if they had been incurred by a corporation are not included in the eligible expenditures of the employer for the preceding taxation year because the fiscal period of the partnership did not end in the preceding taxation year.

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

Division C.2 - Tax Incentive
for Investing in
Ontario Jobs and Opportunity Bonds

Tax incentive, Ontario Jobs and Opportunity
Bonds

8.9 (1) In this section,

"Ontario Jobs and Opportunity Bond" means a bond, debenture or other security,

(a) that is issued by the Authority and is designated by it as an Ontario Jobs and Opportunity Bond,

(b) that is issued by a subsidiary, trust, partnership or other entity established or acquired by the Authority and is designated by the Authority as an Ontario Jobs and Opportunity Bond, or

(c) that is designated by the Provincial Minister as an Ontario Jobs and Opportunity Bond. ("obligation ontarienne de financement d'emplois et de projets")

Tax incentive

(2) An eligible individual who owns an Ontario Jobs and Opportunity Bond at any time in a taxation year is entitled to receive a tax incentive under this section in respect of the interest received or receivable on the Bond in the taxation year.

Eligible individual

(3) An individual is an eligible individual under this section if he or she satisfies the prescribed conditions.

Certificate

Regulations

(5) The Provincial Minister may make regulations,

(a) prescribing the nature of the tax incentive and the manner in which it is calculated;

(b) prescribing the conditions that must be satisfied for an individual to be eligible to receive a tax incentive under this section;

(d) prescribing circumstances in which a tax incentive must be repaid by an individual and prescribing the rules applicable to the repayment;

(e) governing the provision of such information as the Provincial Minister may require for the administration of this section;

(f) prescribing any other matter that the Provincial Minister considers necessary or advisable for the purposes of this section.

Commencement

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

Same

(2) Sections 103 and 112 come into force on a day to be named by proclamation of the Lieutenant Governor.

Same

(3) Subsections 108 (1) and (2) come into force on January 1, 2003.

Same

(4) Subsection 108 (3) shall be deemed to have come into force on January 1, 2001.

Same

(5) Section 111 shall be deemed to have come into force on February 1, 2002.

PART XV
INSURANCE ACT

114. (1) Paragraph 28.1 of subsection 121 (1) of the Insurance Act, as enacted by the Statutes of Ontario, 1993, chapter 10, section 12, is repealed and the following substituted:

28.1 exempting a person or class of persons from section 393 and sections 397 to 401, or from any provision of those sections, subject to such terms and conditions, including any limitations or restrictions, as may be specified in the regulations;

(2) Subsection 121 (1) of the Act, as amended by the Statutes of Ontario, 1993, chapter 10, section 12, 1994, chapter 11, section 338, 1996, chapter 21, section 14, 1997, chapter 19, section 10, 1997, chapter 28, section 107, 1999, chapter 12, Schedule I, section 4 and 2000, chapter 26, Schedule G, section 1, is amended by adding the following paragraphs:

14.1 for the purposes of Part VI or any provision of Part VI,

i. defining "automobile",

ii. prescribing any vehicle or class of vehicles to be automobiles subject to any terms and conditions prescribed in the regulations,

iii. prescribing any vehicle or class of vehicles not to be automobiles, subject to any terms and conditions prescribed in the regulations;

. . . . .

19.1 prescribing types of contracts and circumstances in which section 236 does not apply;

. . . . .

23.6.1 for the purpose of this Act or any provision of this Act, deeming payments for income loss or loss of earning capacity under an income continuation benefit plan to include payments prescribed by the regulations;

. . . . .

28.3 for the purposes of section 284.1, specifying terms and conditions governing the representation of a party to a proceeding under sections 279 to 284;

28.4 prescribing persons or classes of persons for the purposes of subsection 398 (3) and prescribing terms and conditions governing persons engaged in an activity set out in subsection 398 (1);

115. The definition of "automobile" in subsection 224 (1) of the Act is repealed and the following substituted:

"automobile" includes,

(a) a motor vehicle required under any Act to be insured under a motor vehicle liability policy, and

(b) a vehicle prescribed by regulation to be an automobile; ("automobile")

116. Subsection 230 (2) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 18, is repealed and the following substituted:

Information from agents

(2) An agent shall inform an applicant for automobile insurance of the insurer or the insurers within an affiliated group of insurers that the agent represents.

Request for written information

(3) The broker or agent shall provide the information referred to in subsection (1) or (2) in writing if the applicant so requests.

117. Section 236 of the Act is amended by adding the following subsection:

Exception

(6) This section does not apply to prescribed types of contracts in prescribed circumstances.

118. Section 243 of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 21, section 20, is amended by adding the following subsection:

Same

(1.1) Payment provided for under subsection 265 (1) applies to loss or damage resulting from an accident involving an uninsured or unidentified automobile in Canada, the United States of America and any other jurisdiction designated in the Statutory Accident Benefits Schedule, and on a vessel plying between ports of Canada, the United States of America or a designated jurisdiction.

119. Section 267.4 of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is amended by adding the following subsection:

Effect of amendments

(2) Subsection (1) shall not be interpreted as requiring an amendment made to sections 267.5 to 267.11 to apply in respect of the use or operation, before the amendment came into force, of an automobile.

120. (1) Subsection 267.5 (3) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is repealed and the following substituted:

Protection from liability; health care expenses

(3) Despite any other Act and subject to subsection (6), the owner of an automobile, the occupants of an automobile and any person present at the incident are not liable in an action in Ontario for damages for expenses that have been incurred or will be incurred for health care resulting from bodily injury arising directly or indirectly from the use or operation of the automobile unless, as a result of the use or operation of the automobile, the injured person has died or has sustained,

(a) permanent serious disfigurement; or

(b) permanent serious impairment of an important physical, mental or psychological function.

(2) Subsection 267.5 (4) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is repealed.

(3) Paragraph 3 of subsection 267.5 (7) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is amended by striking out "The amount" at the beginning and substituting "Subject to subsections (8) and (8.1), the amount".

(4) Subsection 267.5 (8) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is repealed and the following substituted:

Application of subpar. 3 i of subs. (7)

(8) Subparagraph 3 i of subsection (7) does not apply if the amount of damages for non-pecuniary loss, other than damages for non-pecuniary loss under clause 61 (2) (e) of the Family Law Act, would exceed $100,000 in the absence of that subparagraph.

Application of subpar. 3 ii of subs. (7)

(8.1) Subparagraph 3 ii of subsection (7) does not apply if the amount of damages for non-pecuniary loss under clause 61 (2) (e) of the Family Law Act would exceed $50,000 in the absence of that subparagraph.

Application of subss. (7)-(8.1)

(8.2) Subsections (7), (8) and (8.1) apply in respect of each person who is entitled to damages for non-pecuniary loss.

(5) Section 267.5 of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is amended by adding the following subsection:

Vicarious liability

(10.1) Despite any provision of this Part, a person vicariously liable for the fault or negligence of a protected defendant is not, in respect of the person's vicarious liability, liable for any amount greater than the amount of damages for which the protected defendant is liable.

(6) Subsection 267.5 (11) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is repealed.

(7) Subsection 267.5 (12) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is amended by striking out "subsection (5)" in the portion before clause (a) and substituting "subsections (3) and (5)".

(8) Subsection 267.5 (13) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is amended by striking out "(11) or".

(9) Subsection 267.5 (14) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is repealed.

(10) Subsection 267.5 (15) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is amended by striking out "subsection (5)" in the portion before clause (a) and substituting "subsections (3) and (5)".

121. Section 267.8 of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29 and amended by 1997, chapter 16, section 9, is amended by adding the following subsection:

Reduction re arbitration

(7.1) In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, the damages described in subsections (1), (4) and (6) to which a plaintiff is otherwise entitled shall be further reduced by such amount as may be determined through arbitration under section 267.8.1.

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

Mandatory arbitration re certain collateral benefits

267.8.1 (1) This section applies with respect to an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile.

Same

(2) The plaintiff or a defendant who meets the prescribed criteria may require any of the following persons to submit to arbitration under the Arbitration Act, 1991 with respect to the matters described in subsection (3):

1. A person liable to make a payment in respect of the incident that the plaintiff may receive after the trial of the action for statutory accident benefits in respect of income loss or loss of earning capacity.

2. A person liable to make a payment in respect of the incident that the plaintiff may receive after the trial of the action for income loss or loss of earning capacity under the laws of any jurisdiction or under an income continuation benefit plan.

3. A person liable to make a payment in respect of the incident that the plaintiff may receive after the trial of the action under a sick leave plan arising by reason of the plaintiff's occupation or employment.

4. A person liable to make a payment in respect of the incident that the plaintiff may receive after the trial of the action for statutory accident benefits in respect of expenses for health care.

5. A person liable to make a payment in respect of the incident that the plaintiff may receive after the trial of the action under any medical, surgical, dental, hospitalization, rehabilitation or long-term care plan or law.

6. A person liable to make a payment in respect of the incident that the plaintiff may receive after the trial of the action for statutory accident benefits in respect of pecuniary loss, other than income loss, loss of earning capacity and expenses for health care.

Scope of arbitration

(3) The arbitrator may determine, or decline to determine, such matters as may be prescribed by regulation.

123. Section 267.11 of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is repealed and the following substituted:

No gross-up for income tax

267.11 (1) In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, an award against a protected defendant shall not include any amount to offset liability for income tax payable on income from investment of the award with respect to,

(a) damages for income loss or loss of earning capacity;

(b) damages that are payable periodically pursuant to an order of a court under section 267.10;

(c) any component of an award, other than an award for damages mentioned in clause (b), that the plaintiff and defendant agree the defendant shall pay on a periodic basis.

Application

(2) Clause (1) (a) does not apply to an award for income loss or loss of earning capacity under subsection 61 (1) of the Family Law Act.

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

Winding up orders

268.0.1 (1) The making of a winding-up order in respect of an insurer under the Winding-up and Restructuring Act (Canada) shall not be taken into account in determining under section 268 whether the insurer is liable to pay statutory accident benefits.

Motor Vehicle Accident Claims
Fund

(2) If an insurer in respect of which a winding-up order has been made under the Winding-up and Restructuring Act (Canada) is liable to pay statutory accident benefits, the benefits, including any benefits that were outstanding at the time the order was made, shall be paid out of the Motor Vehicle Accident Claims Fund.

Application

(3) This section applies to winding-up orders made after this section comes into force.

125. Section 268.3 of the Act, as enacted by the Statutes of Ontario, 1993, chapter 10, section 27 and amended by 1997, chapter 28, section 116, is amended by adding the following subsection:

Same

(1.1) The Superintendent may issue guidelines setting out the treatment, services, measures or goods applicable in respect of types of impairments for the purposes of payment of a medical or rehabilitation benefit provided under the Statutory Accident Benefits Schedule, and such guidelines may include conditions, restrictions and limits with respect to such treatment, services, measures or goods.

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

Immunity

268.4 No action or other proceeding for damages may be commenced against any person for an act done or omitted in good faith in conducting an assessment by a designated assessment centre under the Statutory Accident Benefits Schedule.

127. Subsection 282 (11.2) of the Act, as enacted by the Statutes of Ontario, 1993, chapter 10, section 33, is repealed and the following substituted:

Liability of representative for costs

(11.2) An arbitrator may make an order requiring a person representing an insured person or an insurer for compensation in an arbitration proceeding to personally pay all or part of any expenses awarded against a party if the arbitrator is satisfied that,

(a) in respect of a representative of an insured person, the representative commenced or conducted the proceeding without authority from the insured person or did not advise the insured person that he or she could be liable to pay all or part of the expenses of the proceeding;

(b) in respect of a representative of an insured person, the representative caused expenses to be incurred without reasonable cause by advancing a frivolous or vexatious claim on behalf of the insured person; or

(c) the representative caused expenses to be incurred without reasonable cause or to be wasted by unreasonable delay or other default.

Non-application to solicitors

(11.3) Clause (11.2) (a) does not apply to a barrister or solicitor acting in the usual course of the practice of law.

Opportunity to make representations

(11.4) An order under subsection (11.2) shall not be made unless the representative is given a reasonable opportunity to make representations to the arbitrator.

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

Restrictions on who may represent

284.1 (1) Despite section 10 of the Statutory Powers Procedure Act and subject to subsection (2), a party to a proceeding under sections 279 to 284 may not be represented by another person for compensation except in accordance with the regulations and subject to such terms and conditions as may be specified in the regulations.

Non-application to solicitors

(2) This section does not apply to a barrister or solicitor acting in the usual course of the practice of law.

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

Review of this Part

289.1 The Superintendent shall undertake a review of this Part and any regulations made under this Part at least every five years or more often at the request of the Minister and shall recommend any amendments that the Superintendent believes will improve the effectiveness and administration of this Part and the regulations.

130. (1) Subsection 398 (1) of the Act is amended by striking out "Subject to subsection (2)" at the beginning and substituting "Subject to subsections (2) and (3)".

(2) Clause 398 (1) (b) of the Act is repealed and the following substituted:

(b) hold himself, herself or itself out as an adjuster, investigator, consultant or otherwise as an adviser, on behalf of any person having a claim against an insured or an insurer for which indemnity is provided by a motor vehicle liability policy, including a claim for Statutory Accident Benefits.

(3) Section 398 of the Act is amended by adding the following subsection:

Non-application to prescribed persons

(3) Subsection (1) does not apply to a prescribed person or class of persons who comply with prescribed terms and conditions.

131. Subsection 412 (2) of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 21, section 45, is amended by striking out "Commissioner" and substituting "Superintendent".

132. (1) Subsection 413 (3.4.1) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 28, section 128, is repealed and the following substituted:

Hearing by Tribunal

(3.4.1) If an insurer appeals the Superintendent's decision within the 15-day period, the Tribunal shall hold a hearing.

(2) Section 413 of the Act, as amended by the Statutes of Ontario, 1993, chapter 10, section 40, 1996, chapter 21, section 46 and 1997, chapter 28, section 128, is amended by adding the following subsection:

Powers of the Superintendent, etc.

(6) For the purposes of this section, subsections 410 (4), 412 (6) and (7) and 412.1 (2), (3) and (4) apply, with necessary modifications, as if the insurer had made an application under section 410.

Commencement

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

Same

(2) Sections 114 to 123 and 125 to 132 come into force on a day to be named by proclamation of the Lieutenant Governor.

PART XVI
LAND TRANSFER TAX ACT

134. Clause (b) of the definition of "single family residence" in subsection 1 (1) of the Land Transfer Tax Act, as re-enacted by the Statutes of Ontario, 2000, chapter 42, section 67, is amended by striking out "farmlands property class" and substituting "farm property class".

135. (1) Clause 8 (2) (a) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 68, is amended by striking out "farmlands property class" and substituting "farm property class".

(2) Clause 8 (2) (b) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 68, is amended by striking out "that property class" and substituting "the farm property class".

Commencement

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

Same

(2) Sections 134 and 135 come into force on January 1, 2003.

PART XVII
MINING TAX ACT
AND ITS PREDECESSOR

137. (1) Clauses 3 (12) (a) and (b) of the Mining Tax Act are repealed and the following substituted:

(a) the amount calculated in accordance with subsection (12.0.1) if the depreciable property is a processing asset or an asset for transporting processed mineral substances to market from the place where the processing is completed;

(b) the amount calculated in accordance with subsection (12.0.3) if the depreciable property is a mining asset but not a mining asset for which an allowance for depreciation is calculated under clause (c);

(2) Section 3 of the Act, as amended by the Statutes of Ontario, 1992, chapter 4, section 1, 2000, chapter 10, section 21 and 2001, chapter 23, section 151, is amended by adding the following subsections:

Same, processing and transportation assets

(12.0.1) The amount of the operator's allowance for depreciation under clause (12) (a) for a taxation year in respect of assets acquired in the taxation year or in a prior taxation year is the total of all amounts, if any, determined in respect of the assets referred to in that clause, each of which is an amount determined in respect of the assets acquired in the taxation year or a prior taxation year that does not exceed the lesser of,

(a) 15 per cent of the capital cost of the assets acquired in the particular taxation year; and

(b) the undepreciated capital cost, as of the end of the taxation year and before any deduction under subsection (12) is made for the taxation year, of the assets acquired in the particular taxation year.

Same

(12.0.2) In calculating the operator's allowance for depreciation under subsection (12.0.1) for the taxation year, the operator shall determine the lesser of the amounts described in clauses (12.0.1) (a) and (b) in respect of the assets acquired in each particular taxation year and then shall add the resulting amounts, if any, in order to determine the operator's aggregate allowance for depreciation.

Same, certain mining assets

(12.0.3) The amount of the operator's allowance for depreciation under clause (12) (b) for a taxation year in respect of assets acquired in the taxation year or in a prior taxation year is the total of all amounts, if any, determined in respect of the assets referred to in that clause, each of which is an amount determined in respect of the assets acquired in the taxation year or a prior taxation year that does not exceed the lesser of,

(a) 30 per cent of the capital cost of the assets acquired in the particular taxation year and after April 9, 1974 that have not been used previously in mining operations and 15 per cent of the capital cost of any other mining assets acquired in the particular year; and

(b) the undepreciated capital cost, as of the end of the taxation year and before any deduction under subsection (12) is made for the taxation year, of the assets referred to in clause (a).

Same

(12.0.4) In calculating the operator's allowance for depreciation under subsection (12.0.3) for the taxation year, the operator shall determine the lesser of the amounts described in clauses (12.0.3) (a) and (b) in respect of the assets acquired in each particular taxation year and then shall add the resulting amounts, if any, in order to determine the operator's aggregate allowance for depreciation.

