Bill 41, The Right Choices Act (Budget Measures), 2003

Ecker, Hon. Janet Minister of Finance

Versions

Original

[37] Bill 41 Original (PDF)

Bill 41 2003

An Act to implement
Budget measures

CONTENTS

Schedule A

Schedule B

Schedule C

Schedule D

Schedule E

Schedule F

Schedule G

Schedule H

Schedule I

Schedule J

Schedule K

Schedule L

Amendments to the Assessment Act

Amendments to the Business Corporations Act

Amendments to the Commodity Futures Act

Amendments to the Community Small Business Investment Funds Act

Amendments to the Corporations Tax Act

Amendments to the Electricity Act, 1998

Amendments to the Income Tax Act

Amendments to the Limitations Act, 2002

Amendments to the Municipal Act, 2001

Amendments to the Retail Sales Tax Act

Amendments to the Securities Act

Trust Beneficiaries' Liability Act, 2003

______________

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

Schedules enacted

1. Schedules A to L are hereby enacted.

Commencement

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

Same

(2) Each of the Schedules come into force as provided in the commencement section at or near the end of the Schedule.

Same

(3) If a 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

3. The short title of this Act is The Right Choices Act (Budget Measures), 2003.

SCHEDULE A
AMENDMENTS TO THE
ASSESSMENT ACT

1. (1) Clause 2 (2) (f) of the Assessment Act, as enacted by the Statutes of Ontario, 2001, chapter 23, section 1, is repealed and the following substituted:

(f) prescribing buildings or structures or portions of buildings or structures for the purposes of subsection 19.0.1 (1) and prescribing their assessed value or the manner of determining their assessed value for the purposes of that subsection.

(2) 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, 2001, chapter 23, section 1, 2002, chapter 17, Schedule F, Table and 2002, chapter 22, section 1, is amended by adding the following subsection:

Restriction, prescribed taxation year under s. 19.1

(7) If the Minister prescribes a taxation year for the purposes of section 19.1, the regulation in which the taxation year is prescribed is void if it is filed under the Regulations Act less than 18 months before the first day of that taxation year.

2. Paragraph 27 of subsection 3 (1) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 29, section 3, is repealed and the following substituted:

Large non-profit theatres

27. Land on which is situated a theatre that contains 1,000 seats or more and that is used to present, on a total of at least 183 days in the taxation year, live performances of drama, comedy, music or dance, including opera or ballet, that are not presented with the intention of generating profit. Land on which such a theatre is being constructed. This paragraph applies only if the theatre is owned and operated by a non-profit corporation without share capital. This paragraph does not apply to land used as a dinner theatre, nightclub, tavern, cocktail lounge, bar, striptease club or similar establishment, and it does not apply to land on which such an establishment is being constructed.

3. Subsection 14 (1) of the Act, as amended by the Statutes of Ontario, 1992, chapter 17, section 4, 1997, chapter 5, section 9, 1997, chapter 29, section 6, 1997, chapter 31, section 143, 1997, chapter 43, Schedule G, section 18 and 2000, chapter 25, section 4, is amended by adding the following paragraph:

21. Such other information as may be prescribed by the Minister.

4. Subsection 19.0.1 (1) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 23, section 2, is amended by striking out "or" at the end of clause (a), by adding "or" at the end of clause (b) and by adding the following clause:

(c) by the Minister for a particular building or structure or portion of a building or structure specified by the Minister, as prescribed by the Minister.

5. Section 19.1 of the Act, as enacted by the Statutes of Ontario, 1997, chapter 5, section 13, is repealed and the following substituted:

Assessment, single years and averages

19.1 (1) Subject to subsections (2) and (3), land shall be assessed for a taxation year at the current value of the land for the taxation year.

Same, for prescribed taxation year

(2) If the Minister prescribes a taxation year for the purposes of this section, land shall be assessed for the prescribed taxation year at the average of the current value of the land for the prescribed taxation year and the current value of the land for the preceding taxation year.

Same, after prescribed taxation year

(3) If the Minister prescribes a taxation year for the purposes of this section, land shall be assessed for any taxation year after the prescribed taxation year at the average of the current value of the land for the taxation year and the current value of the land for each of the two preceding taxation years.

Commencement

6. (1) Subject to subsection (2), this Schedule comes into force on the day The Right Choices Act (Budget Measures), 2003 receives Royal Assent.

Same

(2) Section 2 shall be deemed to have come into force on January 1, 2003.

SCHEDULE B
AMENDMENTS TO THE
BUSINESS CORPORATIONS ACT

1. Subsection 241 (1) of the Business Corporations Act is repealed and the following substituted:

Notice of dissolution

(1) Where the Director is notified by the Minister of Finance that a corporation is in default of complying with any of the following Acts, the Director may give notice by registered mail to the corporation or by publication once in The Ontario Gazette that an order dissolving the corporation will be issued unless the corporation remedies its default within 90 days after the notice is given:

1. Corporations Tax Act.

2. Employer Health Tax Act.

3. Fuel Tax Act.

4. Gasoline Tax Act.

5. Land Transfer Tax Act.

6. Retail Sales Tax Act.

7. Tobacco Tax Act.

Commencement

2. This Schedule comes into force on the day The Right Choices Act (Budget Measures), 2003 receives Royal Assent.

SCHEDULE C
AMENDMENTS TO THE
COMMODITY FUTURES ACT

1. Clause 59.2 (b) of the Commodity Futures Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 11, is repealed and the following substituted:

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

2. Subsection 60 (2.1) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 12, is repealed and the following substituted:

Exception

(2.1) A person or company is not entitled to participate in a proceeding in which an order may be made under paragraph 9 or 10 of subsection (1) solely on the basis that the person or company may be entitled to receive any amount paid under the order.

Commencement

3. (1) Subject to subsection (2), this Schedule comes into force on the day The Right Choices Act (Budget Measures), 2003 receives Royal Assent.

Same

(2) Section 1 comes into force on a day to be named by proclamation of the Lieutenant Governor.

SCHEDULE D
AMENDMENTS TO THE
COMMUNITY SMALL BUSINESS
INVESTMENT FUNDS ACT

1. Clause 16.1 (2) (d) of the Community Small Business Investment Funds Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 6, is repealed and the following substituted:

(d) if the aggregate cost of the corporation's investments, each of which is an eligible investment in a research business that was held at the end of the preceding year, is equal to at least 50 per cent, or such other percentage as may be prescribed, of the amount of its capital available for investment as determined on August 31 of that year or at the end of that year, whichever is less, or if, instead, the corporation gives the undertaking described in subsection (5).

2. (1) Subsection 18 (1) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 85 and 1999, chapter 9, section 55, is amended by adding "and" at the end of subclause (b) (iv) and by repealing clause (c).

(2) Subsection 18 (3) of the Act is repealed.

(3) Subsections 18 (5) and (6) of the Act are repealed.

(4) Subsection 18 (7) of the Act, as amended by the Statutes of Ontario, 1994, chapter 17, section 85, is repealed.

(5) Subsection 18 (9) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 17, section 85, is repealed.

3. (1) Subsection 18.1 (5) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 23, section 13, is amended by striking out "15 per cent" and substituting "25 per cent".

(2) Paragraph 2 of subsection 18.1 (11) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 56, is amended by striking out "$5 million" and substituting "$6 million".

4. (1) 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 and 2002, chapter 22, section 24, is amended by striking out "January 1, 2004" and substituting "January 1, 2005".

(2) Paragraph 4 of subsection 18.5 (1) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 59, is repealed.

5. Paragraph 1 of subsection 20 (2) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 61, is repealed.

6. (1) Subsection 24.1 (1) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 14 and amended by 1999, chapter 9, section 62, is repealed.

(2) Subsection 24.1 (2) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 62, is repealed.

(3) 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 and 2002, chapter 22, section 25, is repealed and the following substituted:

Investment tax credit

(3) Upon application, the Minister may allow a labour sponsored investment fund corporation to do one of the following things if the corporation invests in a community small business investment fund corporation before January 1, 2005:

1. The corporation may treat twice the amount invested as an amount invested in an eligible business that is a small business, for the purpose of determining whether the corporation meets the small business investment requirements of section 18.1; and it may treat the amount invested as an amount invested in an eligible investment for the purpose of determining whether the corporation meets the requirements of subsection 17 (1).

2. The corporation may reduce the amount of tax owing under subsection 28 (3) for the calendar year in which the funds are invested. The amount of the tax reduction is twice the amount invested.

(4) Subsection 24.1 (3.1) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 62, is repealed.

(5) Subsection 24.1 (4) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule C, section 14 and amended by 1998, chapter 34, section 20 and 1999, chapter 9, section 62, is repealed and the following substituted:

Additional credit

(4) If a community small business investment fund corporation makes one or more eligible investments under Part III.1 in a particular year, the Minister may, at the end of the calendar year in which the investment is made, allow the labour sponsored investment fund corporation a credit against the small business investment requirements of that corporation under section 18.1 that is equal to the amount calculated using the formula,

A × B

in which,

"A" is the percentage of the Class A shares of the community small business investment fund corporation held by the labour sponsored investment fund corporation, and

"B" is the amount invested by the community small business investment fund corporation in eligible investments.

Transition

(4.1) Despite subsection (4), if a community small business investment fund corporation makes one or more eligible investments under Part III.1 in a particular year, the Minister may, at the end of the calendar year in which the investment is made, allow the labour sponsored investment fund corporation a credit against the investment requirements of the labour sponsored investment fund corporation under subsection 17 (1) that is equal to the amount calculated using the formula set out in subsection (4),

(a) if the labour sponsored investment fund corporation was registered before 2003;

(b) if the labour sponsored investment fund corporation was created for the sole purpose of investing in corporations that qualify as a community small business investment fund corporation; and

7. (1) 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, 2001, chapter 23, section 16 and 2002, chapter 22, section 26, is amended by striking out "January 1, 2004" and substituting "January 1, 2005".

(2) 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 and 2002, chapter 22, section 26, is amended by striking out "January 1, 2004" and substituting "January 1, 2005".

(3) Subsection 25 (4.9) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 21 and amended by 1999, chapter 9, section 63, 2001, chapter 23, section 16 and 2002, chapter 22, section 26, is repealed and the following substituted:

Amount of incentive

(4.9) The amount of the investment incentive referred to in subsection (4.3) is the amount calculated using the formula,

C + D

in which,

"C" is the amount that is the lesser of,

(a) $37,500, and

(b) 7.5 per cent of the amount paid by the qualifying individual or qualifying corporation before January 1, 2003 to the community small business investment fund corporation on the issue of Class A shares, and

"D" is the amount that is the lesser of,

(a) $75,000, and

(b) 15 per cent of the amount paid by the qualifying individual or qualifying corporation after December 31, 2002 and before January 1, 2005 to the community small business investment fund corporation on the issue of Class A shares.

(4) Subsection 25 (4.10) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 21 and amended by 1999, chapter 9, section 63, is repealed and the following substituted:

Amount of additional incentive

(4.10) The amount of the additional incentive referred to in subsection (4.4) is the amount calculated using the formula,

E + F

in which,

"E" is the amount that is the lesser of,

(a) $37,500, and

(b) 7.5 per cent of the amount invested by the community small business investment fund corporation in eligible investments under Part III.1 before January 1, 2003 multiplied by the percentage of Class A shares of the corporation that are held by the qualifying individual or qualifying corporation, and

"F" is the amount that is the lesser of,

(a) $75,000, and

(b) 15 per cent of the amount invested by the community small business investment fund corporation in eligible investments under Part III.1 after December 31, 2002 multiplied by the percentage of Class A shares of the corporation that are held by the qualifying individual or qualifying corporation.

8. (1) Clause (c) of the definition of "P" in subsection 28.1 (1) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 9, section 69, is repealed and the following substituted:

(2) Subsection 28.1 (1.1) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 24 and amended by 1999, chapter 9, section 69, is amended by striking out "$37,500" and substituting "$75,000".

Commencement

9. (1) Subject to subsection (2), this Schedule comes into force on the day The Right Choices Act (Budget Measures), 2003 receives Royal Assent.

Same

(2) Sections 1 to 8 shall be deemed to have come into force on May 22, 2003.