Exception

(12.0.5) Despite the re-enactment of clauses (12) (a) and (b) by section 137 of the Keeping the Promise For a Strong Economy Act (Budget Measures), 2002, those clauses, as they read immediately before being re-enacted, continue to apply with respect to an operator for a taxation year commencing after December 31, 1999 if both of the following conditions are satisfied:

1. Before October 30, 2002, the operator files a return under this Act for the taxation year.

2. In the return or in an adjustment to the return that is filed before October 30, 2002, the amount calculated under clause (12) (a) or (b) (as those clauses read immediately before being re-enacted) for the taxation year is based in whole or in part on assets that have been fully depreciated.

138. (1) This section applies despite the repeal of the Mining Tax Act, being chapter 269 of the Revised Statutes of Ontario, 1980, upon the coming into force of the Revised Statutes of Ontario, 1990.

(2) Clauses 3 (6) (a) and (b) of the Mining Tax Act, being chapter 269 of the Revised Statutes of Ontario, 1980, as enacted by the Statutes of Ontario, 1987, chapter 11, section 3, shall be deemed to have been repealed on April 1, 1986 and the following substituted:

(a) the amount calculated in accordance with subsection (6.1) if the depreciable property is a processing asset or an asset for transporting processed mineral substances to market from the place where the processing is completed;

(b) the amount calculated in accordance with subsection (6.3) if the depreciable property is a mining asset but not a mining asset for which an allowance for depreciation is calculated under clause (c);

(3) Section 3 of the Mining Tax Act, being chapter 269 of the Revised Statutes of Ontario, 1980, as amended by the Statutes of Ontario, 1987, chapter 11, section 3 and 1988, chapter 43, section 2, shall be deemed to have been amended on April 1, 1986 by adding the following subsections:

Same, certain processing assets

(6.1) The amount of the operator's allowance for depreciation under clause (6) (a) for a taxation year in respect of assets acquired in the taxation year or in a prior taxation year is the total of all amounts, if any, determined in respect of the assets referred to in that clause, each of which is an amount determined in respect of the assets acquired in the taxation year or a prior taxation year that does not exceed the lesser of,

(a) 15 per cent of the capital cost of the assets acquired in the particular taxation year; and

(b) the undepreciated capital cost, at the end of the taxation year and before any deduction under subsection (6) is made for the taxation year, of the assets acquired in the particular taxation year.

Same

(6.2) In calculating the operator's allowance for depreciation under subsection (6.1) for the taxation year, the operator shall determine the lesser of the amounts described in clauses (6.1) (a) and (b) in respect of the assets acquired in each particular taxation year and then shall add the resulting amounts, if any, in order to determine the operator's aggregate allowance for depreciation.

Same, certain mining assets

(6.3) The amount of the operator's allowance for depreciation under clause (6) (b) for a taxation year in respect of assets acquired in the taxation year or in a prior taxation year is the total of all amounts, if any, determined in respect of the assets referred to in that clause, each of which is an amount determined in respect of the assets acquired in the taxation year or a prior taxation year that does not exceed the lesser of,

(b) the undepreciated capital cost, as of the end of the taxation year and before any deduction under subsection (6) is made for the taxation year, of the assets referred to in clause (a).

Same

(6.4) In calculating the operator's allowance for depreciation under subsection (6.3) for the taxation year, the operator shall determine the lesser of the amounts described in clauses (6.3) (a) and (b) in respect of the assets acquired in each particular taxation year and then shall add the resulting amounts, if any, in order to determine the operator's aggregate allowance for depreciation.

(4) The amendments to section 3 of the Act that are made by subsections (2) and (3) apply in respect of taxation years ending after March 31, 1986 and before the coming into force of the Revised Statutes of Ontario, 1990.

Commencement

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

Same

(2) Section 137 shall be deemed to have come into force on December 31, 1991.

PART XVIII
MINISTRY OF REVENUE ACT

140. Section 11 of the Ministry of Revenue Act is amended by adding the following subsection:

Cancellation of remission

(10) Order in Council number 962/2002, made on April 2, 2002 by the Lieutenant Governor in Council under this section, is hereby revoked and the remission of taxes that was granted by the Order in Council to the Toronto Blue Jays Baseball Club and to Ontario teams other than the Toronto Blue Jays Baseball Club that are members of a professional sports league shall be deemed not to have been granted.

Commencement

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

PART XIX
MINISTRY OF TREASURY
AND ECONOMICS ACT

142. (1) Clause 13 (2) (d) of the Ministry of Treasury and Economics Act, as enacted by the Statutes of Ontario, 2002, chapter 8, Schedule D, section 3, is repealed and the following substituted:

(d) subject to subsection (2.2), any other information that is required, under another Act of the Legislature, to be included in the Public Accounts.

(2) Section 13 of the Act, as re-enacted by the Statutes of Ontario, 2002, chapter 8, Schedule D, section 3, is amended by adding the following subsections:

Same, additional information

(2.1) The Public Accounts may include such other information as the Treasurer considers necessary.

Same, information required under other Acts

(2.2) If information is required, under another Act of the Legislature, to be included in the Public Accounts for a fiscal year, that requirement shall be deemed to have been met if the information is included in the financial information supplementary to the Public Accounts that is laid before the Assembly in accordance with subsection (4).

Commencement

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

PART XX
MOTOR VEHICLE
ACCIDENT CLAIMS ACT

144. Section 2 of the Motor Vehicle Accident Claims Act is amended by adding the following subsections:

Assessment

(6) The Lieutenant Governor in Council may assess insurers within a prescribed class of insurers for amounts paid out of the Fund under section 6.1 and for all expenses and expenditures incurred in respect of the Fund in relation to section 6.1.

Determination of share

(7) If an assessment is made under subsection (6), the share of the assessment in respect of a class of insurer and the share of the assessment payable by an insurer shall be determined in the manner prescribed by regulation.

Insurer to pay

(8) An insurer shall pay the amount assessed against it under subsection (6).

Crown may recover

(9) If an insurer does not pay the assessment, the unpaid amount of the assessment is a debt due to the Crown and the Crown may recover the debt by action or by any other remedy or procedure available by law to the Crown for the collection of debts owed to the Crown, whether or not the Superintendent exercises the rights set out in subsection (10).

Cancellation or suspension

(10) If an insurer fails to pay an assessment made under subsection (6), the Superintendent may suspend or cancel the insurer's licence issued under the Insurance Act.

Revival of licence

(11) The Superintendent may revive the licence of an insurer whose licence was suspended or cancelled under subsection (10) if the insurer pays the amount owing on the assessment.

Definition

(12) In this section,

"insurer" means an insurer as defined in the Insurance Act.

145. (1) Subsection 6 (1) of the Act is repealed and the following substituted:

Statutory accident benefits

(1) Any person who has recourse against the Fund for statutory accident benefits under section 268 of the Insurance Act may make application, in a form approved by the Superintendent, for the payment of benefits out of the Fund.

(2) Section 6 of the Act, as amended by the Statutes of Ontario, 1993, chapter 10, section 54 and 1993, chapter 27, Schedule, is amended by adding the following subsection:

Accidents outside Ontario

(3.1) Subject to section 6.1, no payment out of the Fund shall be made in respect of statutory accident benefits if the accident from which the entitlement to statutory accident benefits arose occurred outside Ontario.

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

Benefits payable as a result of winding-up
order

6.1 (1) If a winding-up order is made in respect of an insurer under the Winding-up and Restructuring Act (Canada) and statutory accident benefits are payable out of the Fund pursuant to section 268.0.1 of the Insurance Act, any person entitled to the benefits may make application, in a form approved by the Superintendent, for payment out of the Fund of the benefits.

Rights and obligations of Fund

(2) If an application is made under subsection (1),

(a) the Fund has the same rights and obligations with respect to the statutory accident benefits payable out of the Fund as the insurer that was subject to the winding-up order; and

(b) the person entitled to the statutory accident benefits shall be deemed to have assigned to the Minister all of his or her rights against the insurer that was subject to the winding-up order.

Payment

(3) The Minister shall make payment out of the Fund of the amounts owing to a person who makes an application under subsection (1).

Release

(4) A release under section 274 of the Insurance Act does not affect an assignment under clause (2) (b).

Application of subs. 23 (6)

(5) Subsection 23 (6) does not apply to payments under this section.

No need for designation

(6) This section applies whether or not the insurer that was subject to the winding-up order is a designated insurer.

Not retrospective

(7) This section only applies to a winding-up order made after this section comes into force.

147. Section 25 of the Act is repealed and the following substituted:

Payments to non-residents

25. (1) The Minister shall not pay out of the Fund any amount in favour of a person who ordinarily resides in a jurisdiction outside Ontario unless that jurisdiction provides persons who ordinarily reside in Ontario with recourse of a substantially similar character to that provided by this Act.

Same

(2) The total amount paid out of the Fund in favour of a person who ordinarily resides in a jurisdiction outside Ontario shall not exceed the amount that would be payable in equivalent circumstances under the law of that jurisdiction to a person who ordinarily resides in Ontario.

Application

(3) This section does not apply to payments made under section 6.1.

Interpretation

(4) For the purpose of this section, residence shall be determined as of the date of the motor vehicle accident as a result of which the payment out of the Fund is claimed.

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

Minister may require information

27.1 The Minister may require a person who has a cause of action against the Superintendent or against the owner or driver of a motor vehicle that may be uninsured to,

(a) provide the Minister with the information prescribed by the regulations within the time period prescribed by the regulations;

(b) at the Minister's expense, undergo examinations by one or more persons selected by the Minister who are members of Colleges within the meaning of the Regulated Health Professions Act, 1991;

(c) provide the Minister with a statutory declaration describing the circumstances surrounding the incident and the nature of the claim being made;

(d) provide the Minister with evidence of the person's identity;

(e) provide the Minister with a copy of any notice and information provided under subsection 258.3 (1) of the Insurance Act.

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

Offences

29. (1) Every person is guilty of an offence who,

(a) knowingly makes a false or misleading statement or representation in connection with the person's entitlement to a benefit or payment under this Act to the Minister, the Superintendent or an employee or agent of the Ministry whose duties relate to this Act;

(b) wilfully fails to inform the Superintendent or an employee or agent of the Ministry whose duties relate to this Act of a material change in circumstances in connection with the person's entitlement to a benefit or payment under this Act within 14 days of the material change; or

(c) knowingly makes a false or misleading statement or representation in order to obtain payment from the Fund for goods or services.

Penalty

(2) On conviction for an offence under this section, the person convicted is liable on a first conviction to a fine of not more than $100,000 and on each subsequent conviction to a fine of not more than $200,000.

Regulations

30. The Lieutenant Governor in Council may make regulations,

(a) prescribing classes of insurers to be assessed under section 2, the manner of determining the amounts to be assessed, and the manner of determining the share of a class of insurers and of an insurer;

(b) prescribing information to be provided to the Minister under section 27.1 and the period within which information is to be provided to the Minister.

Commencement

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

PART XXI
MUNICIPAL ACT, 2001

151. (1) Section 306 of the Municipal Act, 2001 is amended by adding the following definition:

"residential property class" means the residential property class prescribed under the Assessment Act; ("catégorie des biens résidentiels")

(2) The definition of "residential/farm property class" in section 306 of the Act is repealed.

152. (1) Subsection 308 (3) of the Act is repealed and the following substituted:

What tax ratios are

(3) The tax ratios are the ratios that the tax rate for each property class must be to the tax rate for the residential property class where the residential property class tax ratio is 1.

(2) Subsection 308 (6) of the Act is amended by striking out "the residential/farm property class, the farmlands property class" and substituting "the residential property class, the farm property class".

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

Restrictions, tax ratios for certain property
classes

308.1 (1) This section applies despite subsections 308 (4), (5), (8), (9) and (10).

Managed forests property class

(2) The tax ratio for the managed forests property class prescribed under the Assessment Act is 0.25.

Farm property class

(3) The tax ratio for the farm property class prescribed under the Assessment Act is 0.25 or such lower tax ratio as the upper-tier municipality or single-tier municipality may establish.

Same, single-tier municipality

(4) A single-tier municipality that intends to apply a tax ratio of less than 0.25 to the farm property class for a tax year shall pass a by-law on or before April 30 of the year, or such later date as the Minister of Finance may specify by regulation, to establish the tax ratio for the farm property class for that year for the municipality.

Same, upper-tier municipality

(5) An upper-tier municipality that intends to apply a tax ratio of less than 0.25 to the farm property class for a tax year shall pass a by-law on or before April 30 of the year, or such later date as the Minister of Finance may specify by regulation, to establish the tax ratio for that year for the farm property class for the upper-tier municipality and its lower-tier municipalities.

Regulations

(6) The Minister of Finance may, by regulation, specify dates for the purposes of subsection (4) or (5) for a tax year and such a regulation may be made before, on or after the date that would otherwise apply in the circumstances.

154. Paragraph 7 of subsection 318 (9) of the Act is repealed and the following substituted:

7. For the purposes of paragraph 6, the residential property class, the farm property class and the managed forests property class shall be treated as a single property class.

155. Subsection 319 (1) of the Act is amended by striking out "residential/farm property class" in the portion before clause (a) and substituting "residential property class".

156. Clause 327 (5) (g) of the Act is repealed and the following substituted:

(g) property classified in the residential property class, the farm property class, the managed forests property class or the pipe line property class.

157. (1) Subsection 331 (11) of the Act is amended by adding "or the local municipality" after "The owner of an eligible property".

(2) Subsection 331 (12) of the Act is amended by adding "or the local municipality" after "the owner of the eligible property".

158. Clause 357 (1) (d) of the Act is repealed and the following substituted:

(d) during the year or during the preceding year after the return of the assessment roll, a building on the land,

(i) was razed by fire, demolition or otherwise, or

(ii) was damaged by fire, demolition or otherwise so as to render it substantially unusable for the purposes for which it was used immediately prior to the damage;

(d.1) the applicant is unable to pay taxes because of sickness or extreme poverty;

159. (1) Subsection 361 (1) of the Act is repealed and the following substituted:

Rebates for charities

(1) Every municipality, other than a lower-tier municipality, shall have a tax rebate program for eligible charities for the purposes of giving them relief from taxes or amounts paid on account of taxes on eligible property they occupy.

(2) Paragraph 1 of subsection 361 (3) of the Act is amended by striking out "pays taxes" and substituting "pays taxes or amounts on account of taxes".

(3) Paragraph 2 of subsection 361 (3) of the Act is repealed and the following substituted:

2. The amount of a rebate required under paragraph 1 must be at least 40 per cent, or such other percentage as the Minister of Finance may prescribe, of the taxes or amounts on account of taxes paid by the eligible charity on the property it occupies. If the eligible charity is required to pay an amount under section 367 or 368, the amount of the rebate shall be the total of the amounts paid by the eligible charity under those sections.

(4) Paragraph 4 of subsection 361 (3) of the Act is amended by striking out "the taxes payable by the eligible charity" and substituting "the taxes or amounts on account of taxes payable by the eligible charity".

(5) Paragraph 5 of subsection 361 (3) of the Act is amended by striking out "the taxes paid by the charity" and substituting "the taxes or amounts on account of taxes paid by the charity".

(6) Paragraph 2 of subsection 361 (4) of the Act is repealed and the following substituted:

2. The program may provide for rebates to eligible charities or similar organizations for taxes or amounts on account of taxes on property that is in any class of real property prescribed under the Assessment Act.

(7) Subsection 361 (7) of the Act is repealed and the following substituted:

Sharing amounts of rebates

(7) The amount of a rebate paid under this section on a property shall be shared by the municipalities and school boards that share in the revenue from the taxes on the property in the same proportion as the municipalities and school boards share in those revenues.

160. Subsection 364 (3) of the Act is repealed and the following substituted:

Mixed use

(3) If a portion of a property is classified on the assessment roll in any of the commercial classes and another portion of the property is classified in any of the industrial classes, the portion classified in the commercial classes shall be deemed to be one property and the portion classified in the industrial classes shall be deemed to be another property for the purposes of this section.

161. The definition of "eligible property" in subsection 365 (6) of the Act is repealed and the following substituted:

"eligible property" means a property classified in the residential property class, the farm property class or the managed forests property class.

Commencement

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

Same

(2) Sections 151 to 161 come into force on January 1, 2003.

PART XXII
MUNICIPAL TAX ASSISTANCE ACT

163. The definition of "Board" in section 1 of the Municipal Tax Assistance Act is repealed.

Commencement

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

PART XXIII
NORTHERN SERVICES
BOARDS ACT

165. (1) Section 51 of the Northern Services Boards Act, as enacted by the Statutes of Ontario, 1998, chapter 16, section 10, is amended by adding the following definition:

"residential property class" means the residential property class prescribed under the Assessment Act; ("catégorie des biens résidentiels")

(2) The definition of "residential/farm property class" in section 51 of the Act, as enacted by the Statutes of Ontario, 1998, chapter 16, section 10, is repealed.

166. (1) Subsection 52 (2) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 16, section 10, is amended by striking out "residential/farm property class" wherever it appears and substituting in each case "residential property class".

(2) Subsection 52 (4) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 16, section 10, is amended by striking out "the residential/farm property class, the farmlands property class" and substituting "the residential property class, the farm property class".

(3) Subsection 52 (14) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 16, section 10, is amended by striking out "farmlands property class" and substituting "farm property class".

Commencement

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

Same

(2) Sections 165 and 166 come into force on January 1, 2003.