SCHEDULE E
AMENDMENTS TO THE
CORPORATIONS TAX ACT

1. Subsection 1 (2) of the Corporations Tax Act, as amended by the Statutes of Ontario, 1994, chapter 14, section 1, 1997, chapter 43, Schedule A, section 1 and 2000, chapter 42, section 10, is amended by adding the following definition:

"Ontario allocation factor", of a corporation for a taxation year, means, except where otherwise indicated, the fraction equal to "A/B" where,

(a) "A" equals the amount of taxable income of the corporation, or the taxable income of the corporation earned in Canada if the corporation is a corporation to which subsection 2 (2) applies, that would be determined for the taxation year if no amount were deductible under any of sections 12 to 13.5 or 13.7 and that would not be considered for the purposes of section 39 to have been earned in jurisdictions other than Ontario, except that the taxable income or the taxable income earned in Canada shall be deemed to be $1 if there would otherwise be no taxable income or taxable income earned in Canada, and

(b) "B" equals the taxable income of the corporation, or the taxable income of the corporation earned in Canada if the corporation is a corporation to which subsection 2 (2) applies, that would be determined for the taxation year if no amount were deductible under any of sections 12 to 13.5 or 13.7, except that the taxable income or the taxable income earned in Canada shall be deemed to be $1 if there would otherwise be no taxable income or taxable income earned in Canada; ("coefficient de répartition de l'Ontario")

2. Paragraph 1 of subsection 5.2 (2) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 27, is amended by striking out "within the meaning of subsection 12 (1)".

3. Paragraph 2 of subsection 5.3 (3) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 74, is amended by striking out "as defined in subsection 12 (1)".

4. Section 11 of the Act, as amended by the Statutes of Ontario, 1992, chapter 3, section 2, 1994, chapter 14, section 4, 1996, chapter 29, section 37, 1997, chapter 43, Schedule A, section 5, 1998, chapter 34, section 28, 1999, chapter 9, section 75, 2000, chapter 10, section 1, 2001, chapter 8, section 19, 2001, chapter 23, section 22 and 2002, chapter 22, section 38, is amended by adding the following subsection:

Foreign non-business income tax

(12.1) For the purposes of this Act, subsection 20 (12.1) of the Income Tax Act (Canada) does not apply to allow a deduction in computing the income of a corporation for a taxation year ending after December 31, 1997 except to the extent that the portion of the foreign non-business income tax paid by the corporation to which that subsection applies was not included in computing the corporation's non-business income tax for any taxation year under subsection 126 (4.1) of that Act.

5. The definition of "Ontario allocation factor" in subsection 11.2 (1) of the Act, as enacted by the Statutes of Ontario, 2001, chapter 23, section 23, is repealed.

6. The definition of "Ontario allocation factor" in subsection 12 (1) of the Act, as amended by the Statutes of Ontario, 1998, chapter 5, section 7, 1998, chapter 34, section 29, 1999, chapter 9, section 76 and 2000, chapter 42, section 11, is repealed.

7. The definition of "Ontario allocation factor" in subsection 13 (1) of the Act is repealed.

8. Subsection 13.1 (2) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 8, is repealed.

9. The definition of "Ontario allocation factor" in subsection 13.2 (7) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 30, is repealed.

10. The definition of "Ontario allocation factor" in subsection 13.3 (11) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 31, is repealed.

11. Subsection 13.4 (9) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 78, is repealed.

12. The definition of "Ontario allocation factor" in subsection 13.5 (1) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 12, is repealed.

13. Section 13.6 of the Act, as enacted by the Statutes of Ontario, 2002, chapter 23, section 2, is amended by adding the following subsection:

Exception

(1.1) A corporation is not entitled to claim a deduction under both subsection (1) and section 13.7 in respect of a qualifying electricity generating facility that is, in whole or in part, a qualifying facility or qualifying property for the purposes of section 13.7, except in accordance with section 13.8.

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

Incentive for self-generated
electricity supply

13.7 (1) In this section,

"facility" has the meaning prescribed by the Minister; ("centrale")

"qualifying facility" means a facility described in subsection (2); ("centrale admissible")

"qualifying property" means property prescribed by the Minister. ("bien admissible")

Qualifying facility

(2) A facility is a qualifying facility for the purposes of this section if the following criteria are satisfied:

1. The construction or installation of the facility commences after November 25, 2002.

2. The facility commences generating electricity before January 1, 2008.

3. All or substantially all of the electricity produced by the facility is generated from an alternative or renewable source of energy, as prescribed by the Minister.

4. Such other conditions as may be prescribed by the Minister are satisfied.

Amount of incentive

(3) In computing its income from a business for the taxation year in which it commences generating electricity from a qualifying facility, a corporation may deduct an incentive equal to the amount calculated using the formula,

A/B

in which,

"A" is the capital cost of the qualifying property, as determined in accordance with the rules prescribed by the Minister, and

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

Exception

(4) A corporation is not entitled to claim a deduction under both subsection (3) and section 13.6 in respect of a qualifying facility or qualifying property that is, in whole or in part, a qualifying electricity generating facility for the purposes of section 13.6, except in accordance with section 13.8.

Partnership

(5) If a corporation is a member of a partnership at the end of a taxation year and 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 a qualifying property that would qualify for the tax incentive under subsection (3) if the expenditure had been made by a corporation, the portion of the capital cost that may reasonably be considered to be the corporation's share of the capital cost may be included by the corporation in determining the amount of its tax incentive for the taxation year.

Same

(6) Despite subsection (5), no amount may be deducted under this section by a corporation in respect of an expenditure incurred by a partnership in which the corporation is a limited partner.

Regulations

(7) The Minister may make regulations,

(a) prescribing those matters that are required or permitted to be prescribed by the Minister under this section;

(b) prescribing rules for determining when construction or installation of a facility commences;

(c) prescribing rules for determining whether a qualifying facility commences generating electricity before January 1, 2008;

(d) prescribing rules for determining the capital cost of a qualifying property for the purposes of this section;

(e) prescribing rules governing the calculation of the deduction when a corporation is a member of a partnership.

Electricity-related incentives

13.8 The Minister may make regulations prescribing circumstances in which a corporation is entitled to a deduction under both sections 13.6 and 13.7 in respect of a facility or property that is, in whole or in part, a qualifying electricity generating facility for the purposes of section 13.6 and a qualifying facility or qualifying property for the purposes of section 13.7.

15. Subclause 14 (5) (e) (i) of the Act, as amended by the Statutes of Ontario, 1998, chapter 5, section 8, 1998, chapter 34, section 32, 1999, chapter 9, section 79 and 2000, chapter 42, section 13, is amended by striking out "and" at the end of sub-subclause (F) and by adding the following sub-subclause:

(G) under section 13.7 in respect of the corporation's share of the capital costs incurred by the partnership in the fiscal period, and

16. (1) Clause 35 (1) (a) of the Act, as amended by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 16, 1998, chapter 34, section 37, 1999, chapter 9, section 80 and 2000, chapter 42, section 14, is amended by striking out "any of sections 12, 13, 13.1, 13.2, 13.3, 13.4 and 13.5" and substituting "any of sections 12 to 13.5 or 13.7".

(2) The definition of "A" in subsection 35 (2) of the Act, as amended by the Statutes of Ontario, 1998, chapter 5, section 9, 1998, chapter 34, section 37, 1999, chapter 9, section 80 and 2000, chapter 42, section 14, is amended by striking out "any of sections 12, 13, 13.1, 13.2, 13.3, 13.4 and 13.5" and substituting "any of sections 12 to 13.5 or 13.7".

(3) Clause 35 (3) (a) of the Act is repealed.

(4) Clause 35 (3) (c) of the Act, as amended by the Statutes of Ontario, 1998, chapter 5, section 9, 1998, chapter 34, section 37, 1999, chapter 9, section 80 and 2000, chapter 42, section 14, is amended by striking out "any of sections 12, 13, 13.1, 13.2, 13.3, 13.4 and 13.5" and substituting "any of sections 12 to 13.5 or 13.7".

(5) Clause 35 (3) (d) of the Act, as amended by the Statutes of Ontario, 1998, chapter 5, section 9, 1998, chapter 34, section 37, 1999, chapter 9, section 80 and 2000, chapter 42, section 14, is amended by striking out "any of sections 12, 13, 13.1, 13.2, 13.3, 13.4 and 13.5" in the portion before subclause (i) and substituting "any of sections 12 to 13.5 or 13.7".

(6) Subclause 35 (3) (d) (ii) of the Act, as amended by the Statutes of Ontario, 1998, chapter 5, section 9, 1998, chapter 34, section 37, 1999, chapter 9, section 80 and 2000, chapter 42, section 14, is amended by striking out "any of sections 12, 13, 13.1, 13.2, 13.3, 13.4 and 13.5" and substituting "any of sections 12 to 13.5 or 13.7".

17. Subsection 43.4 (11) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 18, is repealed and the following substituted:

Regulations

(11) The Minister may make regulations,

(a) prescribing the method of calculating the amount of salaries or wages that shall be deemed to be paid by a corporation in a previous taxation year for the purposes of subsection (3.1);

(b) prescribing an alternative method for calculating the amount of the co-operative education tax credit of a corporation for a taxation year relating to a qualifying work placement for which the corporation is entitled to a tax credit under this section for the period before March 28, 2003 and for which the corporation is entitled to an apprenticeship tax credit under section 43.13 for the period after March 27, 2003.

Same, transition

(12) A regulation made by the Lieutenant Governor in Council under subsection (11) before the date on which that subsection was re-enacted by section 17 of Schedule E to The Right Choices Act (Budget Measures), 2003 shall be deemed on and after that date to have been made by the Minister.

18. (1) Subsections 43.9 (3) and (4) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 23, are repealed and the following substituted:

Amount of tax credit

(3) Subject to subsection (20), the amount of a qualifying corporation's Ontario business-research institute tax credit for a taxation year is the sum of all amounts each of which is in respect of an eligible contract equal to 20 per cent of the amount calculated using the formula,

A × (B/C)

in which,

"A" is the total of all qualified expenditures incurred during the taxation year and after May 6, 1997 under the contract by the corporation, to the extent that no tax credit has been claimed under this section for a prior taxation year in respect of the expenditures,

"B" is the number of days in the taxation year after May 6, 1997 that the corporation is not connected to the eligible research institute that entered into the eligible contract or to any other eligible research institute that carries out the scientific research and experimental development that is to be performed under the contract, and

"C" is the number of days in the taxation year after May 6, 1997.

Qualifying corporation

(4) A corporation is a qualifying corporation for a taxation year in respect of an eligible contract with an eligible research institute,

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

(b) if the corporation or a partnership of which it is a member, but not a specified member, entered into the contract with the eligible research institute.

(2) Subsection 43.9 (5) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 23, is amended by striking out the portion before clause (a) and substituting the following:

Corporation connected to an eligible research institute

(5) For the purposes of this section, a corporation is connected to an eligible research institute at any time during a taxation year of the corporation if, at that time,

. . . . .

(3) Section 43.9 of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 23, is amended by adding the following subsection:

Same, taxation years ending before March 28, 2003

(25.1) Despite subsection (25), if a deduction from tax otherwise payable for a taxation year ending before March 28, 2003 is made in respect of a corporation's Ontario business-research institute tax credit and if the corporation was connected at any time in the taxation year to an eligible research institute under subsection (5), for the purpose of calculating interest under subsection 79 (1) or (4), 82 (4) or 83 (1), the deduction under subsection (1) or (2) from tax otherwise payable for the taxation year and the payment under subsection (24) on account of tax otherwise payable for the taxation year shall be deemed to have been made on the later of March 28, 2003 and the date of the notice of assessment for the taxation year issued by the Minister allowing the deduction from tax otherwise payable.

(4) Subsection 43.9 (26) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 23, is amended by striking out the portion before clause (a) and substituting the following:

When employee connected to corporation

(26) For the purposes of this section, if an eligible research institute and a corporation have entered into an eligible contract, an employee of the eligible research institute is connected to the corporation in a taxation year if, at any time in the taxation year of the corporation,

. . . . .

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

Apprenticeship tax credit

43.13 (1) A corporation that complies with the requirements of this section may deduct from its tax otherwise payable under this Part for the taxation year, after making all deductions claimed under sections 39 to 41, 43 and 43.3 to 43.12 for the taxation year, an amount not exceeding the amount of its apprenticeship tax credit for the taxation year.

Same

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

Amount of tax credit

(3) The amount of a corporation's apprenticeship tax credit for a taxation year is the total of all amounts each of which is in respect of a qualifying apprenticeship in the taxation year and each of which is the total of "A" and "B" where,

"A" is the lesser of,

(a) the product obtained by multiplying the corporation's specified percentage for the taxation year by the corporation's eligible expenditures made during the taxation year in respect of the qualifying apprenticeship, and

(b) the amount calculated using the formula,

$3,000 × C/D

in which,

"C" is the total number of days after March 27, 2003 that the apprentice was employed by the corporation during the taxation year, and

"D" is 365 days or, if the taxation year includes February 29, 366 days, and

"B" is an amount calculated by multiplying the amount of government assistance repaid by the corporation in the taxation year by the corporation's specified percentage for the taxation year in which the government assistance was received, to the extent that the repayment does not exceed the amount of the government assistance in respect of the qualifying apprenticeship that,

(a) has not been repaid in a prior taxation year, and

(b) can reasonably be considered to have reduced the amount of the apprenticeship tax credit that would otherwise have been allowed to the corporation under this section in respect of the qualifying apprenticeship.

Specified percentage

(4) A corporation's specified percentage for a taxation year is the following:

1. Ten per cent if the total of all salaries or wages paid by the corporation in the previous taxation year is $600,000 or more.

2. The percentage determined under subsection (5) if the total of all salaries or wages paid by the corporation in the previous taxation year is greater than $400,000 but less than $600,000.

3. Fifteen per cent in any other case.

Same

(5) The percentage referred to in paragraph 2 of subsection (4) is calculated by adding 10 per cent and the percentage calculated using the formula,

5% × [1 - (E/200,000)]

in which,

"E" is the total amount of salaries and wages paid by the corporation in the previous taxation year that is in excess of $400,000.

Same, amount of salaries and wages

(6) For the purposes of subsections (4) and (5), the amount of salaries and wages paid by a corporation in a previous taxation year shall be deemed to be the amount that would be calculated,

(a) if the rules set out in subsections 87 (1.2) and (1.4) of the Income Tax Act (Canada) applied; and

(b) if no amount is included in respect of salaries and wages paid by any partnership of which the corporation was a member at any time during the taxation year.

Qualifying apprenticeship

(7) For the purposes of this section, a qualifying apprenticeship is an apprenticeship in respect of which all of the following conditions and such other conditions as may be prescribed by the Minister are satisfied:

1. The apprenticeship is in an approved apprenticeship trade in the opinion of the Minister of Training, Colleges and Universities or a person designated by him or her.

2. The corporation, or the corporation acting through a union or a local or joint apprenticeship committee, and the apprentice are participating in an apprenticeship training program,

i. in which the training agreement has been approved under the Apprenticeship and Certification Act, 1998 by the Director of Apprenticeship, or

ii. in which the contract of apprenticeship has been approved under the Trades Qualification and Apprenticeship Act by the Minister of Training, Colleges and Universities or a person designated by him or her.

3. The terms of the apprenticeship require the apprentice to engage in productive work during the apprenticeship, not just to observe the work of others.

4. The apprentice is entitled to receive remuneration for work performed during the apprenticeship and has actually performed the work and assumed the responsibilities required under the terms of the apprenticeship.

Same, associated corporations

(8) For the purposes of this section, consecutive apprenticeships with two or more associated corporations shall be deemed to be one continuous apprenticeship with only one of the corporations, as designated by the corporations.

End of apprenticeship

(9) For the purposes of this section, a qualifying apprenticeship shall be deemed to end on the earlier of the date on which the apprentice is entitled to receive the appropriate certificate under the Apprenticeship and Certification Act, 1998 or the Trades Qualification and Apprenticeship Act or the date, if any, on which the training agreement or contract of apprenticeship is cancelled by the Ministry of Training, Colleges and Universities.

Eligible expenditures

(10) Subject to subsections (12) and (13), the amount paid by a corporation to an apprentice in respect of a qualifying apprenticeship is an eligible expenditure for a taxation year if all of the following conditions are satisfied:

1. The expenditure is required, for the purposes of Part III of Regulation 183 of the Revised Regulations of Ontario, 1990 (General) made under this Act, to be included in the amount of salary or wages paid to employees of a permanent establishment of the corporation in Ontario.

2. Subdivision a of Division B of Part I of the Income Tax Act (Canada) requires the amount paid to the apprentice to be included in the apprentice's income from a source that is an office or employment.

3. The expenditure is in respect of a qualifying apprenticeship and is paid after March 27, 2003.

4. The expenditure relates to services provided by the apprentice to the corporation for a period of 24 consecutive months or it relates to the apprentice's work accumulated over a period that does not exceed 24 months commencing with the first day of employment.

Same

(11) Subject to subsections (12) and (13), such other expenditures as may be prescribed are eligible expenditures of a corporation for a taxation year if the prescribed conditions are satisfied.

Exception

(12) An expenditure made by a corporation in respect of a qualifying apprenticeship is not an eligible expenditure,

(a) if the apprentice serves the apprenticeship with a person other than the corporation; or

(b) to the extent that the amount of the expenditure would not be considered to be reasonable in the circumstances by persons dealing with each other at arm's length.

Total eligible expenditures

(13) For the purposes of this section, the total of eligible expenditures made by a corporation in respect of a qualifying apprenticeship in a taxation year is calculated using the formula,

F - G

in which,

"F" is the sum of the amounts determined under subsections (10) and (11), and

"G" is the amount of all government assistance, if any, that the corporation has received, is entitled to receive or may reasonably be expected to be entitled to receive in respect of the eligible expenditures at the time the corporation's return for the taxation year is required to be delivered under this Act.

Calculations where associated corporations

(14) For the purposes of this section, if a qualifying apprenticeship with two or more associated corporations is deemed under subsection (8) to be a qualifying apprenticeship with one of the corporations,

(a) that corporation shall be deemed to have paid all amounts referred to in subsections (10) and (11) that were paid by the associated corporations and the other associated corporations shall be deemed not to have paid any of those amounts; and

(b) that corporation shall be deemed to have received or to be entitled to receive all government assistance in respect of the apprenticeship that the associated corporations received, are entitled to receive or may reasonably be expected to be entitled to receive, and the other associated corporations shall be deemed not to have received, to be entitled to receive or to reasonably be expected to be entitled to receive, any of that government assistance.

Corporate partner

(15) If a corporation is a member of a partnership and the partnership would qualify in a particular taxation year of the corporation for an apprenticeship tax credit if the partnership were a corporation whose fiscal period was its taxation year, the portion of that apprenticeship tax credit that may reasonably be considered to be the corporation's share of the tax credit may be included in determining the amount of the corporation's apprenticeship tax credit for the corporation's taxation year.

Limited partner

(16) Despite subsection (15), a limited partner's share of a partnership's tax credit referred to in subsection (15) shall be deemed to be nil.

Deemed tax payment

(17) A corporation shall be deemed to pay on account of its tax payable under this Act for a taxation year an amount claimed by the corporation, not exceeding the amount by which "H" exceeds "J" where,

"H" is the corporation's tax credit for the taxation year, and

"J" is the maximum amount, if any, deductible by the corporation under subsections (1) and (2) in determining its tax payable under this Act for the taxation year.

Time of deemed payment

(18) A corporation shall be deemed to make the payment referred to in subsection (17) and the Minister shall be deemed to apply the deemed payment on the day on or before the corporation would be required under clause 78 (2) (b) to pay any balance of tax payable for the taxation year.

Books and records

(19) Unless otherwise directed by the Minister, the apprenticeship contract or training agreement that is registered with the Ministry of Training, Colleges and Universities forms part of the records and books of account required to be kept under section 94 by the corporation providing the qualifying apprenticeship.

Definitions

(20) In this section,

"approved apprenticeship trade" means an apprenticeship trade that is regulated under the Apprenticeship and Certification Act, 1998 or the Trades Qualification and Apprenticeship Act and that, in the opinion of the Minister, is critical to developing skills to support Ontario's economic growth and prosperity; ("métier d'apprentissage approuvé")

"government assistance" means assistance in any form from a government, municipality or other public authority, including a grant, subsidy, forgivable loan, deduction from tax or investment allowance, but does not include,

(a) a tax credit under section 43.3, 43.5, 43.7, 43.8, 43.10, 43.11, 43.12 or this section,

(c) a Canadian film or video production tax credit under section 125.4 of the Income Tax Act (Canada) or an investment tax credit under section 127 of that Act. ("aide gouvernementale")

Regulations

(21) The Minister may make regulations,

(a) prescribing rules for calculating the amount of the apprenticeship tax credit;

(b) prescribing, for the purposes of subsection (7), conditions to be satisfied for an apprenticeship to be a qualifying apprenticeship;

(c) prescribing, for the purposes of subsection (11), expenditures and prescribing the conditions to be satisfied for a prescribed expenditure to be an eligible expenditure.

20. (1) Subsection 44.1 (4) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 24, section 27 and amended by 1996, chapter 29, section 51, 1997, chapter 43, Schedule A, section 24, 1998, chapter 5, section 18 and 1998, chapter 34, section 44, is amended by adding the following paragraph:

12. An apprenticeship tax credit under section 43.13.

(2) Subsection 44.1 (5) of the Act, as re-enacted and amended by the Statutes of Ontario, 1998, chapter 34, section 44, is amended by striking out "sections 43.3 to 43.12" in the portion before paragraph 1 and substituting "sections 43.3 to 43.13".

(3) Paragraph 1 of subsection 44.1 (5) of the Act, as re-enacted and amended by the Statutes of Ontario, 1998, chapter 34, section 44, is amended by striking out "sections 43.3 to 43.12" and substituting "sections 43.3 to 43.13".

21. (1) Clause 62 (1) (c) of the Act, as re-enacted by the Statutes of Ontario, 1998, chapter 34, section 48, is repealed and the following substituted:

Investments

(c) subject to subsection (1.2), the amount that equals that proportion of the paid-up capital remaining after the deduction of the amounts deductible under clauses (a), (b) and (d) to (h) which the total cost of investments made by the corporation in other corporations bears to the total assets of the corporation remaining after the deduction of the amounts deductible under clauses (a), (b) and (d) to (h);

(2) Clause 62 (1) (c) of the Act, as re-enacted by subsection (1), is repealed and the following substituted:

Investments

(c) subject to subsection (1.2), the amount that equals that proportion of the paid-up capital remaining after the deduction of the amounts deductible under clauses (a), (b) and (d) to (i) which the total cost of investments made by the corporation in other corporations bears to the total assets of the corporation remaining after the deduction of the amounts deductible under clauses (a), (b) and (d) to (i);

22. (1) Subsection 66 (1) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 35, is repealed and the following substituted:

Capital tax rate

(1) Except as otherwise provided in this section, the tax payable under this Part by a corporation for a taxation year for which its taxable paid-up capital or its taxable paid-up capital employed in Canada, as the case may be, is determined under Division B or C is the amount calculated using the formula,

A × B

in which,

"A" is the capital tax rate determined under subsection (1.1) for the corporation, and

"B" is the amount of the corporation's taxable paid-up capital or taxable paid-up capital employed in Canada, as the case may be, as determined under Division B or C.

Same

(1.1) The capital tax rate for a corporation for a taxation year is the sum of,

(a) 0.3 per cent multiplied by the ratio of the number of days before January 1, 2004 in the taxation year to the total number of days in the taxation year; and

(b) 0.27 per cent multiplied by the ratio of the number of days after December 31, 2003 in the taxation year to the total number of days in the taxation year.

(2) Subsection 66 (4) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 35, is repealed and the following substituted:

Tax payable by financial institutions

(4) The tax payable under this Part for a taxation year by a financial institution, other than a credit union, is calculated using the formula,

[C × (D + E)] + F

in which,

"C" is the percentage of the taxable paid-up capital of the financial institution that is not deemed, under the prescribed rules, to be used by it in the taxation year in a jurisdiction other than Ontario,

"D" is the amount calculated under subsection (4.1),

"E" is the amount calculated under subsection (4.2) or (4.3), and

"F" is the amount of tax, if any, payable for the taxation year under section 66.1.

Same

(4.1) The variable "D" in subsection (4) is calculated using the formula,

G × H

in which,

"G" is the sum of,

(a) 0.6 per cent multiplied by the ratio of the number of days before January 1, 2004 in the taxation year to the total number of days in the taxation year, and

(b) 0.54 per cent multiplied by the ratio of the number of days after December 31, 2003 in the taxation year to the total number of days in the taxation year, and

"H" is the amount that is the lesser of,

(a) the adjusted taxable paid-up capital of the financial institution for the taxation year, as determined under Division B.1, and

(b) the basic capital amount of the financial institution for the taxation year.

Same

(4.2) If the financial institution is a deposit-taking institution (as defined in subsection 66.1 (14)) in the taxation year or is related in the year to a deposit-taking institution, the variable "E" in subsection (4) is calculated using the formula,

J × K

in which,

"J" is the sum of,

(a) 0.9 per cent multiplied by the ratio of the number of days before January 1, 2004 in the taxation year to the total number of days in the taxation year, and

(b) 0.81 per cent multiplied by the ratio of the number of days after December 31, 2003 in the taxation year to the total number of days in the taxation year, and

"K" is the amount, if any, by which the adjusted taxable paid-up capital of the financial institution for the taxation year exceeds its basic capital amount for the taxation year.