PART XXIV
ONTARIO MUNICIPAL ECONOMIC INFRASTRUCTURE FINANCING
AUTHORITY ACT, 2002

Schedule A

168. The Ontario Municipal Economic Infrastructure Financing Authority Act, 2002, as set out in Schedule A to this Act, is hereby enacted.

Commencement

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

PART XXV
RETAIL SALES TAX ACT

170. (1) Clauses (c) and (d) of the definition of "taxable service" in subsection 1 (1) of the Retail Sales Tax Act, as amended by the Statutes of Ontario, 1994, chapter 13, section 1, are repealed and the following substituted:

(c) labour provided to install, assemble, dismantle, adjust, repair or maintain tangible personal property other than a computer program,

(c.1) labour provided to install, configure, modify or upgrade a computer program, as those words are defined by the Minister, where there is a sale of the labour on or after July 19, 2002,

(d) any contract for the service, maintenance or warranty of tangible personal property other than a computer program,

(d.1) any contract entered into on or after July 19, 2002 for the service, maintenance or warranty of a computer program, as those expressions are defined by the Minister, or

(2) Paragraph 4 of subsection 1 (3) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 10, section 30, is repealed and the following substituted:

4. Pre-written programs.

171. (1) Subsection 2 (3) of the Act, as amended by the Statutes of Ontario, 1994, chapter 13, section 2, is amended by striking out "described in clause (a), (c), (d) or (e)" and substituting "other than a taxable service described in clause (b)".

(2) Subsection 2 (9) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 13, section 2, is amended by striking out "taxable service" wherever it appears and substituting in each case "any service".

(3) Subsection 2 (16) of the Act, as amended by the Statutes of Ontario, 1992, chapter 13, section 1, 1993, chapter 12, section 2, 1994, chapter 13, section 2 and 1996, chapter 29, section 24, is repealed and the following substituted:

Refund by vendor

(16) Despite subsection (11), a vendor may refund to a purchaser from whom the vendor has collected tax the whole or a part of such tax, as the case requires,

(a) if any of the circumstances described in subsection (16.0.1) exist; and

(b) if the refund is made within four years following the sale with respect to which the tax being refunded was collected.

Same

(16.0.1) The following are the circumstances in which a vendor may refund to a purchaser all or part of the tax collected by the vendor from the purchaser:

1. The tax payable and collected, or the purchase price charged, was overstated by reason of a clerical or arithmetical error in computation.

2. The purchaser acquired from the vendor the goods on which a refund of tax is sought for the purpose of reselling the goods, and after the sale and before the refund is made provides the vendor with a proper purchase exemption certificate with respect to the goods.

3. The price paid for the tangible personal property, taxable service or as the price of admission is subsequently reduced and the amount of the reduction refunded or credited to the purchaser.

4. The refund made is with respect to a class of transactions prescribed by the Minister for the purpose of this subsection or has been authorized by the Minister in writing before the refund is made.

Deduction by vendor from amount remitted

(16.0.2) The vendor may deduct from a subsequent remittance of tax under this Act the amount of a refund to a purchaser made in accordance with subsection (16) if the vendor takes the deduction within four years from the date of the refund to the purchaser.

Same

(16.0.3) Despite subsection (16.0.2), a vendor may not deduct the amount of a refund to a purchaser from a subsequent remittance to a person authorized under subsection 11 (1) to collect the tax from the vendor.

Same

(16.0.4) If subsection (16.0.3) applies with respect to a vendor, the Minister may refund to the vendor the amount of a refund to a purchaser referred to in subsection (16).

172. (1) Subparagraph 2 viii of subsection 7 (1) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 10, section 32, is repealed.

(2) Subsection 7 (1) of the Act, as amended by the Statutes of Ontario, 1992, chapter 13, section 4, 1994, chapter 13, section 9, 1996, chapter 29, section 26, 1997, chapter 10, section 32, 1997, chapter 41, section 125, 1998, chapter 5, section 45, 1999, chapter 9, section 184, 2000, chapter 10, section 28, 2000, chapter 42, section 93, 2001, chapter 8, section 230, 2001, chapter 23, section 192 and 2002, chapter 8, Schedule J, section 2, is amended by adding the following paragraph:

2.0.1 Taxable services that are described in clause (c.1) or (d.1) of the definition of "taxable service" in subsection 1 (1),

i. that are provided in respect of a computer program that may be purchased exempt from tax under paragraph 62, or

ii. that are provided by a person for the person's own consumption or use.

(3) Paragraph 68 of subsection 7 (1) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 8, Schedule J, section 2, is repealed and the following substituted:

68. Reinforced concrete, as defined by the Minister, used in the construction of a structure to be used by a manufacturer directly in the manufacture or production of tangible personal property, but only on such terms and conditions as the Minister may prescribe.

173. Section 9 of the Act, as amended by the Statutes of Ontario, 1992, chapter 13, section 5, 1996, chapter 29, section 27, 1997, chapter 43, Schedule D, section 5 and 1998, chapter 5, section 46, is amended by adding the following subsection:

Exemption from tax re water and sewage works

(6) The tax imposed by subsection 2 (1) or section 4.2 is not payable by a municipality (within the meaning of the Municipal Water and Sewage Transfer Act, 1997) on the acquisition of tangible personal property as a result of the transfer of a water or sewage works or related assets pursuant to the Municipal Water and Sewage Transfer Act, 1997.

174. Subsection 11 (1) of the Act is repealed and the following substituted:

Other authorized collectors

(1) The Minister may in writing authorize any person who is not a vendor or any class of persons who are not vendors to collect from purchasers or consumers the tax imposed by this Act or to collect from vendors the tax collectible under this Act.

Scope of authorization

(1.1) An authorization under subsection (1) may limit the time during which the authority conferred is exercisable and may limit the class or type of purchaser, consumer or vendor from whom the tax may be collected.

Status of authorized person

(1.2) A person authorized under subsection (1) to collect tax acts as agent of the Minister when collecting the tax.

175. Subsection 14 (2) of the Act, as amended by the Statutes of Ontario, 1994, chapter 13, section 8, is repealed and the following substituted:

Exception re deduction from amount remitted

(2) Despite subsection (1), a vendor may not deduct the compensation referred to in subsection (1) from the amount remitted to a person authorized under subsection 11 (1) to collect taxes from the vendor.

Same

(2.1) If subsection (2) applies with respect to a vendor, the Minister may pay to the vendor the compensation referred to in subsection (1).

Commencement

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

Same

(2) Section 170 and subsections 171 (1) and (2) and 172 (1) and (2) shall be deemed to have come into force on July 19, 2002.

Same

(3) Subsection 171 (3) and sections 174 and 175 come into force on January 1, 2003.

Same

(4) Subsection 172 (3) shall be deemed to have come into force on June 18, 2002.

Same

(5) Section 173 shall be deemed to have come into force on May 27, 1997.

PART XXVI
SECURITIES ACT

177. (1) Subsection 1 (1) of the Securities Act, as amended by the Statutes of Ontario, 1994, chapter 11, section 350, 1994, chapter 33, section 1, 1997, chapter 19, section 23, 1999, chapter 6, section 60, 1999, chapter 9, section 193 and 2001, chapter 23, section 209, is amended by adding the following definitions:

"investment fund" means a mutual fund or a non-redeemable investment fund; ("fonds d'investissement")

"investment fund manager" means a person or company who has the power and exercises the responsibility to direct the affairs of an investment fund; ("gestionnaire de fonds d'investissement")

(2) The definitions of "material change", "material fact" and "mutual fund" in subsection 1 (1) of the Act are repealed and the following substituted:

"material change",

(a) when used in relation to an issuer other than an investment fund, means,

(i) a change in the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the issuer, or

(ii) a decision to implement a change referred to in subclause (i) made by the board of directors or other persons acting in a similar capacity or by senior management of the issuer who believe that confirmation of the decision by the board of directors or such other persons acting in a similar capacity is probable, and

(b) when used in relation to an issuer that is an investment fund, means,

(i) a change in the business, operations or affairs of the issuer that would be considered important by a reasonable investor in determining whether to purchase or continue to hold securities of the issuer, or

(ii) a decision to implement a change referred to in subclause (i) made,

(A) by the board of directors of the issuer or the board of directors of the investment fund manager of the issuer or other persons acting in a similar capacity,

(B) by senior management of the issuer who believe that confirmation of the decision by the board of directors or such other persons acting in a similar capacity is probable, or

(C) by senior management of the investment fund manager of the issuer who believe that confirmation of the decision by the board of directors of the investment fund manager of the issuer or such other persons acting in a similar capacity is probable; ("changement important")

"material fact", when used in relation to securities issued or proposed to be issued, means a fact that would reasonably be expected to have a significant effect on the market price or value of the securities; ("fait important")

"mutual fund" includes,

(a) an issuer,

(i) whose primary purpose is to invest money provided by its security holders, and

(ii) whose securities entitle the holder to receive on demand, or within a specified period after demand, an amount computed by reference to the value of a proportionate interest in the whole or in part of the net assets, including a separate fund or trust account, of the issuer, or

(b) an issuer or a class of issuers that is designated as a mutual fund by an order of the Commission in the case of a single issuer or otherwise in a regulation which is made for the purposes of this definition,

but does not include an issuer or a class of issuer that is designated not to be a mutual fund by an order of the Commission in the case of a single issuer or otherwise in a regulation which is made for the purposes of this definition; ("fonds mutuel")

(3) Subsection 1 (1.1) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 33, section 1, is repealed and the following substituted:

Same

(1.1) For the purposes of this Act, the regulations and the rules, any of "derivatives", "disclosure controls and procedures", "future-oriented financial information", "going private transaction", "insider bid", "internal controls", "non-redeemable investment fund", "penny stocks", "related party transactions" and "reverse take-overs" may be defined in the regulations or the rules and if so defined shall have the defined meaning.

178. Subsection 3.4 (2) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 10, section 37, is repealed and the following substituted:

Exceptions

(2) The Commission shall pay into the Consolidated Revenue Fund money received by the Commission pursuant to an order under paragraph 9 or 10 of subsection 127 (1) of this Act or paragraph 9 or 10 of subsection 60 (1) of the Commodity Futures Act or as a payment to settle enforcement proceedings commenced by the Commission, other than money,

(a) to reimburse the Commission for costs incurred or to be incurred by it; or

(b) that is designated under the terms of the order or settlement for an allocation to or for the benefit of third parties that is approved by the Minister or that belongs to a class of allocations approved by the Minister.

179. Part VII of the Act is amended by adding the following section:

Continuous disclosure reviews

20.1 (1) The Commission or any member, employee or agent of the Commission may conduct a review of the disclosures that have been made or that ought to have been made by a reporting issuer or mutual fund in Ontario, on a basis to be determined at the discretion of the Commission or the Director.

Information and documents

(2) A reporting issuer or mutual fund in Ontario that is subject to a review under this section shall, at such time or times as the Commission or Director may require, deliver to the Commission or Director any information and documents relevant to the disclosures that have been made or that ought to have been made by the reporting issuer or mutual fund.

Freedom of Information and Protection of Privacy Act

(3) Despite the Freedom of Information and Protection of Privacy Act, information and documents obtained pursuant to a review under this section are exempt from disclosure under that Act if the Commission determines that the information and documents should be maintained in confidence.

Prohibition on certain representations

(4) A reporting issuer or mutual fund in Ontario, or any person or company acting on behalf of a reporting issuer or mutual fund in Ontario, shall not make any representation, written or oral, that the Commission has in any way passed upon the merits of the disclosure record of the reporting issuer or mutual fund.

180. (1) Clauses 75 (3) (a) and (b) of the Act are repealed and the following substituted:

(a) in the opinion of the reporting issuer, and if that opinion is arrived at in a reasonable manner, the disclosure required by subsection (2) would be unduly detrimental to the interests of the reporting issuer; or

(b) the material change consists of a decision to implement a change made by senior management of the issuer who believe that confirmation of the decision by the board of directors is probable and senior management of the issuer has no reason to believe that persons with knowledge of the material change have made use of that knowledge in purchasing or selling securities of the issuer,

(2) Section 75 of the Act, as amended by the Statutes of Ontario, 1994, chapter 11, section 349, is amended by adding the following subsection:

Same

(5) Although a report has been filed with the Commission under subsection (3), the reporting issuer shall promptly generally disclose the material change in the manner referred to in subsection (1) upon the reporting issuer becoming aware, or having reasonable grounds to believe, that persons or companies are purchasing or selling securities of the reporting issuer with knowledge of the material change that has not been generally disclosed.

181. (1) Subsection 122 (1) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 11, section 373, is amended by striking out the portion after clause (c) and substituting the following:

is guilty of an offence and on conviction is liable to a fine of not more than $5 million or to imprisonment for a term of not more than five years less a day, or to both.

(2) Subsection 122 (3) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 11, section 373, is amended by striking out "to a fine of not more than $1,000,000 or to imprisonment for a term of not more than two years, or to both" at the end and substituting "to a fine of not more than $5 million or to imprisonment for a term of not more than five years less a day, or to both".

(3) Clause 122 (4) (a) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 11, section 373, is repealed and the following substituted:

(a) $5 million; and

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

Fraud and market manipulation

126.1 A person or company shall not, directly or indirectly, engage or participate in any act, practice or course of conduct relating to securities or derivatives of securities that the person or company knows or reasonably ought to know,

(a) results in or contributes to a misleading appearance of trading activity in, or an artificial price for, a security or derivative of a security; or

(b) perpetrates a fraud on any person or company.

Misleading or untrue statements

126.2 A person or company shall not make a statement that the person or company knows or reasonably ought to know,

(b) significantly affects, or would reasonably be expected to have a significant effect on, the market price or value of a security.

183. (1) Subsection 127 (1) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 11, section 375 and amended by 1999, chapter 9, section 215, is amended by adding the following paragraphs:

9. If a person or company has not complied with Ontario securities law, an order requiring the person or company to pay an administrative penalty of not more than $1 million for each failure to comply.

10. If a person or company has not complied with Ontario securities law, an order requiring the person or company to disgorge to the Commission any amounts obtained as a result of the non-compliance.

(2) Section 127 of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 11, section 375 and amended by 1999, chapter 9, section 215, is amended by adding the following subsection:

Disgorgement order

(3.1) A person or company is not entitled to participate in a proceeding in which an order may be made under paragraph 10 of subsection (1) solely on the basis that the person or company has a right of action against the respondent to the proceeding or the person or company may be entitled to receive any amount disgorged under the order.

184. Part XXII of the Act is amended by adding the following section:

Directors and officers

129.2 For the purposes of this Act, if a company or a person other than an individual has not complied with Ontario securities law, a director or officer of the company or person who authorized, permitted or acquiesced in the non-compliance shall be deemed to also have not complied with Ontario securities law, whether or not any proceeding has been commenced against the company or person under Ontario securities law or any order has been made against the company or person under section 127.

185. The Act is amended by adding the following Part:

PART XXIII.1
CIVIL LIABILITY
FOR SECONDARY MARKET
DISCLOSURE

Interpretation and Application

Definitions

138.1 In this Part,

"compensation" means compensation received during the 12-month period immediately preceding the day on which the misrepresentation was made or on which the failure to make timely disclosure first occurred, together with the fair market value of all deferred compensation including, without limitation, options, pension benefits and stock appreciation rights, granted during the same period, valued as of the date that such compensation is awarded; ("rémunération")

"control person" means,

(a) a person or company who holds a sufficient number of the voting rights attached to all outstanding voting securities of an issuer, or

(b) each person or company or combination of persons or companies acting in concert by virtue of an agreement, arrangement, commitment or understanding, which holds in total a sufficient number of the voting rights attached to all outstanding voting securities of an issuer,

to affect materially the control of the issuer, and, where a person or company, or combination of persons or companies, holds more than 20 per cent of the voting rights attached to all outstanding voting securities of an issuer, the person or company, or combination of persons or companies, shall, in the absence of evidence to the contrary, be deemed to hold a sufficient number of the voting rights to affect materially the control of the issuer; ("personne qui a le contrôle")

"core document" means,

(a) where used in relation to,

(i) a director of a responsible issuer who is not also an officer of the responsible issuer,

(ii) an influential person, other than an officer of the responsible issuer or an investment fund manager where the responsible issuer is an investment fund, or

(iii) a director or officer of an influential person, other than an officer of an investment fund manager, who is not also an officer of the responsible issuer,

a prospectus, a take-over bid circular, an issuer bid circular, a directors' circular, a rights offering circular, management's discussion and analysis, an annual information form, an information circular, and annual financial statements of the responsible issuer, or

(b) where used in relation to,

(i) an officer of the responsible issuer,

(ii) an investment fund manager where the responsible issuer is an investment fund, or

(iii) an officer of an investment fund manager where the responsible issuer is an investment fund,

a prospectus, a take-over bid circular, an issuer bid circular, a directors' circular, a rights offering circular, management's discussion and analysis, an annual information form, an information circular, annual financial statements, interim financial statements, and a report required by subsection 75 (2), of the responsible issuer, and

"document" means any written communication, including a communication prepared and transmitted only in electronic form,

(a) that is required to be filed with the Commission, or

(b) that is not required to be filed with the Commission and,

(i) that is filed with the Commission,

(ii) that is filed or required to be filed with a government or an agency of a government under applicable securities or corporate law or with any stock exchange or quotation and trade reporting system under its by-laws, rules or regulations, or

(iii) that is any other communication the content of which would reasonably be expected to affect the market price or value of a security of the responsible issuer; ("document")