Same

(4.3) If the financial institution is not a deposit-taking institution (as defined in subsection 66.1 (14)) in the taxation year and is not related to a deposit-taking institution, the variable "E" in subsection (4) is calculated using the formula,

K × L

in which,

"K" is the amount, if any, by which the adjusted taxable paid-up capital of the financial institution for the taxation year exceeds its basic capital amount for the taxation year, and

"L" is the sum of,

(a) 0.72 per cent multiplied by the ratio of the number of days before January 1, 2004 in the taxation year to the total number of days in the taxation year, and

(b) 0.648 per cent multiplied by the ratio of the number of days after December 31, 2003 in the taxation year to the total number of days in the taxation year.

23. Subsection 66.1 (3.2) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 36, is repealed and the following substituted:

Eligible tax

(3.2) The amount of the eligible tax for a taxation year of a financial institution, other than a credit union, is the sum of,

(a) the amount of tax, if any, payable by the financial institution under this section for the taxation year; and

(b) the amount calculated for the taxation year using the formula,

(A - E) × (F × G × 0.2)

in which,

"A" is the amount of the adjusted taxable paid-up capital of the financial institution for the taxation year as determined under Division B.1,

"E" is the exempt amount of the financial institution for the taxation year as determined under clauses (1.2) (b) and (c),

"F" is the percentage of the taxable paid-up capital of the financial institution that is not deemed, under the prescribed rules, to be used by it in the taxation year in a jurisdiction other than Ontario, and

"G" is the sum of,

(a) 0.9 per cent multiplied by the ratio of the number of days before January 1, 2004 in the taxation year to the total number of days in the taxation year, and

(b) 0.81 per cent multiplied by the ratio of the number of days after December 31, 2003 in the taxation year to the total number of days in the taxation year.

24. 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 and 2002, chapter 22, section 51, is amended by striking out "January 1, 2004" and substituting "January 1, 2005".

25. (1) Paragraph 2 of subsection 69 (2) of the Act, as re-enacted and amended by the Statutes of Ontario, 2002, chapter 22, section 52, is repealed and the following substituted:

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

A × (B - C)

in which,

"A" is the amount described in paragraph 3,

"B" is the amount described in paragraph 4 or 4.1, and

"C" is the amount described in paragraph 5 or 5.1 or the amount determined in accordance with subsection (2.1).

(2) Paragraph 3 of subsection 69 (2) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 91, is amended by striking out "as defined in subsection 12 (1)".

(3) Paragraph 4 of subsection 69 (2) of the Act, as re-enacted by the Statutes of Ontario, 2002, chapter 22, section 52, is amended by striking out the portion before the formula and substituting the following:

4. For the purposes of paragraph 2, the variable "B" for a taxation year that ends before January 1, 2004 is the amount calculated using the formula,

. . . . .

(4) 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 and 2002, chapter 22, section 52, is amended by adding the following paragraph:

4.1 For the purposes of paragraph 2, the variable "B" for a taxation year that ends after December 31, 2003 is the amount calculated using the formula,

D × E

in which,

"D" 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, and

"E" is the capital tax rate for the corporation for the taxation year, as determined under subsection 66 (1.1).

(5) Paragraph 9 of subsection 69 (2) of the Act, as re-enacted by the Statutes of Ontario, 2002, chapter 22, section 52, 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,

E × Q × R/F

in which,

"E" is the capital tax rate for the corporation for the taxation year, as determined under subsection 66 (1.1),

"F" is the number 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.

(6) The definition of "A" in subsection 69 (2.1) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 52, is amended by striking out "as defined in subsection 12 (1)".

(7) Subsection 69 (2.4) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 52, is repealed and the following substituted:

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 × (E × Z) × T/X

in which,

"A" is the corporation's Ontario allocation factor for the last taxation year ending in the calendar year preceding the calendar year in which the taxation year ends,

"E" is the capital tax rate for the corporation for the taxation year, as determined under subsection 66 (1.1),

"T" is the 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,

"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, and

"Z" is $5 million.

26. The definition of "A" in clause 76 (6) (b) of the Act, as enacted and amended by the Statutes of Ontario, 1998, chapter 34, section 52, is amended by striking out "sections 43.2 to 43.12" and substituting "sections 43.2 to 43.13".

27. (1) Clause 78 (4.3) (a) of the Act, as enacted by the Statutes of Ontario, 2001, chapter 23, section 51, is amended by striking out "sections 43.2 to 43.12" and substituting "sections 43.2 to 43.13".

(2) Clause 78 (5) (b) of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 24, section 29 and amended by 1997, chapter 43, Schedule A, section 45, 1998, chapter 5, section 22 and 1998, chapter 34, section 53, is amended by striking out "sections 43.2 to 43.12" and substituting "sections 43.2 to 43.13".

(3) Clause 78 (5.1) (b) of the Act, as enacted by the Statutes of Ontario, 2001, chapter 23, section 51, is amended by striking out "sections 43.2 to 43.12" and substituting "sections 43.2 to 43.13".

(4) Clause 78 (6) (a) of the Act, as re-enacted and amended by the Statutes of Ontario, 1998, chapter 34, section 53, is amended by striking out "sections 43.2 to 43.12" and substituting "sections 43.2 to 43.13".

28. Clause 80 (1) (b.1) of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 24, section 30 and amended by 1997, chapter 43, Schedule A, section 46, 1998, chapter 5, section 23 and 1998, chapter 34, section 55, is amended by striking out "section 43.2, 43.3, 43.4, 43.5, 43.6, 43.7, 43.8, 43.9, 43.10, 43.11 or 43.12" and substituting "any of sections 43.2 to 43.13".

Commencement

29. (1) Subject to subsections (2), (3) and (4), this Schedule comes into force on the day The Right Choices Act (Budget Measures), 2003 receives Royal Assent.

Same

(2) Subsections 18 (1), (2) and (4) shall be deemed to have come into force on May 7, 1997.

Same

(3) Subsection 21 (1) shall be deemed to have come into force on December 5, 2001.

Same

(4) Subsection 21 (2) shall be deemed to have come into force on December 9, 2002.

SCHEDULE F
AMENDMENTS TO THE
ELECTRICITY ACT, 1998

1. Subsection 92 (9) of the Electricity Act, 1998, as enacted by the Statutes of Ontario, 2000, chapter 25, section 46, is repealed and the following substituted:

Non-application

(9) This section does not apply to any of the following:

1. A hydro-electric generating station, as defined in subsection 92.1 (24), after December 31, 2000.

2. Land that is an electricity generating facility or that is an addition to an existing electricity generating facility, during the period that the land is exempt under section 3.1 of the Assessment Act.

Commencement

2. (1) Subject to subsection (2), this Schedule comes into force on the day The Right Choices Act (Budget Measures), 2003 receives Royal Assent.

Same

(2) Section 1 shall be deemed to have come into force on December 9, 2002.

SCHEDULE G
AMENDMENTS TO THE
INCOME TAX ACT

1. Subsection 3 (1) of the Income Tax Act, as re-enacted by the Statutes of Ontario, 1992, chapter 25, section 1 and amended by 1993, chapter 29, section 3, 1996, chapter 1, Schedule C, section 3, 1996, chapter 18, section 1, 1997, chapter 10, section 1, 1998, chapter 5, section 1, 1999, chapter 9, section 116, 2000, chapter 10, section 12, 2000, chapter 42, section 49, 2001, chapter 8, section 35, 2001, chapter 23, section 127 and 2002, chapter 22, section 104, is repealed and the following substituted:

Surtax

(1) Every individual shall pay an additional tax to be determined as follows in respect of the individual:

1. For the 2000 taxation year, the additional tax is the aggregate of,

i. 20 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $3,561, and

ii. 36 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $4,468.

2. For the 2001 taxation year, the additional tax is the aggregate of,

i. 20 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $3,560, and

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

3. For the 2002 taxation year, the additional tax is the aggregate of,

i. 20 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $3,685, and

ii. 36 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $4,648.

4. For the 2003 taxation year, the additional tax is the aggregate of,

i. 20 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $3,747, and

ii. 36 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $4,727.

5. For the 2004 taxation year, the additional tax is 56 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $4,727.

6. For the 2005 taxation year and each subsequent taxation year, the additional tax is 56 per cent of the amount, if any, by which the gross tax amount of the individual for the taxation year exceeds $5,240.

2. (1) Paragraph 4 of subsection 4 (3.1) of the Act, as re-enacted by the Statutes of Ontario, 2000, chapter 42, section 50, is repealed and the following substituted:

4. A credit for in-home care of a person,

i. for a taxation year ending before January 1, 2003, if the individual is entitled to include an amount in respect of the person under paragraph 118 (1) (c.1) of the Federal Act in the calculation of his or her personal credit for the year under subsection 118 (1) of that Act, and

ii. for a taxation year ending after December 31, 2002, if the criteria set out in subsection 4.0.1 (5.1) are satisfied.

(2) Paragraph 5 of subsection 4 (3.1) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 50, is repealed and the following substituted:

5. A credit for a dependant,

i. for a taxation year ending before January 1, 2003, if the individual is entitled to include an amount in respect of the dependant under paragraph 118 (1) (d) of the Federal Act in the calculation of his or her personal credit for the year under subsection 118 (1) of that Act, and

ii. for a taxation year ending after December 31, 2002, if the criteria set out in subsection 4.0.1 (6.1) are satisfied.

(3) Subsection 4 (3.2) of the Act, as re-enacted by the Statutes of Ontario, 2000, chapter 42, section 50 and amended by 2001, chapter 23, section 128, is amended by adding the following paragraphs:

13. For a taxation year ending after December 31, 2002, an individual is not permitted to deduct a credit under paragraph 4 of subsection (3.1) for in-home care of a person if the individual's spouse or common-law partner deducts a credit under that paragraph for in-home care of the same person.

14. For a taxation year ending after December 31, 2002, an individual is not permitted to deduct a credit under paragraph 5 of subsection (3.1) for a dependant if the individual's spouse or common-law partner deducts a credit under that paragraph in respect of the same dependant.

3. (1) Subsections 4.0.1 (5) and (6) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 8, section 37, are repealed and the following substituted:

Credit, in-home care

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

A × (ZZ - D)

in which,

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

"D" is the greater of the person's income for the year and,

(a) $11,661 for a taxation year ending after December 31, 1999 and before January 1, 2001,

(b) $11,976 for a taxation year ending after December 31, 2000 and before January 1, 2002,

(d) $13,050 for a taxation year ending after December 31, 2002, and

"ZZ" is,

(a) $14,047 for a taxation year ending after December 31, 1999 and before January 1, 2001,

(b) $15,476 for a taxation year ending after December 31, 2000 and before January 1, 2002,

(d) $19,687 for a taxation year ending after December 31, 2002.

Eligibility for in-home care credit,
2003 and subsequent taxation years

(5.1) An individual is eligible for a credit for in-home care of a person for a taxation year ending after December 31, 2002 if all of the following criteria are satisfied:

1. At any time in the year (the "particular time"), the individual maintains, either alone or jointly with one or more persons, a self-contained domestic establishment which is the ordinary place of residence of the individual and of the person in respect of whom the credit is being claimed.

2. The person is at least 18 years of age before the particular time and is,

i. the spouse or common-law partner of the individual,

ii. the child or grandchild of the individual or of the individual's spouse or common-law partner,

iii. the parent or grandparent of the individual or of the individual's spouse or common-law partner, or

iv. the brother, sister, aunt, uncle, nephew or niece of the individual or of the individual's spouse or common-law partner.

3. The person satisfies the following criteria:

i. If the person is the spouse or common-law partner of the individual, the person is dependent on the individual because of the person's mental or physical infirmity.

ii. If the person is the child or grandchild of the individual or of the individual's spouse or common-law partner, the person is dependent on the individual because of the person's mental or physical infirmity.

iii. If the person is the parent or grandparent of the individual or of the individual's spouse or common-law partner, the person is resident in Canada and the person is at least 65 years of age or is dependent on the individual because of the person's mental or physical infirmity.

iv. If the person is described in subparagraph 2 iv, the person is resident in Canada and is dependent on the individual because of the person's mental or physical infirmity.

Dependant credit

(6) The amount of an individual's credit for a taxation year in respect of a dependant is the amount calculated using the formula,

A × (YY - E)

in which,

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

"E" is the greater of the dependant's income for the year and,

(a) $4,845 for a taxation year ending after December 31, 1999 and before January 1, 2001,

(b) $4,976 for a taxation year ending after December 31, 2000 and before January 1, 2002,

(d) $13,050 for a taxation year ending after December 31, 2002, and

"YY" is,

(a) $7,231 for a taxation year ending after December 31, 1999 and before January 1, 2001,

(b) $8,476 for a taxation year ending after December 31, 2000 and before January 1, 2002,

(d) $19,687 for a taxation year ending after December 31, 2002.