"expert" means a person or company whose profession gives authority to a statement made in a professional capacity by the person or company including, without limitation, an accountant, actuary, appraiser, auditor, engineer, financial analyst, geologist or lawyer; ("expert")

"failure to make timely disclosure" means a failure to disclose a material change in the manner and at the time required under this Act; ("non-respect des obligations d'information occasionnelle")

"forward-looking information" means all disclosure regarding possible events, conditions or results (including future-oriented financial information with respect to prospective results of operations, a prospective financial position or prospective changes in financial position that is based on assumptions about future economic conditions and courses of action) that is presented as either a forecast or a projection; ("information prospective")

"influential person" means, in respect of a responsible issuer,

(a) a control person,

(b) a promoter,

(d) an investment fund manager, if the responsible issuer is an investment fund; ("personne influente")

"issuer's security" means a security of a responsible issuer and includes a security,

(a) the market price or value of which, or payment obligations under which, are derived from or based on a security of the responsible issuer, and

(b) which is created by a person or company on behalf of the responsible issuer or is guaranteed by the responsible issuer; ("valeur mobilière d'un émetteur")

"liability limit" means,

(a) in the case of a responsible issuer, the greater of,

(i) 5 per cent of its market capitalization (as such term is defined in the regulations), and

(ii) $1 million,

(b) in the case of a director or officer of a responsible issuer, the greater of,

(i) $25,000, and

(ii) 50 per cent of the aggregate of the director's or officer's compensation from the responsible issuer and its affiliates,

(i) 5 per cent of its market capitalization (as defined in the regulations), and

(ii) $1 million,

(d) in the case of an influential person who is an individual, the greater of,

(i) $25,000, and

(ii) 50 per cent of the aggregate of the influential person's compensation from the responsible issuer and its affiliates,

(e) in the case of a director or officer of an influential person, the greater of,

(i) $25,000, and

(ii) 50 per cent of the aggregate of the director's or officer's compensation from the influential person and its affiliates,

(f) in the case of an expert, the greater of,

(i) $1 million, and

(ii) the revenue that the expert and the affiliates of the expert have earned from the responsible issuer and its affiliates during the 12 months preceding the misrepresentation, and

(g) in the case of each person or company who made a public oral statement, other than an individual under clause (a), (b), (c), (d), (e) or (f), the greater of,

(i) $25,000, and

(ii) 50 per cent of the aggregate of the person or company's compensation from the responsible issuer and its affiliates; ("limite de responsabilité")

"management's discussion and analysis" means the section of an annual information form, annual report or other document that contains management's discussion and analysis of the financial condition and results of operations of a responsible issuer as required under Ontario securities law; ("rapport de gestion")

"public oral statement" means an oral statement made in circumstances in which a reasonable person would believe that information contained in the statement will become generally disclosed; ("déclaration orale publique")

"release" means, with respect to information or a document, to file with the Commission or any other securities regulatory authority in Canada or a stock exchange or to otherwise make available to the public; ("publication", "publier")

"responsible issuer" means,

(a) a reporting issuer, or

(b) any other issuer with a substantial connection to Ontario, any securities of which are publicly traded; ("émetteur responsable")

"trading day" means a day during which the principal market (as defined in the regulations) for the security is open for trading. ("jour de Bourse")

Application

138.2 This Part does not apply to,

(a) the acquisition of an issuer's security under a prospectus;

(b) the acquisition of an issuer's security pursuant to an exemption from section 53 or 62, except as may be prescribed by regulation;

(c) the acquisition or disposition of an issuer's security in connection with or pursuant to a take-over bid or issuer bid, except as may be prescribed by regulation; or

(d) such other transactions or class of transactions as may be prescribed by regulation.

Liability

Liability for secondary market
disclosure
Documents released by responsible issuer

138.3 (1) Where a responsible issuer or a person or company with actual, implied or apparent authority to act on behalf of a responsible issuer releases a document that contains a misrepresentation, a person or company who acquires or disposes of an issuer's security during the period between the time when the document was released and the time when the misrepresentation contained in the document was publicly corrected has, without regard to whether the person or company relied on the misrepresentation, a right of action for damages against,

(a) the responsible issuer;

(b) each director of the responsible issuer at the time the document was released;

(d) each influential person, and each director and officer of an influential person, who knowingly influenced,

(i) the responsible issuer or any person or company on behalf of the responsible issuer to release the document, or

(ii) a director or officer of the responsible issuer to authorize, permit or acquiesce in the release of the document; and

(e) each expert where,

(i) the misrepresentation is also contained in a report, statement or opinion made by the expert,

(ii) the document includes, summarizes or quotes from the report, statement or opinion of the expert, and

(iii) if the document was released by a person or company other than the expert, the expert consented in writing to the use of the report, statement or opinion in the document.

Public oral statements by responsible issuer

(2) Where a person with actual, implied or apparent authority to speak on behalf of a responsible issuer makes a public oral statement that relates to the business or affairs of the responsible issuer and that contains a misrepresentation, a person or company who acquires or disposes of an issuer's security during the period between the time when the public oral statement was made and the time when the misrepresentation contained in the public oral statement was publicly corrected has, without regard to whether the person or company relied on the misrepresentation, a right of action for damages against,

(a) the responsible issuer;

(b) the person who made the public oral statement;

(c) each director and officer of the responsible issuer who authorized, permitted or acquiesced in the making of the public oral statement;

(d) each influential person, and each director and officer of the influential person, who knowingly influenced,

(i) the person who made the public oral statement to make the public oral statement, or

(ii) a director or officer of the responsible issuer to authorize, permit or acquiesce in the making of the public oral statement; and

(e) each expert where,

(i) the misrepresentation is also contained in a report, statement or opinion made by the expert,

(ii) the person making the public oral statement includes, summarizes or quotes from the report, statement or opinion of the expert, and

(iii) if the public oral statement was made by a person other than the expert, the expert consented in writing to the use of the report, statement or opinion in the public oral statement.

Influential persons

(3) Where an influential person or a person or company with actual, implied or apparent authority to act on behalf of the influential person releases a document or makes a public oral statement that relates to a responsible issuer and that contains a misrepresentation, a person or company who acquires or disposes of an issuer's security during the period between the time when the document was released or the public oral statement was made and the time when the misrepresentation contained in the document or public oral statement was publicly corrected has, without regard to whether the person or company relied on the misrepresentation, a right of action for damages against,

(a) the responsible issuer, if a director or officer of the responsible issuer, or where the responsible issuer is an investment fund, the investment fund manager, authorized, permitted or acquiesced in the release of the document or the making of the public oral statement;

(b) the person who made the public oral statement;

(c) each director and officer of the responsible issuer who authorized, permitted or acquiesced in the release of the document or the making of the public oral statement;

(d) the influential person;

(e) each director and officer of the influential person who authorized, permitted or acquiesced in the release of the document or the making of the public oral statement; and

(f) each expert where,

(i) the misrepresentation is also contained in a report, statement or opinion made by the expert,

(ii) the document or public oral statement includes, summarizes or quotes from the report, statement or opinion of the expert, and

(iii) if the document was released or the public oral statement was made by a person other than the expert, the expert consented in writing to the use of the report, statement or opinion in the document or public oral statement.

Failure to make timely disclosure

(4) Where a responsible issuer fails to make a timely disclosure, a person or company who acquires or disposes of an issuer's security between the time when the material change was required to be disclosed in the manner required under this Act and the subsequent disclosure of the material change has, without regard to whether the person or company relied on the responsible issuer having complied with its disclosure requirements, a right of action for damages against,

(a) the responsible issuer;

(b) each director and officer of the responsible issuer who authorized, permitted or acquiesced in the failure to make timely disclosure; and

(i) the responsible issuer or any person or company acting on behalf of the responsible issuer in the failure to make timely disclosure, or

(ii) a director or officer of the responsible issuer to authorize, permit or acquiesce in the failure to make timely disclosure.

Multiple roles

(5) In a proceeding under this section, a person who is a director or officer of an influential person is not liable in that capacity if the person is liable as a director or officer of the responsible issuer.

Multiple misrepresentations

(6) In a proceeding under this section,

(a) multiple misrepresentations having common subject matter or content may, in the discretion of the court, be treated as a single misrepresentation; and

(b) multiple instances of failure to make timely disclosure of a material change or material changes concerning common subject matter may, in the discretion of the court, be treated as a single failure to make timely disclosure.

No implied or actual authority

(7) In a proceeding under subsection (2) or (3), if the person who made the public oral statement had apparent authority, but not implied or actual authority, to speak on behalf of the issuer, no other person is liable with respect to any of the responsible issuer's securities that were acquired or disposed of before that person became, or should reasonably have become, aware of the misrepresentation.

Burden of proof and defences
Non-core documents and public oral statements

138.4 (1) In a proceeding under section 138.3 in relation to a misrepresentation in a document that is not a core document, or a misrepresentation in a public oral statement, a person or company is not liable, subject to subsection (2), unless the plaintiff proves that the person or company,

(a) knew, at the time that the document was released or public oral statement was made, that the document or public oral statement contained the misrepresentation;

(b) at or before the time that the document was released or public oral statement was made, deliberately avoided acquiring knowledge that the document or public oral statement contained the misrepresentation; or

(c) was, through action or failure to act, guilty of gross misconduct in connection with the release of the document or the making of the public oral statement that contained the misrepresentation.

Same

(2) A plaintiff is not required to prove any of the matters set out in subsection (1) in a proceeding under section 138.3 in relation to an expert.

Failure to make timely disclosure

(3) In a proceeding under section 138.3 in relation to a failure to make timely disclosure, a person or company is not liable, subject to subsection (4), unless the plaintiff proves that the person or company,

(a) knew, at the time that the failure to make timely disclosure first occurred, of the change and that the change was a material change;

(b) at the time or before the failure to make timely disclosure first occurred, deliberately avoided acquiring knowledge of the change or that the change was a material change; or

(c) was, through action or failure to act, guilty of gross misconduct in connection with the failure to make timely disclosure.

Same

(4) A plaintiff is not required to prove any of the matters set out in subsection (3) in a proceeding under section 138.3 in relation to,

(a) a responsible issuer;

(b) an officer of a responsible issuer;

(d) an officer of an investment fund manager.

Knowledge of the misrepresentation or material
change

(5) A person or company is not liable in a proceeding under section 138.3 in relation to a misrepresentation or a failure to make timely disclosure if that person or company proves that the plaintiff acquired or disposed of the issuer's security,

(a) with knowledge that the document or public oral statement contained a misrepresentation; or

(b) with knowledge of the material change.

Reasonable investigation

(6) A person or company is not liable in a proceeding under section 138.3 in relation to,

(a) a misrepresentation if that person or company proves that,

(i) before the release of the document or the making of the public oral statement containing the misrepresentation, the person or company conducted or caused to be conducted a reasonable investigation, and

(ii) at the time of the release of the document or the making of the public oral statement, the person or company had no reasonable grounds to believe that the document or public oral statement contained the misrepresentation; or

(b) a failure to make timely disclosure if that person or company proves that,

(i) before the failure to make timely disclosure first occurred, the person or company conducted or caused to be conducted a reasonable investigation, and

(ii) the person or company had no reasonable grounds to believe that the failure to make timely disclosure would occur.

Factors to be considered by court

(7) In determining whether an investigation was reasonable under subsection (6), or whether any person or company is guilty of gross misconduct under subsection (1) or (3), the courts shall consider all relevant circumstances, including,

(a) the nature of the responsible issuer;

(b) the knowledge, experience and function of the person or company;

(d) the presence or absence of another relationship with the responsible issuer, if the person was a director;

(e) the existence, if any, and the nature of any system to ensure that the responsible issuer meets its continuous disclosure obligations;

(f) the reasonableness of reliance by the person or company on the responsible issuer's disclosure compliance system and on the responsible issuer's officers, employees and others whose duties would in the ordinary course have given them knowledge of the relevant facts;

(g) the period within which disclosure was required to be made under the applicable law;

(h) in respect of a report, statement or opinion of an expert, any professional standards applicable to the expert;

(i) the extent to which the person or company knew, or should reasonably have known, the content and medium of dissemination of the document or public oral statement;

(j) in the case of a misrepresentation, the role and responsibility of the person or company in the preparation and release of the document or the making of the public oral statement containing the misrepresentation or the ascertaining of the facts contained in that document or public oral statement; and

(k) in the case of a failure to make timely disclosure, the role and responsibility of the person or company involved in a decision not to disclose the material change.

Confidential disclosure

(8) A person or company is not liable in a proceeding under section 138.3 in respect of a failure to make timely disclosure if,

(a) the person or company proves that the material change was disclosed by the responsible issuer in a report filed on a confidential basis with the Commission under subsection 75 (3);

(b) the responsible issuer had a reasonable basis for making the disclosure on a confidential basis;

(c) where the information contained in the report filed on a confidential basis remains material, disclosure of the material change was made public promptly when the basis for confidentiality ceased to exist;

(d) the person or company or responsible issuer did not release a document or make a public oral statement that, due to the undisclosed material change, contained a misrepresentation; and

(e) where the material change became publicly known in a manner other than the manner required under this Act, the responsible issuer promptly disclosed the material change in the manner required under this Act.

Forward-looking information

(9) A person or company is not liable in a proceeding under section 138.3 for a misrepresentation in forward-looking information if the person or company proves that,

(a) the document or public oral statement containing the forward-looking information contained, proximate to the forward-looking information,

(i) reasonable cautionary language identifying the forward-looking information as such and identifying material factors that could cause actual results to differ materially from a forecast or projection in the forward-looking information, and

(ii) a statement of the material factors or assumptions that were applied in making a forecast or projection in the forward-looking information; and

(b) the person or company had a reasonable basis for making the forecasts or projections in the forward-looking information.

Same

(10) Subsection (9) does not apply to a person or company in respect of forward-looking information contained in the prospectus of the responsible issuer filed in connection with the initial public distribution of securities of the responsible issuer or contained in financial statements prepared by the responsible issuer.

Expert report, statement or opinion

(11) A person or company, other than an expert, is not liable in a proceeding under section 138.3 with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by the expert in respect of which the responsible issuer obtained the written consent of the expert to the use of the report, statement or opinion, if the consent had not been withdrawn in writing before the document was released or the public oral statement was made, if the person or company proves that,

(a) the person or company did not know and had no reasonable grounds to believe that there had been a misrepresentation in the part of the document or public oral statement made on the authority of the expert; and

(b) the part of the document or oral public statement fairly represented the report, statement or opinion made by the expert.

Same

(12) An expert is not liable in a proceeding under section 138.3 with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by the expert, if the expert proves that the written consent previously provided was withdrawn in writing before the document was released or the public oral statement was made.

Release of documents

(13) A person or company is not liable in a proceeding under section 138.3 in respect of a misrepresentation in a document, other than a document required to be filed with the Commission, if the person or company proves that, at the time of release of the document, the person or company did not know and had no reasonable grounds to believe that the document would be released.

Derivative information

(14) A person or company is not liable in a proceeding under section 138.3 for a misrepresentation in a document or a public oral statement, if the person or company proves that,

(a) the misrepresentation was also contained in a document filed by or on behalf of another person or company, other than the responsible issuer, with the Commission or any other securities regulatory authority in Canada or a stock exchange and was not corrected in another document filed by or on behalf of that other person or company with the Commission or that other securities regulatory authority in Canada or stock exchange before the release of the document or the public oral statement made by or on behalf of the responsible issuer;

(b) the document or public oral statement contained a reference identifying the document that was the source of the misrepresentation; and

(c) when the document was released or the public oral statement was made, the person or company did not know and had no reasonable grounds to believe that the document or public oral statement contained a misrepresentation.

Where corrective action taken

(15) A person or company, other than the responsible issuer, is not liable in a proceeding under section 138.3 if the misrepresentation or failure to make timely disclosure was made without the knowledge or consent of the person or company and, if, after the person or company became aware of the misrepresentation before it was corrected, or the failure to make timely disclosure before it was disclosed in the manner required under this Act,

(a) the person or company promptly notified the board of directors of the responsible issuer or other persons acting in a similar capacity of the misrepresentation or the failure to make timely disclosure; and

(b) if no correction of the misrepresentation or no subsequent disclosure of the material change in the manner required under this Act was made by the responsible issuer within two business days after the notification under clause (a), the person or company, unless prohibited by law or by professional confidentiality rules, promptly and in writing notified the Commission of the misrepresentation or failure to make timely disclosure.

Damages

Assessment of damages

138.5 (1) Damages shall be assessed in favour of a person or company that acquired an issuer's securities after the release of a document or the making of a public oral statement containing a misrepresentation or after a failure to make timely disclosure as follows:

1. In respect of any of the securities of the responsible issuer that the person or company subsequently disposed of on or before the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages shall equal the difference between the average price paid for those securities (including any commissions paid in respect thereof) and the price received upon the disposition of those securities (without deducting any commissions paid in respect of the disposition), calculated taking into account the result of hedging or other risk limitation transactions.

2. In respect of any of the securities of the responsible issuer that the person or company subsequently disposed of after the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages shall equal the lesser of,

i. an amount equal to the difference between the average price paid for those securities (including any commissions paid in respect thereof) and the price received upon the disposition of those securities (without deducting any commissions paid in respect of the disposition), calculated taking into account the result of hedging or other risk limitation transactions, and

ii. an amount equal to the number of securities that the person disposed of, multiplied by the difference between the average price per security paid for those securities (including any commissions paid in respect thereof determined on a per security basis) and,

A. if the issuer's securities trade on a published market, the trading price of the issuer's securities on the principal market (as those terms are defined in the regulations) for the 10 trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or

B. if there is no published market, the amount that the court considers just.

3. In respect of any of the securities of the responsible issuer that the person or company has not disposed of, assessed damages shall equal the number of securities acquired, multiplied by the difference between the average price per security paid for those securities (including any commissions paid in respect thereof determined on a per security basis) and,

i. if the issuer's securities trade on a published market, the trading price of the issuer' securities on the principal market (as those terms are defined in the regulations) for the 10 trading days following the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or

ii. if there is no published market, the amount that the court considers just.

Same

(2) Damages shall be assessed in favour of a person or company that disposed of securities after a document was released or a public oral statement made containing a misrepresentation or after a failure to make timely disclosure as follows:

1. In respect of any of the securities of the responsible issuer that the person or company subsequently acquired on or before the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages shall equal the difference between the average price received upon the disposition of those securities (deducting any commissions paid in respect of the disposition) and the price paid for those securities (without including any commissions paid in respect thereof), calculated taking into account the result of hedging or other risk limitation transactions.

2. In respect of any of the securities of the responsible issuer that the person or company subsequently acquired after the 10th trading day after the public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, assessed damages shall equal the lesser of,

i. an amount equal to the difference between the average price received upon the disposition of those securities (deducting any commissions paid in respect of the disposition) and the price paid for those securities (without including any commissions paid in respect thereof), calculated taking into account the result of hedging or other risk limitation transactions, and

ii. an amount equal to the number of securities that the person disposed of, multiplied by the difference between the average price per security received upon the disposition of those securities (deducting any commissions paid in respect of the disposition determined on a per security basis) and,

B. if there is no published market, the amount that the court considers just.

3. In respect of any of the securities of the responsible issuer that the person or company has not acquired, assessed damages shall equal the number of securities that the person or company disposed of, multiplied by the difference between the average price per security received upon the disposition of those securities (deducting any commissions paid in respect of the disposition determined on a per security basis) and,

i. if the issuer's securities trade on a published market, the trading price of the issuer's securities on the principal market (as such terms are defined in the regulations) for the 10 trading days following the disclosure of the material change in the manner required under this Act, or

ii. if there is no published market, then the amount that the court considers just.

Same

(3) Despite subsections (1) and (2), assessed damages shall not include any amount that the defendant proves is attributable to a change in the market price of securities that is unrelated to the misrepresentation or the failure to make timely disclosure.

Proportionate liability

138.6 (1) In a proceeding under section 138.3, the court shall determine, in respect of each defendant found liable in the action, the defendant's responsibility for the damages assessed in favour of all plaintiffs in the action, and each such defendant shall be liable, subject to the limits set out in subsection 138.7 (1), to the plaintiffs for only that portion of the aggregate amount of damages assessed in favour of the plaintiffs that corresponds to that defendant's responsibility for the damages.

Same

(2) Despite subsection (1), where, in a proceeding under section 138.3 in respect of a misrepresentation or a failure to make timely disclosure, a court determines that a particular defendant, other than the responsible issuer, authorized, permitted or acquiesced in the making of the misrepresentation or the failure to make timely disclosure while knowing it to be a misrepresentation or a failure to make timely disclosure, the whole amount of the damages assessed in the action may be recovered from that defendant.

Same

(3) Each defendant in respect of whom the court has made a determination under subsection (2) is jointly and severally liable with each other defendant in respect of whom the court has made a determination under subsection (2).

Same

(4) Any defendant against whom recovery is obtained under subsection (2) is entitled to claim contribution from any other defendant who is found liable in the action.

Limits on damages

138.7 (1) Despite section 138.5, the damages payable by a person or company in a proceeding under section 138.3 is the lesser of,

(a) the aggregate damages assessed against the person or company in the action; and

(b) the liability limit for the person or company less the aggregate of all damages assessed after appeals, if any, against the person or company in all other actions brought under section 138.3, and under comparable legislation in other provinces or territories in Canada in respect of that misrepresentation or failure to make timely disclosure, and less any amount paid in settlement of any such actions.

Same

(2) Subsection (1) does not apply to a person or company, other than the responsible issuer, if the plaintiff proves that the person or company authorized, permitted or acquiesced in the making of the misrepresentation or the failure to make timely disclosure while knowing that it was a misrepresentation or a failure to make timely disclosure, or influenced the making of the misrepresentation or the failure to make timely disclosure while knowing that it was a misrepresentation or a failure to make timely disclosure.

Procedural Matters

Leave to proceed

138.8 (1) No proceeding may be commenced under section 138.3 without leave of the court granted upon motion with notice to each defendant. The court shall grant leave only where it is satisfied that,

(a) the action is being brought in good faith; and

(b) there is a reasonable possibility that the action will be resolved at trial in favour of the plaintiff.

Same

(2) Upon an application under this section, the plaintiff and each defendant shall serve and file one or more affidavits setting forth the material facts upon which each intends to rely.

Same

(3) The maker of such an affidavit may be examined on it in accordance with the rules of court.

Same

(4) A copy of the application for leave to proceed and any affidavits filed with the court shall be sent to the Commission when filed.

Notice

138.9 A person or company that has been granted leave to commence a proceeding under section 138.3 shall,

(a) promptly issue a news release disclosing that leave has been granted to commence a proceeding under section 138.3;

(b) send a written notice to the Commission within seven days, together with a copy of the news release; and

Restriction on discontinuation, etc., of proceeding

138.10 A proceeding under section 138.3 shall not be stayed, discontinued, settled or dismissed for delay without the approval of the court given on such terms as the court thinks fit including, without limitation, terms as to costs, and in determining whether to approve the settlement of the proceeding, the court shall consider, among other things, whether there are any other proceedings outstanding under section 138.3 or under comparable legislation in the other provinces or territories in Canada in respect of the same misrepresentation or failure to make timely disclosure.

Costs

138.11 Despite the Courts of Justice Act and the Class Proceedings Act, 1992, the prevailing party in a proceeding under section 138.3 is entitled to costs determined by a court in accordance with applicable rules of civil procedure.

Power of the Commission

138.12 The Commission may intervene in a proceeding under section 138.3 and in an application for leave under section 138.8.

No derogation from other rights

138.13 The right of action for damages and the defences to a proceeding under section 138.3 are in addition to and without derogation from any other rights or defences the plaintiff or defendant may have in a proceeding brought otherwise than under this Part.

Limitation period

138.14 No proceeding shall be commenced under section 138.3,

(a) in the case of misrepresentation in a document, later than the earlier of,

(i) three years after the date on which the document containing the misrepresentation was first released, and

(ii) six months after the issuance of a news release disclosing that leave has been granted to commence a proceeding under section 138.3 or under comparable legislation in the other provinces or territories in Canada in respect of the same misrepresentation;

(b) in the case of a misrepresentation in a public oral statement, later than the earlier of,

(i) three years after the date on which the public oral statement containing the misrepresentation was made, and

(ii) six months after the issuance of a news release disclosing that leave has been granted to commence a proceeding under section 138.3 or under comparable legislation in another province or territory of Canada in respect of the same misrepresentation; and

(i) three years after the date on which the requisite disclosure was required to be made, and

186. Subsection 142 (2) of the Act, as amended by the Statutes of Ontario, 1994, chapter 11, section 378, is amended by striking out the portion before clause (a) and substituting the following:

Exceptions

(2) Subsections 13 (1), (3) and (4), sections 60, 122, 126, 129, 130, 131, 134 and 135, Part XXIII.1 and section 139 do not apply to,

. . . . .

187. (1) Paragraph 25 of subsection 143 (1) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 33, section 8, is amended by striking out "and" at the end of subparagraph iv, by adding "and" at the end of subparagraph v and by adding the following subparagraph:

vi. defining auditing standards for attesting to and reporting on a reporting issuer's internal controls.

(2) Subsection 143 (1) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 33, section 8 and amended by 1997, chapter 19, section 23, 1997, chapter 43, Schedule F, section 13, 1999, chapter 9, section 220 and 2001, chapter 23, section 217, is amended by adding the following paragraphs:

55.1 Prescribing documents for the purposes of the definition of "core document" in subsection 138.1 (1).

55.2 Prescribing exemptions from the prospectus requirement under this Act for the purposes of clause 138.2 (b), take-over bids and issuer bids for the purposes of clause 138.2 (c) and transactions or classes of transactions for the purposes of clause 138.2 (d).

55.3 Prescribing the meaning of "market capitalization", "trading price" and "principal market" and such other terms as are used in Part XXIII.1 and are not otherwise defined in this Act.

(3) Subsection 143 (1) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 33, section 8 and amended by 1997, chapter 19, section 23, 1997, chapter 43, Schedule F, section 13, 1999, chapter 9, section 220 and 2001, chapter 23, section 217, is amended by adding the following paragraphs:

57. Requiring reporting issuers to appoint audit committees and prescribing requirements relating to the functioning and responsibilities of audit committees, including requirements in respect of,

i. the standard of review to be applied by audit committees in their review of documents filed under Ontario securities law,

ii. the certification or other evidence of review by audit committees,

iii. the scope and content of an audit committee's review, and

iv. the composition of audit committees and the qualifications of audit committee members, including independence requirements.

58. Requiring reporting issuers to devise and maintain a system of internal controls related to the effectiveness and efficiency of their operations, including financial reporting and asset control, sufficient to provide reasonable assurances that,

i. transactions are executed in accordance with management's general or specific authorization,

ii. transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles or any other criteria applicable to those statements,

iii. transactions are recorded as necessary to maintain accountability for assets,

iv. access to assets is permitted only in accordance with management's general or specific authorization, and

v. the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

59. Requiring reporting issuers to devise and maintain disclosure controls and procedures sufficient to provide reasonable assurances that,

i. information required to be disclosed under Ontario securities law is recorded, processed, summarized and reported, within the time periods specified under Ontario securities law, and

ii. information required to be disclosed under Ontario securities law is accumulated and communicated to the reporting issuer's management, including its chief executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure.

60. Requiring chief executive officers and chief financial officers of reporting issuers, or persons performing similar functions, to provide a certification that addresses the reporting issuer's internal controls, including a certification that addresses,

i. the establishment and maintenance of the internal controls,

ii. the design of the internal controls, and

iii. the evaluation of the effectiveness of the internal controls.

61. Requiring chief executive officers and chief financial officers of reporting issuers, or persons performing similar functions, to provide a certification that addresses the reporting issuer's disclosure controls and procedures, including a certification that addresses,

i. the establishment and maintenance of the disclosure controls and procedures,

ii. the design of the disclosure controls and procedures, and

iii. the evaluation of the effectiveness of the disclosure controls and procedures.

(4) Subsection 143 (2) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 33, section 8, is amended by striking out "and" at the end of clause (a) and by adding the following clause:

(a.1) the administration and distribution of amounts disgorged under paragraph 10 of subsection 127 (1);

Bill 179 - Government Efficiency Act, 2002

188. (1) This section applies only if Bill 179 (Government Efficiency Act, 2002, introduced on September 25, 2002) receives Royal Assent.

(2) References in this section to provisions of Bill 179 are references to those provisions as they were numbered in the first reading version of the Bill.

(3) On the later of the day subsection 181 (3) of this Act comes into force and the day section 11 of Schedule H to Bill 179 comes into force, clause 122 (4) (a) of the Securities Act is repealed and the following substituted:

(a) $5 million; and

Commencement

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

Same

(2) Sections 177 to 188 come into force on a day to be named by proclamation of the Lieutenant Governor.

PART XXVII
TAX INCENTIVE ZONES ACT
(PILOT PROJECTS), 2002

Schedule B

190. The Tax Incentive Zones Act (Pilot Projects), 2002, as set out in Schedule B to this Act, is hereby enacted.

Commencement

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

PART XXVIII
TOBACCO TAX ACT
AND RELATED AMENDMENTS

192. Section 6 of the Tobacco Tax Act, as amended by the Statutes of Ontario, 1991, chapter 48, section 3, 1994, chapter 18, section 8 and 2001, chapter 23, section 221, is amended by adding the following subsections:

Offence, failure to register

(2.1) Every interjurisdictional transporter transporting tobacco in bulk into or out of Ontario who is not registered as an interjurisdictional transporter under this Act is guilty of an offence and on conviction is liable to a fine of not less than $1,000 and not more than $10,000.

Penalty, failure to register

(2.2) Every interjurisdictional transporter transporting tobacco in bulk into or out of Ontario who does not hold a registration certificate under this Act shall pay to the Minister a penalty, when assessed therefor, equal to the sum of $500 and 5 per cent of the tax that would be payable under this Act on all such tobacco transported by the transporter into or out of Ontario during the period that the transporter did not hold a registration certificate, calculated as if that tobacco had been purchased by a consumer.

193. Section 7 of the Act is amended by adding the following subsection:

Penalty, failure to register

(5) Every person who operates as a manufacturer in Ontario without holding a registration certificate required by this section shall pay to the Minister a penalty, when assessed therefor, in an amount equal to the tax that would be payable under this Act on the volume of tobacco that the person manufactured during the period that the person did not hold a registration certificate, calculated as if that tobacco had been purchased by a consumer.

194. (1) Subsection 17 (3) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 18, section 8, is repealed and the following substituted:

Offence, failure to deliver a return

(3) Every person who fails to deliver a return as required by subsection (1) is guilty of an offence and on conviction is liable to a fine of not less than $200 and not more than $5,000.

(2) Section 17 of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8, is amended by adding the following subsection:

Same, holder of a permit to manufacture tear tape

(3.1) Despite subsection (3), every holder of a permit to manufacture tear tape who fails to deliver a return as required by subsection (1) is guilty of an offence and on conviction is liable to a fine of not less than $500 and not more than $10,000.

(3) Subsection 17 (4) of the Act is repealed and the following substituted:

Penalty, failure to deliver a return

(4) Every person who is a collector, importer, exporter, wholesaler, manufacturer, holder of a permit to mark or stamp cigarettes or to purchase and sell unmarked cigarettes or holder of a transit permit who fails to deliver a return as required by subsection (1) shall pay to the Minister, when assessed therefor, a penalty equal to 10 per cent of the tax collectable or 5 per cent of the tax payable, as the case may be, by the person for the period covered by the return.

Same, interjurisdictional transporter

(4.1) Every person who is an interjurisdictional transporter who fails to deliver a return as required by subsection (1) shall pay to the Minister, when assessed therefor, a penalty of $1,000 for the return that the transporter has failed to deliver.

(4) Section 17 of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8, is amended by adding the following subsection:

Same, holder of a permit to manufacture tear tape

(4.2) Every holder of a permit to manufacture tear tape who fails to deliver a return as required by subsection (1) shall pay to the Minister, when assessed therefor, a penalty of $1,000 for the return that the holder has failed to deliver.

(5) Section 17 of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 8, is amended by adding the following subsection:

Penalty, failure to remit taxes with return

(4.3) Every person who fails to remit with the return required by subsection (1) the tax collectable or the tax payable by the person shall pay to the Minister, when assessed therefor, a penalty equal to 10 per cent of the tax collectable or 5 per cent of the tax payable, as the case may be, by the person for the period covered by the return.

Repeals

195. Subsections 228 (2), (3), (4) and (5) of the Responsible Choices for Growth and Fiscal Responsibility Act (Budget Measures), 2001 are repealed.

Commencement

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

Same

(2) Sections 192 and 193 and subsections 194 (1), (3) and (5) come into force on July 1, 2003.

Same

(3) Subsections 194 (2) and (4) come into force on a day to be named by proclamation of the Lieutenant Governor.

PART XXIX
COMMENCEMENT AND SHORT TITLE

Commencement

197. (1) Subject to subsections (2), (3) and (4), 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 Act set out in each Schedule to this Act comes into force as provided in the commencement section near the end of the Schedule.

Same

(4) If a Part or Schedule provides that any provisions are to come into force on a day to be named by proclamation of the Lieutenant Governor, a 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

198. The short title of this Act is the Keeping the Promise for a Strong Economy Act (Budget Measures), 2002.

SCHEDULE A
ONTARIO MUNICIPAL ECONOMIC INFRASTRUCTURE FINANCING
AUTHORITY ACT, 2002

CONTENTS


Interpretation
1.	Definitions
Corporate Matters
2.	Authority continued
3.	Objects of the Authority
4.	Powers of the Authority
5.	Status as Crown agent
6.	Board of directors
7.	Powers and duties of the board
8.	Policies and directives of the Minister
9.	Chief executive officer
10.	Employees
11.	Annual report
12.	Other reports
Financial Matters
13.	By-laws authorizing borrowing
14.	Status and use of revenues
15.	Audits
16.	Financial authority of the Crown
17.	Payment of judgments against the Authority, etc.
18.	Agreement re appropriated funds
General
19.	Investments authorized for trusts
20.	Application of certain statutes
21.	Waiver of sovereign immunity
22.	Immunity of employees and others
23.	Evidence of authority for transactions
24.	Regulations
Commencement and Short Title
25.	Commencement
26.	Short title
______________

Interpretation

Definitions

1. In this Act,

"Minister" means the Minister of Finance or such other member of the Executive Council as may be assigned the administration of this Act under the Executive Council Act; ("ministre")

"municipality" has the same meaning as in subsection 1 (1) of the Municipal Act, 2001; ("municipalité")

"related entity" means, in relation to the Authority, a subsidiary, trust, partnership or other entity established or acquired by the Authority that is a Crown agent; ("entité liée")

"subsidiary" means a subsidiary of the Authority. ("filiale")

Corporate Matters

Authority continued

2. (1) Ontario Municipal Economic Infrastructure Financing Authority incorporated on August 19, 2002 under the Corporations Act is hereby continued as a corporation without share capital under the name Ontario Municipal Economic Infrastructure Financing Authority in English and Office ontarien de financement de l'infrastructure économique des municipalités in French.