Eligibility for dependant credit,
2003 and subsequent taxation years

(6.1) An individual is eligible for a credit for a dependant for a taxation year ending after December 31, 2002 if all of the following criteria are satisfied at any time in the year:

1. The person in respect of whom the individual is claiming the credit is dependent on the individual for support because of a mental or physical infirmity.

2. The person is at least 18 years of age before the end of the year and is,

i. the spouse or common-law partner of the individual,

ii. the child or grandchild of the individual or of the individual's spouse or common-law partner,

iii. the parent or grandparent of the individual or of the individual's spouse or common-law partner, or

iv. the brother, sister, aunt, uncle, nephew or niece of the individual or of the individual's spouse or common-law partner.

3. If the person is described in subparagraph 2 iii or iv, the person is resident in Canada.

(2) Subsection 4.0.1 (11.1) of the Act, as enacted by the Statutes of Ontario, 2001, chapter 8, section 37, is repealed and the following substituted:

Credit after 2000, impairment

(11.1) The amount of an individual's credit for a taxation year ending after December 31, 2000 in respect of a mental or physical impairment is the amount calculated using the formula,

A × (UU + XX)

in which,

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

"UU" is,

(a) $6,000 for a taxation year ending after December 31, 2000 and before January 1, 2002,

(b) $6,210 for a taxation year ending after December 31, 2001 and before January 1, 2003, and

"XX" is,

(a) for an individual who has not reached 18 years of age before the end of the taxation year,

(i) for a taxation year ending after December 31, 2000 and before January 1, 2002, the amount, if any, by which $3,500 exceeds the amount, if any, by which the total of all amounts each of which is an amount paid in the year for the care or supervision of the individual and is included in computing a deduction for a taxation year under section 63, 64 or 118.2 of the Federal Act exceeds $2,050,

(ii) for a taxation year ending after December 31, 2001 and before January 1, 2003, the amount, if any, by which $3,623 exceeds the amount, if any, by which the total of all amounts each of which is an amount paid in the year for the care or supervision of the individual and is included in computing a deduction for a taxation year under section 63, 64 or 118.2 of the Federal Act exceeds $2,122, and

(iii) for a taxation year ending after December 31, 2002, the amount, if any, by which $6,637 exceeds the amount, if any, by which the total of all amounts each of which is an amount paid in the year for the care or supervision of the individual and is included in computing a deduction for a taxation year under section 63, 64 or 118.2 of the Federal Act exceeds $2,158, and

(b) in any other case, zero.

4. (1) Section 4.0.2 of the Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 52 and amended by 2001, chapter 8, section 38, is amended by adding the following subsection:

Exception, 2002 and 2003 taxation years

(1.2) Despite subsection (1), the dollar amounts referred to in subsections 4.0.1 (5), (6) and (11.1), as they apply for a taxation year ending after December 31, 2001 and before January 1, 2004, are not to be adjusted using the formula in subsection (3).

(2) Subsection 4.0.2 (2) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 8, section 38, is repealed and the following substituted:

Indexing, surtax

(2) The dollar amount in paragraph 5 of subsection 3 (1) is adjusted to the amount calculated using the formula set out in subsection (3) for a taxation year ending after December 31, 2003 and before January 1, 2005.

Same

(2.1) For each taxation year ending after December 31, 2005, the dollar amount in paragraph 6 of subsection 3 (1) is adjusted to the amount calculated using the formula set out in subsection (3).

5. The definition of the variable "D" in subsection 7 (2.4) of the Act, as re-enacted by the Statutes of Ontario, 2002, chapter 22, section 107, is repealed and the following substituted:

"D" is,

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

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

(d) for the 2005 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,

6. (1) 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, 2001, chapter 23, section 131 and 2002, chapter 22, section 108, is amended by adding the following subsection:

Apprenticeship tax credit

(16.1) An individual who is an eligible employer under section 8.4.5 may deduct from the amount of tax otherwise payable under this Act for a taxation year ending after March 27, 2003 an amount not exceeding the amount of his or her apprenticeship tax credit determined under section 8.4.5 for the taxation year.

(2) Paragraph 2 of subsection 8 (17) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 23, section 131 and amended by 2002, chapter 22, section 108, is amended by striking out "and (16)" and substituting "(16) and (16.1)".

(3) Paragraph 3 of subsection 8 (17) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 23, section 131 and amended by 2002, chapter 22, section 108, is amended by striking out "and (16)" and substituting "(16) and (16.1)".

(4) Paragraph 7 of subsection 8 (17) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 23, section 131 and amended by 2002, chapter 22, section 108, is amended by striking out "and (16)" and substituting "(16) and (16.1)".

(5) Paragraph 8 of subsection 8 (17) of the Act, as re-enacted by the Statutes of Ontario, 2001, chapter 23, section 131 and amended by 2002, chapter 22, section 108, is amended by striking out "and (16)" and substituting "(16) and (16.1)".

7. Subsection 8.2 (4) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 43, Schedule B, section 6, is amended by adding the following paragraph:

7. Prescribing an alternative method for calculating the amount of the co-operative education tax credit of an eligible employer for a taxation year relating to a qualifying work placement for which the employer is entitled to a tax credit under subsection 8 (15) for the period before March 28, 2003 and for which the employer is entitled to an apprenticeship tax credit under subsection 8 (16.1) for the period after March 27, 2003.

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

Apprenticeship tax credit

8.4.5 (1) The amount of an eligible employer's apprenticeship tax credit for a taxation year is the total of all amounts each of which is calculated under subsection (3) in respect of the employer's eligible expenditures under this section for the taxation year for each apprentice employed in a qualifying apprenticeship.

Eligible employer

(2) For the purposes of this section, an individual is an eligible employer 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.

Calculation of credit

(3) The amount referred to in subsection (1) in respect of an eligible employer's eligible expenditures for a taxation year for an apprentice employed in a qualifying apprenticeship is the total of "A" and "B" where,

"A" is the lesser of,

(a) the product obtained by multiplying the employer's specified percentage for the taxation year by the employer's eligible expenditures made during the taxation year for the apprentice employed in the qualifying apprenticeship, and

(b) the amount calculated using the formula,

$3,000 × C/D

in which,

"C" is the total number of days after March 27, 2003 that the apprentice was employed by the employer during the taxation year, and

"D" is 365 days or, if the taxation year includes February 29, 366 days, and

"B" is the amount calculated by multiplying the amount of government assistance repaid by the employer in the taxation year by the employer's specified percentage for the taxation year in which the government assistance was received, to the extent that the repayment does not exceed the amount of the government assistance previously received by the employer in respect of the qualifying apprenticeship that,

(a) has not been repaid in a prior taxation year, and

(b) can reasonably be considered to have reduced the amount of the apprenticeship tax credit that would otherwise have been allowed to the employer under subsection 8 (16.1) in respect of the qualifying apprenticeship.

Specified percentage

(4) An employer's specified percentage for a taxation year is the following:

1. Ten per cent if the total of all salaries or wages paid by the employer in the previous taxation year is $600,000 or more.

2. The percentage determined under subsection (5) if the total of all salaries or wages paid by the employer in the previous taxation year is greater than $400,000 but less than $600,000.

3. Fifteen per cent in any other case.

Same

(5) The percentage referred to in paragraph 2 of subsection (4) is calculated by adding 10 per cent and the percentage calculated using the formula,

5% × [1 - (E/200,000)]

in which,

"E" is the total amount of salaries and wages paid by the employer in the previous taxation year that is in excess of $400,000.

Qualifying apprenticeship

(6) For the purposes of this section, a qualifying apprenticeship is an apprenticeship that would be a qualifying apprenticeship for the purposes of section 43.13 of the Corporations Tax Act if the employer of the apprentice were a corporation rather than an individual.

End of apprenticeship

(7) For the purposes of this section, a qualifying apprenticeship shall be deemed to end on the earlier of the date on which the apprentice is entitled to receive the appropriate certificate under the Apprenticeship and Certification Act, 1998 or the Trades Qualification and Apprenticeship Act or the date, if any, on which the training agreement or contract of apprenticeship is cancelled by the Ministry of Training, Colleges and Universities.

Eligible expenditures

(8) Subject to subsections (10) and (11), the amount paid by an employer to an apprentice employed in a qualifying apprenticeship is an eligible expenditure for a taxation year if all of the following conditions are satisfied:

1. The expenditure is on account of salary or wages paid to an employee who reports for work at a permanent establishment of the employer in Ontario.

3. The expenditure is in respect of a qualifying apprenticeship and is paid after March 27, 2003.

4. The expenditure relates to services provided by the apprentice to the employer for a period of 24 consecutive months or it relates to the apprentice's work accumulated over a period that does not exceed 24 months commencing with the first day of employment.

Same

(9) Subject to subsections (10) and (11), such other expenditures as may be prescribed are eligible expenditures of an employer for a taxation year if the prescribed conditions are satisfied.

Exception

(10) An expenditure made by an employer in respect of a qualifying apprenticeship is not a eligible expenditure,

(a) if the apprentice serves the apprenticeship with a person other than the employer; or

(b) to the extent that the amount of the expenditure would not be considered to be reasonable in the circumstances by persons dealing with each other at arm's length.

Total eligible expenditures

(11) The total of eligible expenditures made by an employer in respect of a qualifying apprenticeship in a taxation year is calculated using the formula,

F - G

in which,

"F" is the sum of the amounts determined under subsections (8) and (9), and

"G" is the amount of all government assistance, if any, that the employer has received, is entitled to receive or may reasonably be expected to be entitled to receive in respect of the eligible expenditures at the time the employer's return for the taxation year is required to be delivered under this Act.

Partnerships

(12) If an eligible employer 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, an expenditure that would be included in computing the apprenticeship tax credit of the employer if the expenditure had been incurred by the employer, the eligible employer who is a member of the partnership may include, in determining the amount of his or her apprenticeship tax credit, that portion of the expenditure that may reasonably be attributed to him or her.

Limited partner

(13) Subsection (12) does not apply if the eligible employer is a limited partner in the partnership.

Definition

(14) In this section,

"government assistance" means assistance from a government, municipality or other public authority in any form, including a grant, subsidy, forgivable loan, deduction from tax or investment allowance, but does not include an apprenticeship tax credit under subsection 8 (16.1) or any other amount that may be prescribed.

Regulations

(15) The Provincial Minister may make regulations,

(a) prescribing rules for calculating the amount of the apprenticeship tax credit;

(b) prescribing, for the purposes of subsection (9), expenditures and prescribing the conditions to be satisfied for an expenditure to be an eligible expenditure;

9. The definition of the variable "B" in subsection 8.5 (5) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 34, section 74, is repealed and the following substituted:

"B" is 8 per cent of the amount, if any, by which the individual's adjusted income for the base taxation year in relation to the month exceeds $20,750, and

Commencement

10. (1) Subject to subsections (2), (3) and (4), this Schedule comes into force on the day The Right Choices Act (Budget Measures), 2003 receives Royal Assent.

Same

(2) Subsection 4 (1) shall be deemed to have come into force on January 1, 2002.

Same

(3) Sections 1, 2 and 3 and subsection 4 (2) shall be deemed to have come into force on January 1, 2003.

Same

(4) Section 9 comes into force on July 1, 2003.

SCHEDULE H
AMENDMENTS TO THE
LIMITATIONS ACT, 2002

1. The Schedule to the Limitations Act, 2002, as amended by the Statutes of Ontario, 2002, chapter 24, Schedule B, section 50, is amended by striking out,


Securities Act	section 129.1, subsection 136 (5) and section 138
and substituting the following:

Securities Act

section 129.1, subsection 136 (5) and sections 138 and 138.14

Commencement

2. This Schedule comes into force on the day The Right Choices Act (Budget Measures), 2003 receives Royal Assent.

SCHEDULE I
AMENDMENTS TO THE
MUNICIPAL ACT, 2001

1. (1) Subsection 308.1 (2) of the Municipal Act, 2001, as enacted by the Statutes of Ontario, 2002, chapter 22, section 153, is repealed and the following substituted:

Managed forests property class

(2) The tax ratio for the managed forests 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.

(2) Subsections 308.1 (4), (5) and (6) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 153, are repealed and the following substituted:

Change of tax ratio, single-tier municipality

(4) A single-tier municipality that intends to apply a tax ratio of less than 0.25 for the managed forests property class or the farm property class, as the case may be, 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 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 for the managed forests property class or the farm property class, as the case may be, 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 property class for that year 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 subsections (4) and (5) for a tax year and may specify different dates with respect to the managed forests property class and the farm property class and different dates for the purposes of subsections (4) and (5).

Same

(7) A regulation made under subsection (6) may be made before, on or after the date that would otherwise apply in the circumstances.

2. Section 474 of the Act is amended by striking out "Parts XXII.1 and XXII.2" and substituting "Parts XXII.1, XXII.2 and XXII.3".

Commencement

3. (1) Subject to subsection (2), this Schedule comes into force on the day The Right Choices Act (Budget Measures), 2003 receives Royal Assent.

Same

(2) Section 2 shall be deemed to have come into force on January 1, 2003.

SCHEDULE J
AMENDMENTS TO THE
RETAIL SALES TAX ACT

1. Subsection 18 (3) of the Retail Sales Tax Act, as amended by the Statutes of Ontario, 1996, chapter 29, section 30 and 2001, chapter 23, section 194, is repealed and the following substituted:

Assessment, four-year limitation

(3) The Minister may assess or reassess any tax payable under this Act by a purchaser, other than a manufacturing contractor, or by a registrant within four years from the day such tax became payable.

Same, manufacturing contractor

(3.0.1) The Minister may assess or reassess any tax payable by a manufacturing contractor under this Act within four years from the end of the manufacturing contractor's fiscal year during which the tax became payable.

Exception, misrepresentation or fraud

(3.0.2) Despite subsections (3) and (3.0.1), the Minister may assess or reassess a purchaser or registrant at any time if the purchaser or registrant has made any misrepresentation that is attributable to neglect, carelessness or wilful default, or has committed any fraud in making a return or in supplying any information under this Act or in omitting to disclose any information.

Exception, waiver of limitation

(3.0.3) Despite subsections (3) and (3.0.1), the Minister may assess or reassess a purchaser or registrant at any time if the purchaser or registrant has filed with the Minister a waiver in a form approved by the Minister before the expiry of the time provided in subsection (3) or (3.0.1), as the case may be.

Revocation of waiver

(3.0.4) If a purchaser or registrant files a waiver under subsection (3.0.3), the purchaser or registrant may file a notice of revocation of the waiver in a form approved by the Minister.

Effect of revocation

(3.0.5) If a purchaser or registrant files a notice of revocation of the waiver under subsection (3.0.4), the Minister shall not issue an assessment or reassessment under subsection (3) or (3.0.1), as the case may be, in reliance on the waiver more than one year after the date on which the notice of revocation is filed.

2. Subsection 20 (5) of the Act is repealed and the following substituted:

Restriction, four-year limitation

(5) No penalty imposed under subsection (3) shall be imposed with respect to tax that should have been collected more than four years immediately preceding the day of the assessment under subsection (3).

Exception, misrepresentation or fraud

(5.1) The restriction in subsection (5) does not apply if the Minister establishes that the vendor has made any misrepresentation that is attributable to neglect, carelessness or wilful default, or has committed any fraud in making a return or in supplying any information under this Act or in omitting to disclose any information.

Exception, waiver of limitation

(5.2) The restriction in subsection (5) does not apply if the vendor has filed with the Minister a waiver in a form approved by the Minister within four years from the date on which the tax should have been collected.

Revocation of waiver

(5.3) If a vendor files a waiver under subsection (5.2), the vendor may file a notice of revocation of the waiver in a form approved by the Minister.

Effect of revocation

(5.4) If a vendor files a notice of revocation of waiver under subsection (5.3), the Minister shall not assess a penalty under subsection (3) in reliance on the waiver more than one year after the date on which the notice of revocation is filed.

3. (1) Subsection 48 (3) of the Act, as amended by the Statutes of Ontario, 1993, chapter 12, section 14, 1994, chapter 13, section 25, 1996, chapter 18, section 18, 1997, chapter 10, section 34, 1997, chapter 19, section 22, 1997, chapter 43, Schedule D, section 14, 1998, chapter 5, section 47, 1999, chapter 9, section 189, 2000, chapter 42, section 95, 2001, chapter 8, section 232, 2001, chapter 23, section 207 and 2002, chapter 23, section 5, is amended by adding the following clause:

(c) providing for the use of purchase exemption certificates and other documents where purchasers or classes of purchasers are exempt from tax under this Act;

(2) Clause 48 (3) (g) of the Act, as amended by the Statutes of Ontario, 1993, chapter 12, section 14, clause 48 (3) (h) of the Act and clause 48 (3) (i) of the Act, as enacted by 2001, chapter 8, section 232, are repealed and the following substituted:

(g) subject to subsection (6), providing for the rebate of the tax imposed by section 2 or 4.2 paid on the purchase of a vehicle that is required to be licensed under the Highway Traffic Act, where the energy to operate the vehicle is either,

(i) exclusively electrical energy or energy derived from the internal combustion of propane, natural gas, ethanol, methanol or manufactured gas, or

(ii) energy described in subclause (i), where the vehicle can also operate exclusively on energy derived from a fuel described under the Fuel Tax Act or the Gasoline Tax Act,

but not any vehicle where the energy to operate the vehicle is a mix of a form of energy described in subclause (i) and energy derived from a fuel described under the Fuel Tax Act or the Gasoline Tax Act;

(g.1) subject to subsection (6), providing for the rebate of the tax imposed by section 2 or 4.2 paid on the purchase of a vehicle that is powered by a gasoline or diesel engine and for which a permit is required under the Highway Traffic Act, and any tangible personal property sold as a conversion kit, including the labour provided to install the conversion kit, if the vehicle is converted to permit it to operate in a manner described in subclause (g) (i) or (ii) within 180 days of the date of sale of the vehicle;

(h) subject to subsection (6), providing for the rebate of any tax paid by a purchaser under section 4, where the purchaser is entitled to a rebate referred to in clause (g.1) in connection with the conversion of the vehicle to permit it to operate in the manner described in subclause (g) (i);

(h.1) subject to subsection (6), providing for the rebate of the tax imposed by section 2 paid on the purchase of tangible personal property sold as a conversion kit to be used to convert any vehicle powered by a gasoline or diesel engine into a vehicle that operates in the manner described in subclause (g) (i) or (ii), including the labour to install the kit, where the vehicle is not so converted within 180 days of the date of the sale of the vehicle;

(i) subject to subsection (7), providing for the rebate of the tax imposed by section 2 or 4.2 that has been paid on a hybrid electric vehicle, as defined by the Minister;

(3) Subsection 48 (3) of the Act, as amended by the Statutes of Ontario, 1993, chapter 12, section 14, 1994, chapter 13, section 25, 1996, chapter 18, section 18, 1997, chapter 10, section 34, 1997, chapter 19, section 22, 1997, chapter 43, Schedule D, section 14, 1998, chapter 5, section 47, 1999, chapter 9, section 189, 2000, chapter 42, section 95, 2001, chapter 8, section 232, 2001, chapter 23, section 207 and 2002, chapter 23, section 5, is amended by adding the following clause:

(s) providing for a rebate of all or part of the tax paid in respect of a wind energy system, a micro hydro-electric energy system or a geothermal energy system, as those terms are defined by the Minister, that is purchased and incorporated into residential premises after March 27, 2003 and before November 26, 2007, and prescribing the terms and conditions under which the rebate may be made including,

(i) the person to whom the rebate is payable,

(ii) the manner of determining the amount of the rebate, and

(iii) the class or classes of residential premises that qualify for the purposes of the rebate.

(4) Section 48 of the Act, as amended by the Statutes of Ontario, 1993, chapter 12, section 14, 1994, chapter 13, section 25, 1996, chapter 18, section 18, 1997, chapter 10, section 34, 1997, chapter 19, section 22, 1997, chapter 43, Schedule D, section 14, 1998, chapter 5, section 47, 1999, chapter 9, section 189, 2000, chapter 42, section 95, 2001, chapter 8, section 232, 2001, chapter 23, section 207 and 2002, chapter 23, section 5, is amended by adding the following subsections:

Rebate on vehicles

(5) A regulation under clause (3) (g), (g.1), (h), (h.1) or (i) may prescribe the basis upon which the applicable rebate is calculated and the conditions under which the rebate is made.

Maximum rebate on certain types of vehicle

(6) The maximum amount of the rebate that may be given under clause (3) (g), (g.1), (h) or (h.1) in respect of a vehicle other than a bus, as defined by the Minister, is,

(a) $750 for a vehicle that uses propane or is converted to use propane;

(b) $1,000 for a vehicle purchased by or delivered to the purchaser before March 28, 2003, other than a vehicle that uses propane or is converted to use propane; and

(c) $2,000 for a vehicle purchased by or delivered to the purchaser after March 27, 2003, other than a vehicle that uses propane or is converted to use propane.

Maximum rebate on
hybrid electric vehicles

(7) The maximum amount of the rebate that may be given under clause (3) (i) is $1,000 for a hybrid electric vehicle delivered to the purchaser after May 9, 2001 and before March 28, 2003 and $2,000 for a hybrid electric vehicle delivered to the purchaser after March 27, 2003.

Commencement

4. This Schedule comes into force on the day The Right Choices Act (Budget Measures), 2003 receives Royal Assent.

SCHEDULE K
AMENDMENTS TO THE
SECURITIES ACT

1. (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, 2001, chapter 23, section 209 and 2002, chapter 22, section 177, is amended by adding the following definition:

"forward-looking information" means disclosure regarding possible events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action and includes future oriented financial information with respect to prospective results of operations, financial position or cash flows that is presented either as a forecast or a projection; ("information prospective")

(2) The definition of "mutual fund" in subsection 1 (1) of the Act, as re-enacted by the Statutes of Ontario, 2002, chapter 22, section 177, is repealed and the following substituted:

"mutual fund" means an issuer whose primary purpose is to invest money provided by its security holders and 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; ("fonds mutuel")

(3) Subsection 1 (1) of the 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, 2001, chapter 23, section 209 and 2002, chapter 22, section 177, is amended by adding the following definition:

"non-redeemable investment fund" means an issuer,

(a) whose primary purpose is to invest money provided by its security holders,

(b) that does not invest,

(i) for the purpose of exercising or seeking to exercise control of an issuer, other than an issuer that is a mutual fund or a non-redeemable investment fund, or

(ii) for the purpose of being actively involved in the management of any issuer in which it invests, other than an issuer that is a mutual fund or a non-redeemable investment fund, and

(4) Subsection 1 (1.1) of the Act, as re-enacted by the Statutes of Ontario, 2002, chapter 22, section 177, is amended by striking out ""non-redeemable investment fund"".

2. (1) Clause 3.4 (2) (b) of the Act, as re-enacted by the Statutes of Ontario, 2002, chapter 22, section 178, is repealed and the following substituted:

(b) that is designated under the terms of the order or settlement for allocation to or for the benefit of third parties.

(2) Section 3.4 of the Act, as enacted by the Statutes of Ontario, 1997, chapter 10, section 37 and amended by 2002, chapter 22, section 178, is amended by adding the following subsection:

Same

(2.1) The Minister may establish guidelines respecting the allocation of money received by the Commission pursuant to an order described in subsection (2) or money received by the Commission as a payment to settle enforcement proceedings commenced by the Commission.

3. Clause 75 (3) (a) of the Act, as re-enacted by the Statutes of Ontario, 2002, chapter 22, section 180, is amended by striking out "subsection (2)" and substituting "subsections (1) and (2)".

4. (1) Clause 126.2 (b) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 182, is repealed and the following substituted:

(b) would reasonably be expected to have a significant effect on the market price or value of a security.

(2) Section 126.2 of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 182, is amended by adding the following subsection:

Same

(2) A breach of subsection (1) does not give rise to a statutory right of action for damages otherwise than under Part XXIII or XXIII.1.

5. Subsection 127 (3.1) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 183, is repealed and the following substituted:

Exception

(3.1) A person or company is not entitled to participate in a proceeding in which an order may be made under paragraph 9 or 10 of subsection (1) solely on the basis that the person or company may be entitled to receive any amount paid under the order.

6. Subsection 130 (1) of the Act is amended by striking out the portion before clause (a) and substituting the following:

Liability for misrepresentation
in prospectus

(1) Where a prospectus, together with any amendment to the prospectus, contains a misrepresentation, a purchaser who purchases a security offered by the prospectus during the period of distribution or during distribution to the public has, without regard to whether the purchaser relied on the misrepresentation, a right of action for damages against,

. . . . .

7. Subsection 130.1 (1) of the Act, as enacted by the Statutes of Ontario, 1999, chapter 9, section 218, is repealed and the following substituted:

Liability for misrepresentation
in offering memorandum

(1) Where an offering memorandum contains a misrepresentation, a purchaser who purchases a security offered by the offering memorandum during the period of distribution has, without regard to whether the purchaser relied on the misrepresentation, the following rights:

1. The purchaser has a right of action for damages against the issuer and a selling security holder on whose behalf the distribution is made.