Composition

(2) The Authority is composed of the members of its board of directors.

Authority to change name

(3) The Minister may, by regulation, change the name of the Authority.

Objects of the Authority

3. The following are the objects of the Authority:

1. To provide financing for municipalities and for such other public bodies as may be specified by regulation for such purposes as may be specified by regulation.

2. To obtain funding to finance its activities.

3. To exercise powers under the Corporations Tax Act and the Income Tax Act regarding any bond, debenture or other security.

4. To engage in such other activities as the Lieutenant Governor in Council may specify.

Powers of the Authority

4. (1) The Authority has the capacity, rights, powers and privileges of a natural person, except as limited by this Act.

Funding

(2) Without limiting the generality of subsection (1), the Authority may obtain funding by borrowing money, by issuing bonds, debentures and other securities, by establishing trusts, corporations, partnerships and other entities and by other means.

Restriction on borrowing, etc.

(3) The Authority or a subsidiary that is a related entity shall not borrow, invest or manage financial risks unless the activity is authorized by a by-law and the Minister has consented to the by-law.

Same, certain related entities

(4) A related entity that is not a subsidiary shall not borrow, invest or manage financial risks without the consent of the Minister.

Restriction re subsidiaries, etc.

(5) The Authority shall not establish or acquire a subsidiary, trust, partnership or other entity unless it has the consent of the Minister.

Consent of the Minister

(6) The consent of the Minister referred to in subsection (4) or (5) may be general or particular and may include such terms as the Minister considers advisable.

Status as Crown agent

5. (1) Subject to subsections (2) and (3), the Authority is a Crown agent for all purposes.

Exception

(2) The Authority or a related entity may declare in writing in a contract, security or instrument that it is not acting as a Crown agent for the purposes of the contract, security or instrument.

Effect of declaration

(3) If the Authority or a related entity makes a declaration in accordance with subsection (2), the Authority or related entity shall be deemed not to be a Crown agent for the purposes of the contract, security or instrument and the Crown is not liable for any liability or obligation of the Authority or related entity under the contract, security or instrument.

Board of directors

6. (1) The board of directors of the Authority is composed of at least three and not more than 16 members who are appointed by the Lieutenant Governor in Council.

Term of office

(2) The term of office of a director is determined by the Lieutenant Governor in Council and may not exceed three years.

Reappointment

(3) A director is eligible to be reappointed.

Chair and vice-chairs

(4) The Lieutenant Governor in Council shall designate a director as the chair and may designate one or more directors as vice-chairs.

Transition

(5) The persons who are directors immediately before this section comes into force cease to hold office when this section comes into force.

Powers and duties of the board

7. (1) The board of directors shall manage or supervise the management of the business and affairs of the Authority.

By-laws

(2) The board may pass by-laws and resolutions regulating its proceedings and generally for the conduct and management of the affairs of the Authority.

Delegation

(3) Subject to its by-laws, the board may delegate any of its powers or duties to a committee of the board or to one or more directors, subject to such conditions and restrictions as may be specified by the board.

Same

(4) Subject to its by-laws, the board may delegate powers to manage the business and affairs of the Authority to one or more officers of the Authority.

Restriction on delegation

(5) The board cannot delegate its power to make by-laws or to approve the financial statements or annual report of the Authority.

Policies and directives of the Minister

8. (1) The Minister may issue policies or directives in writing to the Authority or any related entity on matters relating to its operations and the exercise of its powers.

Implementation

(2) The board of directors of the Authority or of a subsidiary that is a related entity, or the governing body of any other related entity, shall ensure that the policies and directives issued to the Authority or related entity, as the case may be, are implemented promptly and efficiently.

Chief executive officer

9. The Lieutenant Governor in Council may appoint a chief executive officer for the Authority.

Employees

10. (1) The Authority may appoint employees under the Public Service Act.

Same

(2) Subsection (1) does not limit the power of the Authority to hire employees otherwise than under the Public Service Act.

Same

(3) The chief executive officer of the Authority has the powers of a deputy minister and the chair of the board of directors has the powers of a minister under the Public Service Act with respect to the employees of the Authority to whom that Act applies.

Agreements to provide services

(4) Any minister of the Crown or chair of a Crown agency may enter into agreements with the Authority for the provision by employees of the Crown or the Crown agency of any service required by the Authority.

Annual report

11. (1) The Authority shall, within 90 days after the end of every fiscal year, submit to the Minister an annual report on its affairs during that fiscal year, signed by the chair of its board of directors.

Financial statements

(2) The audited financial statements of the Authority must be included in the annual report.

Tabling

(3) The Minister shall submit the annual report to the Lieutenant Governor in Council and shall then table the report in the Assembly.

Disclosure of financial statements

(4) The Authority may give its financial statements to other persons before the Minister complies with subsection (3).

Other reports

12. The Authority shall give such other reports and information to the Minister as he or she may require.

Financial Matters

By-laws authorizing borrowing

13. A by-law to authorize borrowing by the Authority or by a subsidiary that is a related entity must include the following information:

1. The maximum principal amount of borrowing that may be outstanding at any time under the authority of the by-law.

2. The period, not to exceed five years, during which the borrowing authority may be exercised.

3. The date after which no funds are permitted to remain outstanding under the authority of the by-law.

4. Such other terms and conditions as the Minister may approve.

Status and use of revenues

14. Despite the Financial Administration Act, the revenues received by the Authority or a related entity do not form part of the Consolidated Revenue Fund.

Audits

15. The Provincial Auditor may audit the accounts and financial transactions of the Authority and its subsidiaries each year.

Financial authority of the Crown

16. (1) The Lieutenant Governor in Council may raise by way of loan in the manner provided by the Financial Administration Act such sums as the Lieutenant Governor in Council considers necessary for the purposes of the Authority, and the Minister shall use the sums so raised to make advances to the Authority or a subsidiary by way of loan or to purchase securities issued by the Authority or the subsidiary in such amounts, at such times and on such terms and conditions as the Minister may determine.

Same

(2) The Lieutenant Governor in Council may by order authorize the Minister to purchase securities of or make loans to the Authority or a subsidiary in such amounts, at such times and on such terms as the Minister may determine, subject to the maximum principal amount specified by the Lieutenant Governor in Council that may be purchased or advanced or that may be outstanding at any time.

Payment from C.R.F.

(3) The Minister may pay out of the Consolidated Revenue Fund any amount required for the purposes of subsection (1) or (2).

Delegation

(4) In an order under subsection (1) or (2), the Lieutenant Governor in Council may delegate to an officer or employee of the Crown or an agency of the Crown or to a solicitor engaged to act for the Minister any or all of the powers of the Minister under that subsection.

Payment of judgments against the Authority, etc.

17. (1) The Minister shall pay from the Consolidated Revenue Fund the amount of any judgment against the Authority or a related entity that remains unpaid after it has made reasonable efforts, including liquidating its assets, to pay the amount of the judgment.

Exception

(2) Subsection (1) does not apply to a judgment against the Authority or a related entity in respect of a contract, security or instrument in respect of which the Authority or related entity has made a declaration described in subsection 5 (2).

Agreement re appropriated funds

18. (1) As security for the payment by an entity of an amount that the entity has agreed to pay to the Authority or a related entity, as defined in subsection (3), on account of the indebtedness of the entity to the Authority or related entity, the entity may agree in writing with the Authority or related entity that the Minister is entitled to deduct from money appropriated by the Assembly for payment to the entity, or from money appropriated by the Assembly for payment to the entity in respect of specified matters, amounts not exceeding the amounts that the entity fails to pay to the Authority or related entity on account of the indebtedness.

Authority to deduct

(2) If the entity fails to pay an amount to the Authority or related entity, the Minister shall make the deduction authorized by the agreement from the money appropriated by the Assembly and shall pay the amount deducted to the Authority or related entity from the Consolidated Revenue Fund.

Definition

(3) In this section,

"related entity" includes a subsidiary, trust, partnership or other entity established or acquired by the Authority that is not a Crown agent.

General

Investments authorized for trusts

19. For the purposes of section 26 of the Trustee Act, securities issued by the Authority or by any subsidiary, trust, partnership or other entity established or acquired by the Authority shall be deemed to be property in which a trustee could invest immediately before the coming into force of section 16 of Schedule B to the Red Tape Reduction Act, 1998.

Application of certain statutes
Business Corporations Act, conflict of interest

20. (1) Subsections 132 (1) to (8) of the Business Corporations Act apply, with necessary modifications, to the Authority and its subsidiaries, if any, and to their officers and the members of their boards of directors.

Same

(2) For the purposes of subsection (1), the Minister may exercise the powers of the shareholders under subsection 132 (8) of the Business Corporations Act.

Business Corporations Act, indemnification and insurance

(3) Subsections 136 (1), (3) and (4) of the Business Corporations Act apply, with necessary modifications, to the Authority and its subsidiaries, if any, and to their officers and the members of their boards of directors.

Corporations Act,
Corporations Information Act

(4) The Corporations Act and the Corporations Information Act do not apply to the Authority, except as otherwise specified by regulation.

Financial Administration Act

(5) Section 28 of the Financial Administration Act does not apply with respect to any borrowing, investing or financial risk management activities of the Authority or a related entity.

Loan and Trust Corporations Act

(6) The Loan and Trust Corporations Act does not apply to the Authority, except as otherwise specified by regulation.

Waiver of sovereign immunity

21. The Authority or a related entity may waive any immunity to which it may be entitled outside Ontario as a Crown agent and may submit to the jurisdiction of a court outside Ontario.

Immunity of employees and others

22. (1) No action or other civil proceeding shall be commenced against any of the following persons for any act done in good faith in the exercise or performance or intended exercise or performance of a power or duty under this Act, the regulations or the by-laws of the Authority or a related entity or under a directive issued under subsection 8 (1) or for any neglect or default in the exercise or performance in good faith of such a power or duty:

1. A director, officer, employee or agent of the Authority.

2. A director, officer, employee, partner, trustee or agent of the related entity.

Immunity of the Crown and Crown agencies

(2) No action or other civil proceeding shall be commenced against the Crown or a Crown agency for any act, neglect or default by a person referred to in subsection (1) or for any act, neglect or default by the Authority or a related entity.

Exception

(3) Subsections (1) and (2) do not relieve the Authority or a related entity of any liability to which it would otherwise be subject in respect of a cause of action arising from any act, neglect or default referred to in subsection (1).

Definition

(4) In this section,

"employee" includes an employee appointed under the Public Service Act.

Evidence of authority for transactions

23. (1) A recital or declaration in any resolution of the board of directors that a transaction is for the purpose of carrying out the objects of the Authority is conclusive evidence to that effect.

Evidence of authority

(2) A certificate of the chair, a vice-chair, the chief executive officer or any officer of the Authority designated by the board of directors for the purpose which states that the sum of the amount specified in the certificate and the sum of all other principal amounts borrowed under a specified by-law described in section 13 does not exceed the maximum principal amount that may be borrowed under that by-law is conclusive evidence of that fact.

Regulations

24. (1) The Lieutenant Governor in Council may make regulations,

(a) specifying public bodies for the purposes of paragraph 1 of section 3;

(b) specifying, for the purposes of paragraph 1 of section 3, the purposes for which the Authority may provide financing;

(c) prescribing the provisions of the Corporations Act and the Corporations Information Act that apply with respect to the Authority;

(d) governing such other matters as the Minister considers necessary or advisable for the purposes of this Act.

General or particular

(2) A regulation may be general or particular in its application.

Commencement and Short Title

Commencement

25. The Act set out in this Schedule comes into force on a day to be named by proclamation of the Lieutenant Governor.

Short title

26. The short title of the Act set out in this Schedule is the Ontario Municipal Economic Infrastructure Financing Authority Act, 2002.

SCHEDULE B
TAX INCENTIVE ZONES ACT
(PILOT PROJECTS), 2002

CONTENTS


1.	Definitions
2.	Establishment of tax incentive zones
3.	Cancellation of provincial taxes
4.	Cancellation of municipal taxes
5.	Cancellation of school taxes
6.	Cancellation of fees and charges
7.	Eligibility
8.	Tax incentive agreements
9.	Non-compliance with tax incentive agreement
10.	Zone administrators
11.	Inspections
12.	Offence
13.	Regulations
14.	Scope of municipal by-laws
15.	Conflicts
16.	Commencement
17.	Short title
______________

Definitions

1. In this Act,

"designated law" means a statutory provision that is specified in a regulation made under clause 13 (1) (a); ("loi désignée")

"Minister" means the Minister of Finance; ("ministre")

"tax incentive agreement" means an agreement described in section 8; ("accord d'allégement fiscal")

"tax incentive zone" means a geographic area designated as a tax incentive zone under section 2; ("zone d'allégement fiscal")

"zone administrator" means a person designated as a zone administrator under section 10. ("administrateur de zone")

Establishment of tax incentive zones

2. The Lieutenant Governor in Council may, by regulation, designate any geographic area in Ontario as a tax incentive zone and may limit the designation to a specified period of time.

Cancellation of provincial taxes

3. The Minister may, by regulation, cancel all or part of the taxes paid or payable to the Crown under a designated law by an eligible person in respect of an activity carried on in a tax incentive zone.

Cancellation of municipal taxes

4. (1) A local municipality may pass by-laws providing for the cancellation of all or part of the taxes paid or payable to the municipality under the Municipal Act, 2001 by an eligible person in respect of property located in a tax incentive zone within the municipality.

Same, upper-tier municipalities

(2) An upper-tier municipality may pass by-laws providing for the cancellation of all or part of the taxes paid or payable to the municipality under the Municipal Act, 2001 by an eligible person in respect of property located in a tax incentive zone within the municipality.

Restriction

(3) A municipality is not authorized to pass a by-law under subsection (1) or (2) unless the municipality has obtained the written approval of the Minister of Municipal Affairs and Housing for the proposed by-law.

Cancellation of school taxes

5. The Minister may, by regulation, cancel all or part of the taxes paid or payable to a school board under the Education Act by an eligible person in respect of property located in a tax incentive zone within the jurisdiction of the school board.

Cancellation of fees and charges

6. (1) The Minister may, by regulation, cancel all or part of a fee or charge paid or payable to the Crown or to a school board under a designated law by an eligible person in respect of property that is located or an activity that is carried on in a tax incentive zone.

Same, local municipalities

(2) A local municipality may pass by-laws providing for the cancellation of all or part of a fee or charge paid or payable to the municipality under a designated law by an eligible person in respect of property that is located or an activity that is carried on in a tax incentive zone within the municipality.

Same, upper-tier municipalities

(3) An upper-tier municipality may pass by-laws providing for the cancellation of all or part of a fee or charge paid or payable to the municipality under a designated law by an eligible person in respect of property that is located or an activity that is carried on in a tax incentive zone within the municipality.

Restriction

(4) A municipality is not authorized to pass a by-law under subsection (2) or (3) unless the municipality has obtained the written approval of the Minister of Municipal Affairs and Housing for the proposed by-law.

Eligibility
Cancellation of provincial taxes, fees, charges

7. (1) A person who satisfies the prescribed criteria is an eligible person for the purposes of a regulation made under section 3 or subsection 6 (1) for a particular tax incentive zone if the person enters into a tax incentive agreement with the zone administrator and the Minister.

Same, cancellation of municipal taxes, fees, charges

(2) A person who satisfies the prescribed criteria is an eligible person for the purposes of a by-law made by a municipality under section 4 or subsection 6 (2) or (3) for a particular tax incentive zone if the person enters into a tax incentive agreement with the zone administrator.

Same, cancellation of school taxes

(3) A person who satisfies the prescribed criteria is an eligible person for the purposes of a regulation made under section 5 for a particular tax incentive zone if the person enters into a tax incentive agreement with the zone administrator and the Minister.

Expiry of status

(4) Upon the expiry of a tax incentive agreement, the person ceases to be an eligible person with respect to the applicable taxes, fees or charges in the tax incentive zone.

Loss of status

(5) A person ceases to be an eligible person for the purposes of this Act if the person ceases to meet the prescribed criteria or if the person fails to comply with any tax incentive agreement that the person has entered into.

Tax incentive agreements

8. A tax incentive agreement must contain such terms as the Minister may approve and must be entered into in a form approved by the Minister.

Non-compliance with tax incentive agreement

9. (1) This section applies if the Minister decides that a person has failed to comply with a tax incentive agreement to which the person is a party and gives written notice to the person.

Same

(2) Upon receiving the notice, the person becomes liable to pay the taxes, charges or fees to which the person would have been liable if the person had not entered into the tax incentive agreement or such lesser amount as the Minister considers appropriate in the circumstances.

Dispute

(3) The person may apply to the Superior Court of Justice within 60 days after receiving the notice for a determination as to whether the decision of the Minister described in subsection (1) was reasonable.

Powers of the court

(4) If the court decides that the decision of the Minister was not reasonable, the court may order the Minister to reconsider whether the person has failed to comply with the tax incentive agreement; if the court decides that the decision of the Minister was reasonable, the court may order the person to pay all or part of the taxes, fees or charges for which the person would have been liable if the person had not entered into the tax incentive agreement.