2. If the purchaser purchased the security from a person or company referred to in paragraph 1, the purchaser may elect to exercise a right of rescission against the person or company. If the purchaser exercises this right, the purchaser ceases to have a right of action for damages against the person or company.

8. (1) Subsection 131 (1) of the Act is amended by striking out the portion before clause (a) and substituting the following:

Liability for misrepresentation
in circular

(1) Where a take-over bid circular sent to the security holders of an offeree issuer as required by Part XX, or any notice of change or variation in respect of the circular, contains a misrepresentation, a security holder may, without regard to whether the security holder relied on the misrepresentation, elect to exercise a right of action for rescission or damages against the offeror or a right of action for damages against,

. . . . .

(2) Subsection 131 (2) of the Act is repealed and the following substituted:

Same

(2) Where a directors' circular or a director's or officer's circular delivered to the security holders of an offeree issuer as required by Part XX, or any notice of change or variation in respect of the circular, contains a misrepresentation, a security holder has, without regard to whether the security holder relied on the misrepresentation, a right of action for damages against every director or officer who signed the circular or notice that contained the misrepresentation.

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

Defence to liability
for misrepresentation

132.1 (1) A person or company is not liable in an action under section 130, 130.1 or 131 for a misrepresentation in forward-looking information if the person or company proves all of the following things:

1. The document containing the forward-looking information contained, proximate to that 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 conclusion, forecast or projection in the forward-looking information, and

ii. a statement of the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection set out in the forward-looking information.

2. The person or company had a reasonable basis for drawing the conclusions or making the forecasts and projections set out in the forward-looking information.

Exception

(2) Subsection (1) does not relieve a person or company of liability respecting forward-looking information in a financial statement or forward-looking information in a document released in connection with an initial public offering.

10. (1) The definition of "core document" in section 138.1 of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is repealed and the following substituted:

"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 who is not also an officer of the responsible issuer, other than an officer of an investment fund manager,

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 and interim financial statements of the responsible issuer,

(b) where used in relation to,

(i) a responsible issuer or 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

(2) The definition of "forward-looking information" in section 138.1 of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is repealed.

(3) Clause (g) of the definition of "liability limit" in section 138.1 of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is repealed and the following substituted:

(g) in the case of each person who made a public oral statement, other than an individual referred to in clause (d), (e) or (f), the greater of,

(i) $25,000, and

(ii) 50 per cent of the aggregate of the person's compensation from the responsible issuer and its affiliates; ("limite de responsabilité")

(4) The definition of "responsible issuer" in section 138.1 of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is repealed and the following substituted:

"responsible issuer" means,

(a) a reporting issuer, or

(b) any other issuer with a real and substantial connection to Ontario, any securities of which are publicly traded; ("émetteur responsable")

11. Clauses 138.2 (a) and (b) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, are repealed and the following substituted:

(a) the purchase of a security offered by a prospectus during the period of distribution;

(b) the acquisition of an issuer's security pursuant to a distribution that is exempt from section 53 or 62, except as may be prescribed by regulation;

12. (1) The English version of subsection 138.3 (1) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a person or company who acquires or disposes of an issuer's security" in the portion before clause (a) and substituting "a person or company who acquires or disposes of the issuer's security".

(2) The English version of subclause 138.3 (1) (d) (i) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is repealed and the following substituted:

(i) the responsible issuer or any person or company acting on behalf of the responsible issuer to release the document, or

(3) The English version of subsection 138.3 (2) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a person or company who acquires or disposes of an issuer's security" in the portion before clause (a) and substituting "a person or company who acquires or disposes of the issuer's security".

(4) Subsection 138.3 (3) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out the portion before clause (a) and substituting the following:

Influential persons

(3) Where an influential person or a person or company with actual, implied or apparent authority to act or speak 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 the 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,

. . . . .

(5) The English version of subsection 138.3 (4) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a person or company who acquires or disposes of an issuer's security" in the portion before clause (a) and substituting "a person or company who acquires or disposes of the issuer's security".

(6) Subsection 138.3 (5) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" and substituting "an action".

(7) Subsection 138.3 (6) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" in the portion before clause (a) and substituting "an action".

(8) Subsection 138.3 (7) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is repealed and the following substituted:

No implied or actual authority

(7) In an action 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 other person became, or should reasonably have become, aware of the misrepresentation.

13. (1) Subsection 138.4 (1) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" in the portion before clause (a) and substituting "an action".

(2) Subsection 138.4 (2) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" and substituting "an action".

(3) Subsection 138.4 (3) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" in the portion before clause (a) and substituting "an action".

(4) Subsection 138.4 (4) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" in the portion before clause (a) and substituting "an action".

(5) Subsection 138.4 (5) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" in the portion before clause (a) and substituting "an action".

(6) Subsection 138.4 (6) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" in the portion before clause (a) and substituting "an action".

(7) Subsection 138.4 (7) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "the courts" in the portion before clause (a) and substituting "the court".

(8) The English version of clause 138.4 (7) (e) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is repealed and the following substituted:

(e) the existence, if any, and the nature of any system designed to ensure that the responsible issuer meets its continuous disclosure obligations;

(9) Subsection 138.4 (8) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" in the portion before clause (a) and substituting "an action".

(10) Subsections 138.4 (9) and (10) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, are repealed and the following substituted:

Forward-looking information

(9) A person or company is not liable in an action under section 138.3 for a misrepresentation in forward-looking information if the person or company proves all of the following things:

1. The document or public oral statement containing the forward-looking information contained, proximate to that information,

ii. a statement of the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection set out in the forward-looking information.

2. The person or company had a reasonable basis for drawing the conclusions or making the forecasts and projections set out in the forward-looking information.

Same

(9.1) The person or company shall be deemed to have satisfied the requirements of paragraph 1 of subsection (9) with respect to a public oral statement containing forward-looking information if the person who made the public oral statement,

(a) made a cautionary statement that the oral statement contains forward-looking information;

(b) stated that,

(i) the actual results could differ materially from a conclusion, forecast or projection in the forward-looking information, and

(ii) certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information; and

(i) the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information, and

(ii) the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information,

is contained in a readily-available document or in a portion of such a document and has identified that document or that portion of the document.

Same

(9.2) For the purposes of clause (9.1) (c), a document filed with the Commission or otherwise generally disclosed shall be deemed to be readily available.

Exception

(10) Subsection (9) does not relieve a person or company of liability respecting forward-looking information in a financial statement required to be filed under this Act or forward-looking information in a document released in connection with an initial public offering.

(11) Subsection 138.4 (11) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" in the portion before clause (a) and substituting "an action".

(12) Subsection 138.4 (12) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" and substituting "an action".

(13) Subsection 138.4 (13) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" and substituting "an action".

(14) Subsection 138.4 (14) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" in the portion before clause (a) and substituting "an action".

(15) Subsection 138.4 (15) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" in the portion before clause (a) and substituting "an action".

14. Subparagraph 3 i of subsection 138.5 (2) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is repealed and the following substituted:

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 public correction of the misrepresentation or the disclosure of the material change in the manner required under this Act, or

15. (1) Subsection 138.6 (1) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" and substituting "an action".

(2) Subsection 138.6 (2) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" and substituting "an action".

16. Subsection 138.7 (1) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" in the portion before clause (a) and substituting "an action".

17. Subsection 138.8 (1) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "No proceeding" at the beginning and substituting "No action".

18. (1) Section 138.9 of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" in the portion before clause (a) and substituting "an action".

(2) Clause 138.9 (a) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" and substituting "an action".

19. Section 138.10 of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is repealed and the following substituted:

Restriction on discontinuation, etc., of action

138.10 An action under section 138.3 shall not be discontinued, abandoned or settled 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 action, the court shall consider, among other things, whether there are any other actions outstanding under section 138.3 or under comparable legislation in other provinces or territories in Canada in respect of the same misrepresentation or failure to make timely disclosure.

20. Section 138.11 of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" and substituting "an action".

21. Section 138.12 of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" and substituting "an action".

22. Section 138.13 of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is repealed and the following substituted:

No derogation from other rights

138.13 The right of action for damages and the defences to an action under section 138.3 are in addition to, and without derogation from, any other rights or defences the plaintiff or defendant may have in an action brought otherwise than under this Part.

23. (1) Section 138.14 of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "proceeding" in the portion before clause (a) and substituting "action".

(2) Subclause 138.14 (a) (ii) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" and substituting "an action".

(3) Subclause 138.14 (b) (ii) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" and substituting "an action".

(4) Subclause 138.14 (c) (ii) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 185, is amended by striking out "a proceeding" and substituting "an action".

24. Subsection 142 (2) of the Act, as amended by the Statutes of Ontario, 1994, chapter 11, section 378 and 2002, chapter 22, section 186, 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, 126.1, 126.2, 129, 130, 130.1, 131, 134 and 135, Part XXIII.1 and section 139 do not apply to,

. . . . .

25. Paragraph 55.2 of subsection 143 (1) of the Act, as enacted by the Statutes of Ontario, 2002, chapter 22, section 187, is repealed and the following substituted:

55.2 Providing for the application of Part XXIII.1 to the acquisition of an issuer's security pursuant to a distribution that is exempt from section 53 or 62 and to the acquisition or disposition of an issuer's security in connection with or pursuant to a takeover bid or issuer bid.

55.2.1 Prescribing transactions or classes of transactions for the purposes of clause 138.2 (d).

Commencement

26. (1) Subject to subsection (2), this Schedule comes into force on the day The Right Choices Act (Budget Measures), 2003 receives Royal Assent.

Same

(2) Sections 4 and 10 to 23 come into force on a day to be named by proclamation of the Lieutenant Governor.

SCHEDULE L
TRUST BENEFICIARIES'
LIABILITY ACT, 2003

Limit on beneficiaries' liability

1. (1) The beneficiaries of a trust are not, as beneficiaries, liable for any act, default, obligation or liability of the trust or any of its trustees if, when the act or default occurs or the obligation or liability arises,

(a) the trust is a reporting issuer under the Securities Act; and

(b) the trust is governed by the laws of Ontario.

Exception

(2) Subsection (1) does not apply with respect to any act or default that occurred or any obligation or liability that arose before this Act came into force.

Governing law

(3) For the purposes of this section,

(a) a trust shall be deemed to be governed by the laws of Ontario if the trust instrument states that it is governed by the laws of Ontario;

(b) a trust shall be deemed not to be governed by the laws of Ontario if the trust instrument states that the trust is governed by the laws of another jurisdiction; and

(c) in case of a conflict between clauses (a) and (b), the trust is governed by the laws of the jurisdiction specified by the court.

Definition

(4) In this section,

"trust instrument" means, in relation to a trust, the document or documents that establish and govern the trust, but does not include a judgment or order of a court.

Liability in other circumstances

2. This Act does not affect the liability, if any, of the beneficiaries of a trust in any other circumstances.

Commencement

3. The Act set out in this Schedule comes into force on the day The Right Choices Act (Budget Measures), 2003 receives Royal Assent.

Short title

4. The short title of the Act set out in this Schedule is the Trust Beneficiaries' Liability Act, 2003.

EXPLANATORY NOTE

The Bill implements measures contained in the 2003 Budget. The major elements of the Bill are described below.

SCHEDULE A
AMENDMENTS TO THE
ASSESSMENT ACT

The Assessment Act currently provides an exemption from taxation for large non-profit theatres. An amendment to paragraph 27 of subsection 3 (1) of the Act provides that the exemption applies during the period when such a theatre is being built.

Currently, subsection 14 (1) of the Act specifies the information that must be included in the assessment roll for each municipality. An amendment to that subsection provides that the assessment roll must include such additional information as may be prescribed by regulation.

Subsection 19.0.1 (1) of the Act governs the determination of the assessed value of generating station buildings and structures and transformer station buildings and structures and certain other buildings and structures. An amendment provides that the Minister may, by regulation, specify the assessed value of particular buildings and structures.

Currently, subsection 19.1 (1) of the Act provides that, until 2005, land is assessed at its current value for a particular taxation year; that, for 2005, it is assessed as the average of its current value for 2004 and 2005; and that, for subsequent years, it is assessed as the average of its current value for the particular taxation year and the two preceding years. An amendment to that subsection deletes the references to 2005 and authorizes the Minister, by regulation, to specify the year to be used. The regulation is void if it is filed less than 18 months before the beginning of that specified year.

SCHEDULE B
AMENDMENTS TO THE
BUSINESS CORPORATIONS ACT

Subsection 241 (1) of the Business Corporations Act authorizes the Director to dissolve a corporation that is in default of its obligations under the Corporations Tax Act in the circumstances described in that subsection. An amendment provides that a corporation can also be dissolved if it is in default of its obligations under other specified tax statutes.

SCHEDULE C
AMENDMENTS TO THE
COMMODITY FUTURES ACT

Currently, section 59.2 of the Commodity Futures Act prohibits the making of misleading or untrue statements that significantly affect or would reasonably be expected to have a significant effect on the market price or a value of a commodity or contract. The section is amended so that it prohibits the making of misleading or untrue statements that would reasonably be expected to have a significant effect on the market price or value of a commodity or contract.

Subsection 60 (2.1) of the Act provides that, in specified circumstances, a person is not entitled to participate in a proceeding in which an order may be made under paragraph 10 of subsection 60 (1) against another person to disgorge amounts obtained as a result of non-compliance. An amendment provides that, in the specified circumstances, a person is also not entitled to participate in a proceeding in which an order may be made under paragraph 9 of subsection 60 (1) against another person to pay an administrative penalty.

SCHEDULE D
AMENDMENTS TO THE
COMMUNITY SMALL BUSINESS
INVESTMENT FUNDS ACT

An amendment to section 16.1 of the Community Small Business Investment Funds Act changes the annual date on which a labour sponsored investment fund that is a research oriented investment fund measures its compliance with the program's pacing requirements. The date is changed from December 31 to either August 31 or December 31, whichever is of most benefit to the research oriented investment fund.

Sections 18 and 20 of the Act are amended to permit labour sponsored investment funds to control eligible investments. Section 18.1 of the Act is amended to permit labour sponsored investment funds to increase their investment in listed companies. It is also amended to increase the maximum asset size of an eligible business for the purposes of the small business investment requirement from $5 million to $6 million.

An amendment to section 18.5 of the Act extends the deadline for registering a community small business investment fund from December 31, 2003 to December 31, 2004. Consequential amendments are made to sections 24.1 and 25 of the Act.

Section 18.5 of the Act is also amended to eliminate the requirement that, in order for a community small business investment fund to qualify under the Act, a financial institution or labour sponsored investment fund invest in it.

An amendment to section 24.1 of the Act reduces the amount invested in a community small business investment fund by a labour sponsored investment fund that the labour sponsored investment fund is permitted to apply against its own investment pacing requirements.

Sections 25 and 28.1 of the Act are amended to increase the incentives available to individual investors and certain corporations for investing in a community small business investment fund. The incentives are increased from a maximum of 15 per cent to a maximum of 30 per cent.

SCHEDULE E
AMENDMENTS TO THE
CORPORATIONS TAX ACT

The new section 13.7 of the Corporations Tax Act establishes a tax incentive for corporations with qualifying facilities for self-generated electricity. Section 13.8 is also enacted and complementary amendments are made to sections 1, 13.6, 14 and 35 of the Act.

Amendments are made to section 43.9 of the Act respecting the Ontario business-research institute tax credit. An amendment allows a corporation to claim the tax credit for the period during a taxation year that the corporation is not connected to an eligible research institute. Subsection 43.9 (26) provides that wages paid under a research contract to a related employee are not permanently disqualified from the tax credit. These amendments are made retroactive to May 7, 1997. The new subsection 43.9 (25.1) provides that interest is not payable on a corporation's tax savings from these amendments for taxation years ending before March 28, 2003.

The new section 43.13 of the Act establishes an apprenticeship tax credit. This is a 10 per cent refundable tax credit (15 per cent for businesses with payrolls of $400,000 or less) on the wages and salaries paid after March 27, 2003 by a corporation or partnership in respect of an apprentice employed in a qualifying apprenticeship. The maximum tax credit available for each apprentice is $6,000 over a 24-month employment period. Complementary amendments are made to sections 43.4, 44.1, 76, 78 and 80 of the Act.

Amendments to sections 66, 66.1 and 69 of the Act reduce the capital tax rate on a corporation's taxable paid-up capital or its taxable paid-up capital employed in Canada by 10 per cent on and after January 1, 2004.

An amendment to subsection 66.1 (4.5) of the Act extends the deadline for investing in a community small business investment fund from December 31, 2003 to December 31, 2004.

Technical amendments are made to the Act. The new subsection 11 (12.1) of the Act relates to the deductibility of foreign non-business income tax paid by a corporation. Amendments to clause 62 (1) (c) relate to the determination of the investment allowance for capital tax purposes.

Technical amendments are also made to the recurring definitions of "Ontario allocation factor" throughout the Act.

SCHEDULE F
AMENDMENTS TO THE
ELECTRICITY ACT, 1998

Currently, section 92 of the Electricity Act, 1998 requires Hydro One Inc., Ontario Power Generation Inc., their subsidiaries and every municipal electricity utility to make payments in lieu of property taxes to the Financial Corporation for land containing generating station buildings or structures or transformer station buildings or structures. An amendment to section 92 provides that, if the land is exempt from taxation under section 3.1 of the Assessment Act, no payment in lieu of property taxes is required under section 92.

SCHEDULE G
AMENDMENTS TO THE
INCOME TAX ACT

Amendments are made to subsection 3 (1) of the Income Tax Act to increase the threshold at which Ontario taxpayers are required to pay the provincial surtax. Effective January 1, 2004, the surtax will become payable when Ontario income tax exceeds $4,727, as adjusted for inflation. This threshold will be increased to $5,240 as of January 1, 2005. Consequential amendments are made to section 4.0.2 of the Act with respect to indexing.

Sections 4 and 4.0.1 of the Act are amended, effective January 1, 2003, to increase the amount available to individuals under the disability credit, the caregiver credit, the infirm dependant credit and the disability credit supplement for children with severe disabilities. Amendments to sections 4 and 4.0.1 also extend the caregiver credit and the infirm dependant credit to include spouses or common-law partners who are dependent on an individual by reason of a mental or physical infirmity and to provide more support to caregivers living apart from spouses, common-law partners, children or grandchildren who are dependent. Consequential amendments are also made to section 4.0.2 of the Act with respect to indexing.

An amendment to subsection 7 (2.4) of the Act increases the amount of the Ontario basic reduction for 2004 and subsequent years to $197, as adjusted for inflation.

Section 8 of the Act is amended and a new section 8.4.5 is enacted to provide an apprenticeship tax credit to eligible employers in respect of salary and wages paid to apprentices employed in qualifying apprenticeships. The tax credit is 10 per cent (15 per cent for businesses with payrolls of $400,000 or less) of the wages and salaries paid after March 27, 2003 by an eligible employer in respect of a qualifying apprenticeship. The maximum tax credit available for each apprentice is $6,000 over a 24-month employment period.

An amendment to subsection 8.5 (5) of the Act increases the threshold at which an individual's entitlement to the Ontario Child Care Supplement for Working Families is reduced. Beginning in July 2003, this threshold is increased from $20,000 to $20,750 of family net income.

SCHEDULE H
AMENDMENTS TO THE
LIMITATIONS ACT, 2002

The Schedule to the Limitations Act, 2002 is amended in relation to the limitation periods set out in the Securities Act. Currently, the Schedule lists the special limitation periods in specified provisions of the Securities Act that prevail over the general limitation periods established by the Limitations Act, 2002. The amendment adds to that list the special limitation period specified in section 138.14 of the Securities Act for actions commenced under section 138.3 (liability for secondary market disclosure) of the Act.

SCHEDULE I
AMENDMENTS TO THE
MUNICIPAL ACT, 2001

Amendments to section 308.1 of the Municipal Act, 2001 authorize municipalities to establish a tax ratio below 0.25 for the managed forests property class.

An amendment to section 474 of the Act provides that Part XXII.3 (Limitation on Taxes for Certain Property Classes Beginning in 2001) of the predecessor Act, the Municipal Act, continues to apply with respect to taxes imposed under that Part.

SCHEDULE J
AMENDMENTS TO THE
RETAIL SALES TAX ACT

Currently, subsection 18 (3) of the Retail Sales Tax Act permits the Minister of Finance to assess a person for tax payable under the Act, but only within four years after the tax becomes payable. Under the current Act, an exception to this four-year period is made where there has been neglect, carelessness, wilful default or fraud. Amendments to section 18 of the Act create another exception. The amendments permit a taxpayer to waive the four-year period by filing a waiver with the Minister. Once filed, the waiver may be revoked by the taxpayer, but it continues to have effect for one year.

Similar amendments are made to section 20 of the Act in respect of the assessment of penalties against vendors for failing to collect tax under the Act.

Under the new clause 48 (3) (c) of the Act, the Minister of Finance may make regulations providing for the use of purchase exemption certificates and other documents where purchasers are exempt from tax under the Act.

The new clause 48 (3) (s) of the Act authorizes a tax rebate for wind energy systems, micro hydro-electric energy systems and geothermal energy systems that are installed in residential premises after March 27, 2003 and before November 26, 2007. The details of the tax rebate are to be set out in regulations.

Other amendments to section 48 of the Act increase the maximum tax rebate for certain types of energy-efficient vehicles from $1,000 to $2,000. The increase applies to vehicles purchased after March 27, 2003.

SCHEDULE K
AMENDMENTS TO THE
SECURITIES ACT

The definition of "forward-looking information" in section 138.1 of the Securities Act is moved to subsection 1 (1) of the Act and is amended to specify that it includes all disclosure regarding possible events, conditions or results of operations, not just future-oriented financial information.

The definition of "mutual fund" in subsection 1 (1) of the Act is amended by deleting the authority for the Commission to designate an issuer or class of issuers as mutual funds or designating them not to be mutual funds.

A definition of "non-redeemable investment fund" is added to the Act.

Section 3.4 of the Act is amended in connection with the requirement that the Ontario Securities Commission pay into the Consolidated Revenue Fund certain money received by it to settle enforcement proceedings. The Minister of Finance is authorized to establish guidelines about the allocation of money received by the Commission in specified circumstances.

Clause 75 (3) (a) of the Act is amended to correct an error in a cross-reference.

Currently, section 126.2 of the Act prohibits the making of misleading or untrue statements that significantly affect or would reasonably be expected to have a significant effect on the market price or value of a security. It is amended so that it prohibits misleading or untrue statements that would reasonably be expected to have a significant effect on the market price or value of a security. A further amendment specifies that a breach of this prohibition does not give rise to a cause of action for damages.

Subsection 127 (3.1) of the Act provides that, in specified circumstances, a person is not entitled to participate in a proceeding in which an order may be made under paragraph 10 of subsection 127 (1) against another person to disgorge amounts obtained as a result of non-compliance. An amendment provides that, in the specified circumstances, a person is also not entitled to participate in a proceeding in which an order may be made under paragraph 9 of subsection 127 (1) against another person to pay an administrative penalty.

Technical amendments are made to subsections 130 (1), 130.1 (1), 131 (1) and (2) of the Act concerning liability for misrepresentation in various types of documents.

The new section 132.1 provides that a person or company is not liable for a misrepresentation in forward-looking information contained in specified types of documents in the circumstances described in that section.

Technical amendments are made to sections 138.1 to 138.14 of the Act. They include replacing references to "proceeding" with "action" in those sections.

Subsection 138.4 (9) of the Act establishes a statutory defence in specified circumstances for persons and companies when there is a misrepresentation in a public oral statement containing forward-looking information. The new subsections 138.4 (9.1) and (9.2) of the Act provide that, in specified circumstances, a person or company shall be deemed to have satisfied certain requirements for the statutory defence.

An amendment to subsection 142 (2) of the Act provides that the Crown is exempt from liability under sections 126.1 (fraud and market manipulation), 126.2 (misleading or untrue statements) and 130.1 (liability for misrepresentation in offering memorandum) of the Act.

An amendment to subsection 143 (1) of the Act specifies that the Commission may make rules under the Act to provide that Part XXIII.1 (Civil Liability for Secondary Market Disclosure) of the Act applies to certain acquisitions or dispositions of an issuer's security, and to provide that the Part does not apply to certain transactions or classes of transactions.

SCHEDULE L
TRUST BENEFICIARIES'
LIABILITY ACT, 2003

A new statute, the Trust Beneficiaries' Liability Act, 2003, is set out in this Schedule. It governs the liability of beneficiaries of a trust, if the trust is a reporting issuer under the Securities Act and is governed by the laws of Ontario.

The new Act specifies that the beneficiaries of such a trust are not liable, as beneficiaries, for any act, default, obligation or liability of the trust or any of its trustees. However, this protection for beneficiaries is restricted: it applies only for acts, defaults, obligations or liabilities that occur when a trust is a reporting issuer and is governed by the laws of Ontario; and it applies only for acts, defaults, obligations or liabilities that occur after the Bill receives Royal Assent.