Zone administrators

10. The Minister may, by regulation,

(a) establish, or authorize the establishment of, an entity for the purposes of designating the entity as a zone administrator and provide for the composition, powers and duties of the entity;

(b) designate a person or entity to act as a zone administrator for a tax incentive zone;

(c) assign powers and duties to a zone administrator and specify the manner in which the powers are to be exercised and the duties performed.

Inspections

11. An inspector authorized by the Minister or by the zone administrator may enter any premises where an eligible person is carrying on activities or where any property of the eligible person is kept and may examine any documents or records to determine whether the eligible person is complying with the tax incentive agreement.

Offence

12. (1) A person who makes, participates in, assents to or acquiesces in the making of a false or deceptive statement in an agreement or document prepared for the purposes of this Act is guilty of an offence.

Penalty

(2) On conviction of an offence under subsection (1), the person is liable to imprisonment for a term of not more than two years or a fine of not more than $100,000 or to both.

Regulations

13. (1) The Minister may, by regulation,

(a) specify provisions of statutes that are designated laws for the purposes of section 3 or subsection 6 (1), (2) or (3);

(b) prescribe criteria that a person must satisfy in order to be an eligible person.

Scope

(2) A regulation under this Act may be general or particular and may differentiate between classes of eligible person.

Restriction, designated laws

(3) A regulation under clause (1) (a) may specify different designated laws for different tax incentive zones.

Same, eligible persons

(4) A regulation under clause (1) (b) may specify a person by name and state that the person shall be deemed to satisfy the prescribed criteria, if any, to be an eligible person.

Conditions

(5) A regulation under this Act that cancels all or part of the taxes, fees or charges paid or payable by an eligible person under a designated law may impose conditions or restrictions with respect to the cancellation.

Scope of municipal by-laws

14. (1) A municipal by-law authorized by this Act that cancels all or part of the taxes, fees or charges paid or payable by an eligible person may impose conditions or restrictions with respect to the cancellation.

Classes

(2) A municipal by-law authorized by this Act may be general or particular and may differentiate between classes of eligible person.

Conflicts

15. (1) Section 106 of the Municipal Act, 2001 (assistance prohibited) does not apply with respect to a cancellation of taxes, fees or charges by a municipality under this Act.

Same

(2) The following provisions do not apply with respect to a cancellation of taxes, fees or charges by the Minister under this Act:

1. Employer Health Tax Act, subsection 2 (4).

2. Fuel Tax Act, section 1.1.

3. Gasoline Tax Act, section 1.1.

4. Land Transfer Tax Act, section 1.1.

5. Retail Sales Tax Act, section 1.1.

Commencement

16. The Act set out in this Schedule comes into force on the day the Keeping the Promise for a Strong Economy Act (Budget Measures), 2002 receives Royal Assent.

Short title

17. The short title of the Act set out in this Schedule is the Tax Incentive Zones Act (Pilot Projects), 2002.

EXPLANATORY NOTE

This Explanatory Note was written as a reader's aid to Bill 198 and does not form part of the law. Bill 198 has been enacted as Chapter 22 of the Statutes of Ontario, 2002.

The Bill implements measures contained in the 2002 Budget and other initiatives of the Government. The major elements of the Bill are described below.

PART I
ASSESSMENT ACT

Currently, subsection 33 (1) of the Assessment Act requires the clerk of a municipality to add to the collector's roll any land that has been omitted in whole or in part from the roll in the circumstances described in that subsection. Amendments permit the Minister to prescribe exceptions to this requirement. The amendments are made effective as of January 1, 2000.

References throughout the Act to the "residential/farm property class" are changed to "residential property class" and references to the "farmlands property class" are changed to "farm property class".

A technical amendment is made to subsection 3 (1) of the Act.

PART II
BUSINESS CORPORATIONS ACT

The Business Corporations Act is amended to specify that professional corporations are permitted to invest the surplus funds that they earn. Currently, the Act specifies that they may temporarily invest such funds.

PART III
COMMODITY FUTURES ACT

The maximum penalties for offences under the Commodity Futures Act are increased from a fine of $1 million and imprisonment for two years to a fine of $5 million and imprisonment for five years less a day. (See the amendments to section 55 of the Act.)

If a person or company fails to comply with Ontario commodity futures law, the Ontario Securities Commission is given power to order the payment of an administrative penalty of up to $1 million and to order the disgorgement of amounts obtained as a result of the non-compliance. (See the amendments to section 60 and subsection 65 (2) of the Act and the new section 60.5 of the Act.)

The amendments prohibit engaging in acts that a person or company knows or reasonably ought to know perpetrate a fraud or result in a misleading appearance of trading activity in, or an artificial price for, a commodity, commodity futures contract or commodity futures option. The amendments also contain a general prohibition on making statements that a person or company knows or reasonably ought to know are misleading or untrue and significantly affect, or would reasonably be expected to have a significant effect on, the market price or value of a commodity, commodity futures contract or commodity futures option. (See the new sections 59.1 and 59.2 of the Act.)

PART IV
COMMUNITY SMALL BUSINESS
INVESTMENT FUNDS ACT

The amendment to section 18.5 of the Community Small Business Investment Funds Act extends the registration deadline for new "CSBIFs" from December 31, 2002 to December 31, 2003.

Amendments to sections 18.2 and 18.3 of the Act allow an Ontario Centre of Excellence to sponsor a corporation as a community small business investment fund corporation.

Technical amendments are made to the Act, including amendments to correct errors in terminology, to update references to other statutes and to repeal spent provisions of the Act.

PART V
COMPULSORY AUTOMOBILE
INSURANCE ACT

Section 13 of the Compulsory Automobile Insurance Act is amended to provide that a motor vehicle permit may not be issued, validated or transferred until the Ministry of Transportation is satisfied through information it has obtained that the motor vehicle is insured under a contract of automobile insurance. The Act is also amended to require insurers and other persons to give to the Registrar, upon the request of the Minister of Transportation, certain information concerning automobile insurance. The Act is further amended to provide that prescribed information may be collected and kept by agents and delegates of the Minister of Transportation. The Act is also amended to allow insurers to prepare a statutory declaration, instead of attending court, in order to give evidence about whether or not a motor vehicle is insured.

PART VI
CORPORATIONS TAX ACT

Amendments to sections 38 and 43 of the Corporations Tax Act delay by one year each of the reductions to the general corporate income tax rate and the tax rate on income from manufacturing and processing, mining, logging, farming and fishing originally enacted to take effect on January 1 in 2003, 2004 and 2005. Consequential amendments are made in respect of the calculation of income in respect of certain amounts paid to non-residents (subsection 11 (8.1) of the Act), the small business incentive deduction (subsections 41 (1.1) and (1.4) of the Act), the surtax on Canadian-controlled private corporations (subsection 41.1 (3) of the Act) and the extension of the small business tax rate to credit unions (subsection 51 (4.1) of the Act).

Section 4 of the Act is amended to parallel Canada's income tax treaties, for the purpose of determining whether a non-resident corporation has a permanent establishment in Ontario.

An amendment to clause 13.4 (2) (b) of the Act extends the deadline for acquiring an eligible school bus under the Ontario school bus safety tax incentive from May 4, 2002 to December 31, 2005.

A new section 37.1 of the Act creates a tax incentive for corporations that own Ontario Jobs and Opportunity Bonds. These are bonds, debentures and other securities that are issued by the Ontario Municipal Economic Infrastructure Financing Authority or by a related entity and designated by the Authority as Ontario Jobs and Opportunity Bonds. The Minister of Finance may also designate bonds, debentures and securities as Ontario Jobs and Opportunity Bonds. The details of the tax incentive are to be set out in the regulations. The new section comes into force on proclamation.

Amendments to subsection 43.1 (4) and section 57.5 of the Act and the enactment of the new section 57.9.1 allow a Canadian subsidiary of a foreign bank to transfer to its parent company assets on a tax-deferred basis and unused corporate minimum tax credits and losses.

The rules concerning associated corporations under the Ontario innovation tax credit in section 43.3 of the Act are amended. The amendments provide that certain non-resident corporations with no permanent establishment in Canada will be treated as associated corporations, effective on the day the Bill receives Royal Assent. The amendments also provide that certain Canadian corporations and non-resident corporations with a permanent establishment in Canada but not in Ontario will be treated as associated corporations, effective May 5, 1999.

Amendments are made to the Ontario interactive digital media tax credit in section 43.11 of the Act. The amendments allow tax credit entitlements to be transferred to an eligible successor corporation or a wholly-owned affiliate if a corporate reorganization occurs when an eligible product is being developed.

Section 69 of the Act is amended to provide an additional method for allocating the $5 million deduction from paid up capital among associated corporations. Amendments to section 69 also allow foreign branches of a corporation to apply the $5 million deduction against total paid-up capital employed in Canada. The amendments also provide that financial institutions and corporations exempt from capital tax are to be excluded when the deduction is allocated among associated corporations.

Technical amendments are made to the administrative provisions of the Act relating to repeated failures to file a return (section 79 of the Act), assessments (section 80 of the Act) and the alternative objection and appeals procedure (section 92 of the Act). Other technical amendments extend the increases in the Ontario small business limit to a partner's share of partnership income (new subsections 41 (6) and (7) of the Act). The tax credit for investments in a community small business investment fund corporation is extended to investments made before January 1, 2004 to conform with the extension of the community small business investment funds program to the end of 2003 (subsection 66.1 (4.5) of the Act).

PART VII
EDUCATION ACT

References throughout the Education Act to the "residential/farm property class" are changed to "residential property class" and references to the "farmlands property class" are changed to "farm property class".

PART VIII
ELECTRICITY ACT, 1998

Technical amendments are made to sections 85.15 and 85.16 of the Electricity Act, 1998 concerning refunds. Under section 85.15, the Financial Corporation is permitted to make refunds under that section with the authorization of the Minister of Finance. The amendment to section 85.16 specifies that refunds under that section are to be made by the Financial Corporation.

Technical amendments are made to section 94 of the Act to allow municipal electricity utilities and municipal corporations to reduce the transfer tax payable under the Act to take into account any taxable capital gain that arises when an interest in a property is transferred.

PART IX
EMPLOYER HEALTH TAX ACT

Section 1 of the Employer Health Tax Act is amended to specify the circumstances in which an employee is considered to "report for work at a permanent establishment" of an employer if the employee does not come to the establishment in person to work. This amendment is made effective on January 1, 2003.

Technical amendments are made to sections 7 and 30 of the Act. Currently, subsections 7 (1.1) and 30 (2.1) of the Act provide for the cancellation of the interest and penalty payable under the Act for late payments by an employer, if the employer's total Ontario remuneration for the previous year does not exceed $600,000. The amendments address the situation of an employer that has undergone a corporate reorganization. They are made effective on January 1, 2000.

PART X
FINANCIAL ADMINISTRATION ACT

Currently, section 5 of the Financial Administration Act authorizes the Lieutenant Governor in Council to delete certain types of losses from the accounts of the Government of Ontario, and requires that the losses be reported in the Public Accounts. An amendment permits the losses to be reported, instead, in the financial information supplemental to the Public Accounts. The new subsection 5 (3.1) describes the effect in law of the deletion of certain types of losses from the accounts of the Government.

An amendment to section 11.1 of the Act specifies that the Act does not prohibit the Crown from incurring non-cash expenses under the authority of a resolution of the Assembly granting interim supply.

A technical amendment is made to subsection 28 (2) of the Act, concerning the enforceability of financial arrangements made by ministries in the circumstances described in that section.

PART XI
FUEL TAX ACT

The Fuel Tax Act is amended in relation to the duties of interjurisdictional transporters. It is an offence for an interjurisdictional transporter to fail to register under the Act, and an administrative penalty may also be imposed for failure to register. Currently, interjurisdictional transporters are subject to the same penalty as others who fail to deliver the returns required by the Act, a penalty based on the amount of tax collectable or payable under the Act. An amendment imposes a $1,000 penalty on interjurisdictional transporters who fail to deliver a return. These amendments come into force on July 1, 2003.

Manufacturers of fuel are required to obtain a registration certificate, under the new section 2.1 of the Act. Reporting requirements are also imposed on manufacturers. These amendments also come into force on July 1, 2003.

Another amendment applies to all people required to deliver a return under the Act. Currently, the fine payable for failing to complete the information required in a return under the Act is $200. An amendment specifies that the fine is a minimum of $200 and a maximum of $5,000.

PART XII
GASOLINE TAX ACT

The Gasoline Tax Act is amended in relation to the duties of interjurisdictional transporters. It is an offence for an interjurisdictional transporter to fail to register under the Act, and an administrative penalty may also be imposed for failure to register. Currently, interjurisdictional transporters are subject to the same penalty as others who fail to deliver the returns required by the Act, a penalty based on the amount of tax collectable or payable under the Act. An amendment imposes a $1,000 penalty on interjurisdictional transporters who fail to deliver a return. These amendments come into force on July 1, 2003.

Manufacturers of gasoline, propane or aviation fuel are required to obtain a registration certificate, under the new section 2.1 of the Act. Reporting requirements are also imposed on manufacturers. These amendments also come into force on July 1, 2003.

PART XIII
HIGHWAY TRAFFIC ACT
AND A RELATED AMENDMENT

Section 7.1 of the Highway Traffic Act authorizes the Minister of Transportation to apply to have Ontario made a member of the reciprocal agreement known as the International Registration Plan. The Plan governs the issuance of permits for commercial motor vehicles engaged in interprovincial or international travel and the registration and licence fees for those vehicles, which are apportioned on the basis of the distance travelled by the vehicles within each jurisdiction that is a member of the Plan.

In this Part of the Bill, provisions are added to the Highway Traffic Act respecting the administration and enforcement of the International Registration Plan. New provisions govern the records to be kept by permit holders and the examination and inspection of records. They also provide for the assessment and reassessment of the fees owed by permit holders pursuant to the Plan and of the taxes owed by permit holders to other jurisdictions and collected by Ontario pursuant to the Plan. Provisions are added to allow for the sharing of information for the administration or enforcement of the Plan between the Minister of Transportation and other ministers, other member jurisdictions of the Plan and the governing body of the Plan. They also allow for the sharing of information between the Minister of Transportation and the Minister of Finance, to assist the latter in the administration or enforcement of the Fuel Tax Act, Gasoline Tax Act or Retail Sales Tax Act.

This Part of the Bill also amends the Highway Traffic Act to provide that the Ministry of Transportation may not issue motor vehicle permits unless the requirements of the Compulsory Automobile Insurance Act have been complied with.

PART XIV
INCOME TAX ACT

Amendments are made to the definitions of "middle tax rate" and "lowest tax rate" in subsection 4 (1) of the Income Tax Act to defer by one year the legislated decrease in the personal income tax rates. A corresponding amendment is made to subsection 3 (1) of the Act to defer by one year the elimination of the lower tier of the provincial surtax. Subsection 8.4.2 (3) of the Act is amended to defer by one year the legislated increase in the rate of the equity in education tax credit.

Subsection 4.1 (2) of the Act is amended to make the tax rate applicable to qualifying environmental trusts consistent with the tax rate applicable to corporations under the Corporations Tax Act.

An amendment to subsection 7 (2.4) of the Act increases the amount of the basic reduction from the 2002 value of $161 to $178.

References in subsection 8 (1) of the Act to residential/farm property are changed to residential property.

The new subsection 8 (7.3) of the Act amends the Ontario property tax credit to allow certain taxpayers in unorganized territories who receive their 2001 property tax bills in 2002 to include the amount of their property tax payment in computing their tax credit for either 2001 or 2002.

The new subsection 8 (16) and section 8.4.4 are enacted to create the Ontario school bus safety tax credit. These new provisions extend to unincorporated school bus operators the incentive currently available to corporations under the Corporations Tax Act. The incentive is available in respect of new school buses acquired after June 17, 2002 and before January 1, 2006 that meet the specified standards.

A technical amendment is made to section 8.7 of the Act. It provides that the Ontario research employee stock option tax credit is available to an employer in specified circumstances when the employer has a short taxation year.

A new section 8.9 of the Act creates a tax incentive for individuals who own Ontario Jobs and Opportunity Bonds. These are bonds, debentures and other securities that are issued by the Ontario Municipal Economic Infrastructure Financing Authority or a related entity and are designated by the Authority as Ontario Jobs and Opportunity Bonds. The Minister of Finance may also designate bonds, debentures and other securities as Ontario Jobs and Opportunity Bonds. The details of the tax incentive are to be set out in the regulations. The new section comes into force on proclamation.

PART XV
INSURANCE ACT

Section 121 of the Insurance Act is amended to permit regulations defining what is an automobile and including or excluding vehicles or classes of vehicles as automobiles. Section 121 is also amended to permit regulations deeming payments for income loss or loss of earning capacity under an income continuation benefit plan to include prescribed payments. Section 121 is also amended to permit regulations specifying terms and conditions governing the representation of a party to a dispute resolution proceeding under sections 279 to 284.

Section 230 of the Act is amended to require insurance agents to inform applicants for automobile insurance of the insurer or insurers within an affiliated group that they represent.

Section 236 of the Act is amended to provide that notice of non-renewal is not required with respect to prescribed types of contract in prescribed circumstances.

Section 243 of the Act is amended to provide that coverage under section 265 (uninsured automobile coverage) is limited to accidents in Canada, the United States and other designated jurisdictions.

Section 267.5 of the Act is amended to remove the protection from liability of an owner of an automobile, its occupants or persons present at the scene for health care expenses where a person has died or has sustained permanent serious disfigurement or permanent serious impairment of an important physical, mental or psychological function. The deductible amounts set out in section 267.5 that apply to awards for non-pecuniary loss arising from automobile accidents are eliminated in the case of damages for non-pecuniary loss that exceed $100,000 (or $50,000, in the case of damages for non-pecuniary loss under the Family Law Act).

Section 267.5 is also amended to specify that employers and others who are vicariously liable for the actions of a person protected from liability do not have, in respect of their vicarious liability, any greater liability than that person.

The new section 267.8.1 of the Act establishes an arbitration process in connection with section 267.8 of the Act. The new section requires persons who may be liable to provide certain collateral benefits to a plaintiff to submit to arbitration, upon request. The scope of the arbitration is to be specified by regulation. By a related amendment to section 267.8 of the Act, the amount of the damages to which the plaintiff is otherwise entitled will be reduced by such amount as may be determined through arbitration.

Section 267.11 of the Act is amended to provide that structured settlements and periodic payments provided by an insurer should not be grossed-up in a tort award.

A new section 268.0.1 is added to the Act to require the Motor Vehicle Accident Claims Fund to pay statutory accident benefits owing by an insurer that is subject to a winding-up order under the Winding-up and Restructuring Act (Canada).

Section 268.3 of the Act is amended to authorize the Superintendent to issue guidelines relating to treatment, goods and services in connection with medical and rehabilitation benefits provided under the Statutory Accident Benefits Schedule.

A new section 268.4 is added to the Act to provide that no action for damages may be commenced against any person conducting an assessment by a designated assessment centre if the person acts in good faith.

A revised subsection 282 (11.2) allows an arbitrator to order a representative of an insured person or an insurer in an arbitration proceeding to pay expenses of the arbitration personally in certain circumstances.

A new section 284.1 is added to the Act to prohibit a party to a dispute resolution proceeding under sections 279 to 284 from being represented for compensation by another person who is not a barrister or solicitor, except in accordance with the regulations.

A new section 289.1 requires the Superintendent to undertake a periodic review of Part VI of the Act (which governs automobile insurance) and the regulations made under that Part and to recommend amendments that he or she believes will improve the effectiveness and administration of the Part and the regulations.

Section 398 of the Act is amended to prevent a person, other than a barrister or solicitor, from holding themself out as an advisor, consultant, investigator or adjuster of claims against an insurer or an insured, including a claim for statutory accident benefits, unless the person complies with the terms and conditions prescribed in the regulations.

PART XVI
LAND TRANSFER TAX ACT

References in the Land Transfer Tax Act to the "farmlands property class" are replaced with "farm property class".

PART XVII
MINING TAX ACT
AND ITS PREDECESSOR

The Mining Tax Act and its predecessor Act are amended to specify that depreciation for mines, other than new mines or major expansions, is limited to a maximum of 30 per cent for mining assets and 15 per cent for processing and transportation assets, calculated on a straight-line basis for the cost of additions made during a taxation year.

These amendments are made effective as of April 1, 1986 and apply with respect to taxation years ending after March 31, 1986. A specified category of operators continue to be subject to the current rules, instead of these new rules, for specified taxation years.

PART XVIII
MINISTRY OF REVENUE ACT

Section 11 of the Ministry of Revenue Act is amended to revoke an Order in Council that remitted to the Toronto Blue Jays Baseball Club and other Ontario teams that are members of a professional sports league certain taxes payable by them under the Employer Health Tax Act.

PART XIX
MINISTRY OF TREASURY
AND ECONOMICS ACT

The amendments to the Ministry of Treasury and Economics Act concern the Public Accounts. Currently, the Public Accounts must include information that other Acts require to be included. The amendment will permit such information to be set out, instead, in the supplementary financial information that is laid before the Assembly.

PART XX
MOTOR VEHICLE
ACCIDENT CLAIMS ACT

Section 2 of the Motor Vehicle Accident Claims Act is amended to authorize the Lieutenant Governor in Council to assess certain insurers with respect to payments out of the Motor Vehicle Accident Claims Fund in connection with a winding-up order under the Winding-up and Restructuring Act (Canada).

The new subsection 6 (3.1) of the Act specifies that the Motor Vehicle Accident Claims Fund does not pay statutory accident benefits in respect of an automobile accident that occurs outside Ontario.

A new section 6.1 is added to the Act. It provides a mechanism for the payment of statutory accident benefits owing by an insurer that is subject to a winding-up order under the Winding-up and Restructuring Act (Canada).

A technical amendment is made to section 25 of the Act, concerning payments to non-residents. The amendment specifies that any amount payable out of the Motor Vehicle Accident Claims Fund to a non-resident will not exceed the amount that would be payable in equivalent circumstances to an Ontario resident under the law of the non-resident's jurisdiction.

A new section 27.1 is added to the Act to permit the Minister to require a person who has a cause of action against the Superintendent of Financial Services or against an uninsured driver to give the Minister prescribed information and documents and to undergo examinations by a health care professional.

Under the new section 29, it is an offence to make a false or misleading statement with respect to a claim for benefits or payment under the Act, to wilfully fail to inform the Superintendent of a material change in circumstances in connection with a person's entitlement to a benefit, or to make a false or misleading statement to obtain goods or services from the Motor Vehicle Accident Claims Fund.

PART XXI
MUNICIPAL ACT, 2001

A new section 308.1 is added to the Municipal Act, 2001. The new section authorizes upper-tier and single-tier municipalities to establish tax ratios below 0.25 for the farm property class.

Section 331 of the Act is amended to permit municipalities to make a complaint to the Assessment Review Board about properties that are identified by the assessment corporation as comparable properties to an eligible property. Currently, only the owner of the eligible property may make such a complaint.

Subsection 357 (1) of the Act, governing the power of a municipality to cancel, reduce or refund taxes, is amended. A technical amendment is made with respect to a municipality's power if a building is razed or damaged. A further amendment authorizes municipalities to cancel, reduce or refund taxes in cases of sickness or extreme poverty.

Technical amendments are made to section 361 of the Act, relating to municipal tax rebate programs for charities. The amendments specify that tax rebates apply not only to charities that pay taxes directly but also to charities that are tenants and that pay amounts on account of taxes.

Technical amendments are also made to section 364 of the Act, relating to rebates for vacant units. The amendments specify that, for the purposes of this section, portions of a property within any of the commercial classes shall be deemed to be one property, and portions of a property within any of the industrial classes shall be deemed to be one property.

PART XXII
MUNICIPAL TAX
ASSISTANCE ACT

An obsolete definition in the Municipal Tax Assistance Act is repealed.

PART XXIII
NORTHERN SERVICES
BOARDS ACT

References in the Northern Services Boards Act to the "residential/farm property class" are changed to "residential property class" and references to the "farmlands property class" are changed to "farm property class".

PART XXIV
ONTARIO MUNICIPAL
ECONOMIC INFRASTRUCTURE
FINANCING AUTHORITY ACT, 2002

A new statute, the Ontario Municipal Economic Infrastructure Financing Authority Act, 2002 is enacted. The text of the Act is set out in Schedule A to the Bill. It comes into force on proclamation.

The new Act governs the Ontario Municipal Economic Infrastructure Financing Authority. The Authority is a corporation without share capital, composed of the members of its board of directors. They are appointed by the Lieutenant Governor in Council.

The objects of the Authority are set out in section 3, and they include providing financing for municipalities and other public bodies for purposes specified in the regulations.

Its powers are set out in section 4. The Authority and related entities cannot borrow, invest or manage financial risks without the consent of the Minister of Finance. The Authority cannot establish or acquire a subsidiary, trust, partnership or other entity without the consent of the Minister.

Section 8 authorizes the Minister of Finance to issue policies and directives that the Authority and related entities are required to implement.

Section 16 authorizes the Crown to borrow money and advance it to the Authority and its subsidiaries. The Lieutenant Governor in Council may also authorize the purchase of securities of the Authority and its subsidiaries. Certain other financial powers and duties of the Minister of Finance are set out in sections 17 and 18.

Section 19 specifies that securities issued by the Authority or by subsidiaries, trusts, partnerships and other entities established or acquired by the Authority are authorized investments for trusts.

Section 22 governs the liability of directors, officers, employees, partners, trustees and agents of the Authority and related entities. They are not liable for their acts and omissions in good faith in the exercise of powers and performance of duties under the Act. The Authority and related entities remain liable for the acts and omissions of their directors, officers, employees and agents.

PART XXV
RETAIL SALES TAX ACT

Technical amendments are made to the Retail Sales Tax Act concerning the taxation of services provided in connection with computer programs. The definition of "taxable service" in subsection 1 (1) of the Act is amended to authorize the Minister of Finance to define, in the regulations, those services that are taxable services relating to computer programs. A related amendment is made to subsection 7 (1) of the Act. These amendments apply with respect to sales and contracts entered into on or after July 19, 2002.

A technical amendment is made to subsection 2 (9) of the Act to permit the Minister to determine the fair value of non-taxable services for the purposes of the Act. This amendment is made effective on July 19, 2002.

Currently, ready-mix concrete is exempt from tax in specified circumstances. An amendment to paragraph 68 of subsection 7 (1) of the Act deletes the reference to "ready-mix concrete" and replaces it with "reinforced concrete, as defined by the Minister". This amendment is made effective on June 18, 2002.

Under the new subsection 9 (6) of the Act, municipalities are exempt from taxation under the Act on the acquisition of tangible personal property as a result of the transfer of a water or sewage works under the Municipal Water and Sewage Transfer Act, 1997. This amendment is made effective on May 27, 1997.

Vendors are required to remit to the Minister of Finance the taxes collected under the Act. An amendment to section 11 will permit vendors to remit taxes to other authorized persons. Complementary technical amendments are made to sections 2 and 14 of the Act. These amendments come into force on January 1, 2003.

PART XXVI
SECURITIES ACT

The maximum penalties for offences under the Securities Act are increased from a fine of $1 million and imprisonment for two years to a fine of $5 million and imprisonment for five years less a day. (See the amendments to section 122 of the Act.)

If a person or company fails to comply with Ontario securities law, the Ontario Securities Commission ("OSC") is given power to order the payment of an administrative penalty of up to $1 million and to order the disgorgement of amounts obtained as a result of the non-compliance. (See the amendments to section 127 and subsections 3.4 (2) and 143 (2) of the Act and the new section 129.2 of the Act.)

The amendments prohibit engaging in acts that a person or company knows or reasonably ought to know perpetrate a fraud or result in a misleading appearance of trading activity in, or an artificial price for, a security. The amendments also contain a general prohibition on making statements that a person or company knows or reasonably ought to know are misleading or untrue and significantly affect, or would reasonably be expected to have a significant effect on, the market price or value of a security. (See the new sections 126.1 and 126.2 of the Act.)

The OSC is authorized to conduct reviews of disclosures that have been made or that ought to have been made by a reporting issuer or mutual fund. (See the new section 20.1 of the Act.)

The OSC is given power to make rules requiring the appointment of and prescribing requirements for audit committees, requiring systems of internal controls, requiring disclosure controls and procedures, requiring chief executive officers and chief financial officers to provide certifications related to internal controls and to disclosure controls and procedures, and defining auditing standards for reporting on internal controls. (See the amendments to subsection 1 (1.1) and 143 (1) of the Act.)

The Act is amended to add new Part XXIII.1 which provides for civil liability for secondary market disclosure. Specified transactions are exempted from the new Part. Related amendments are made to section 1 (definitions), section 75 (duty to disclose material changes), section 142 (Crown liability) and section 143 of the Act (the OSC's authority to make rules).

In the new Part, rights of action are created in section 138.3. These rights of action are in addition to any rights that may otherwise exist. (See the new section 138.13 of the Act.)

The rights of action created by section 138.3 include a right of action for damages by persons or companies who acquire or dispose of the securities of a responsible issuer during a period of time in which there is an uncorrected misrepresentation in a document released by the responsible issuer or by a person with actual, implied or apparent authority, or in a public oral statement by such a person or by an influential person (a defined expression) relating to the affairs of the responsible issuer. The right of action is given to persons or companies acquiring or disposing of the securities of the responsible issuer between the time the misrepresentation was made and the time it was publicly corrected.

Section 138.3 also creates a right of action for damages by persons or companies who acquire or dispose of an issuer's security during a period in which a responsible issuer fails to make a timely disclosure of a material change. The period ends when the responsible issuer makes the required disclosure.

These rights of action lie against specified persons and companies in the circumstances described in the section: (1) the responsible issuer; (2) the person making the public oral statement; (3) each director or officer of the responsible issuer; (4) an influential person; (5) each director or officer of the influential person; and (6) each expert (a defined word). Section 138.3 relieves directors and officers of influential persons from liability under this section if they are also liable as directors or officers of a responsible issuer.

The liability of each of these persons or companies is limited under the new Part. The liability limit for each of them is specified in the definition of "liability limit" in section 138.1.

The court is permitted to treat multiple misrepresentations or multiple instances of failure to make timely disclosure as a single misrepresentation or single failure to make timely disclosure, respectively, if the multiple misrepresentations or multiple failures have a common subject matter or if the multiple misrepresentations have a common content. Section 138.3 also limits liability in situations where the public oral statement was made by a person who has apparent authority but who does not have actual or implied authority.

In the new Part, section 138.4 sets out a plaintiff's burden of proof in a proceeding under section 138.3. It also sets out defences that are available in such a proceeding.

Sections 138.5 to 138.7 in the new Part govern awards of damages in proceedings under section 138.3. Section 138.5 describes the manner in which damages are to be assessed. Section 138.6 describes how the damages are to be allocated among defendants. Section 138.7 limits the damages payable by a person or company.

Procedural matters are addressed in the new sections 138.8 to 138.14. Section 138.14 sets out the limitation periods that apply to proceedings under section 138.3. A proceeding cannot be commenced without leave of the court. Section 138.9 requires the plaintiff to issue a news release upon being given leave to commence the proceeding, and to give the news release and other documents to the OSC. Section 138.10 specifies that a proceeding cannot be discontinued, stayed, settled or dismissed for delay without leave of the court. It also specifies the matters that the court is required to consider when approving a settlement.

PART XXVII
TAX INCENTIVE ZONES ACT
(PILOT PROJECTS), 2002

A new statute, the Tax Incentive Zones Act (Pilot Projects), 2002 is enacted. The text of the Act is set out in Schedule B to the Bill.

Under the new Act, the Lieutenant Governor in Council may establish tax incentive zones. A tax incentive zone may be created for a limited period. In a tax incentive zone, persons who meet prescribed criteria and who enter into a tax incentive agreement may have certain taxes, fees and charges reduced or cancelled.

The Act authorizes the Minister of Finance to make regulations reducing or cancelling certain provincial taxes, fees and charges in tax incentive zones. The regulations will specify which provincial taxes, fees and charges may be reduced or cancelled and may impose conditions and restrictions on the reduction or cancellation. Regulations may also reduce or cancel school taxes in tax incentive zones.

The Act authorizes municipalities to pass by-laws reducing or cancelling municipal taxes under the Municipal Act, 2001, with the prior approval of the Minister of Municipal Affairs and Housing. Municipalities may also reduce or cancel fees and charges paid or payable to them under statutes to be specified by regulation.

A person who enters into a tax incentive agreement but fails to comply with it will be required to pay the full amount of the taxes, fees and charges that were reduced or cancelled under the agreement or a lesser amount determined by the Minister of Finance.

PART XXVIII
TOBACCO TAX ACT
AND RELATED AMENDMENTS

The Tobacco Tax Act is amended in relation to the duties of interjurisdictional transporters. It is an offence for an interjurisdictional transporter to fail to obtain a registration certificate under the Act, and an administrative penalty may also be imposed for failing to obtain one. Currently, interjurisdictional transporters are subject to the same penalty as others who fail to deliver the returns required by the Act, a penalty based on the amount of tax collectable or payable under the Act. An amendment imposes a $1,000 penalty on interjurisdictional transporters who fail to deliver a return. These amendments come into force on July 1, 2003.

Section 7 of the Act is also amended to establish an administrative penalty to be paid by manufacturers who do not have the registration certificate required by the Act. This amendment also comes into force on July 1, 2003.

Previous amendments to the Act concerning the holders of a permit to manufacture tear tape, which are not yet in force, are re-enacted as consequential amendments.

[37] Bill 198 As amended by Committee of Whole House (PDF)

Bill 198 2002

An Act to implement
Budget measures
and other initiatives
of the Government


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 Part XVI Part XVII Part XVIII Part XIX Part XX Part XXI Part XXII Part XXIII Part XXIV Part XXVI Part XXVII Part XXVIII Part XXIX Part XXX Schedule A Schedule B	Assessment Act Business Corporations Act Commodity Futures Act Community Small Business Investment Funds Act Compulsory Automobile Insurance Act Corporations Tax Act Education Act Electricity Act, 1998 Employer Health Tax Act Financial Administration Act Fuel Tax Act Gasoline Tax Act Highway Traffic Act and a Related Amendment Income Tax Act Insurance Act Land Transfer Tax Act Mining Tax Act and Its Predecessor Ministry of Revenue Act Ministry of Treasury and Economics Act Motor Vehicle Accident Claims Act Municipal Act, 2001 Municipal Tax Assistance Act Northern Services Boards Act Ontario Municipal Economic Infrastructure Financing Authority Act, 2002 Retail Sales Tax Act Securities Act Tax Incentive Zones Act (Pilot Projects), 2002 Tobacco Tax Act and Related Amendments Commencement and Short Title Ontario Municipal Economic Infrastructure Financing Authority Act, 2002 Tax Incentive Zones Act (Pilot Projects), 2002
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