[38] Bill 85 Original (PDF)

Bill 85 2004

An Act to affirm the
Taxpayer Protection Act, 1999

Preamble

On September 11, 2003, Dalton McGuinty, before his election as Premier, signed a written pledge "not to raise taxes or implement a new tax without the explicit consent of the voters" through a referendum as required by the Taxpayer Protection Act, 1999. He also stated publicly that a Government led by him would comply with that Act.

The Taxpayer Protection Act, 1999 protects taxpayers by prohibiting a member of the Executive Council from including in a bill a provision that increases a tax rate or establishes a new tax unless, before the bill is introduced, a referendum is held to authorize the provision.

On May 18, 2004, the Minister of Finance in Premier McGuinty's Government introduced Bill 83 (An Act to implement Budget Measures) to amend the Taxpayer Protection Act, 1999 to create an exception for that prohibition so that a bill can be introduced to include the following two taxes: a new tax under the Income Tax Act to be called the Ontario Health Premium and a provision concerning the tax rate for qualifying environmental trusts under the Income Tax Act. That exception does violence to the spirit and intent of the Taxpayer Protection Act, 1999. Accordingly, it is vital for the Assembly not to pass the amendment to that Act proposed in Bill 83.

For many reasons, it is vital for the Government of Ontario to comply with the Taxpayer Protection Act, 1999, as it read on May 17, 2004, the day before Bill 83 was introduced. Those reasons include protecting the right of the taxpayers of Ontario to receive government that is fiscally prudent and accountable to them and ensuring the integrity of the political process, whereby the Government of Ontario keeps its promises on fiscal matters except if it receives the permission of the electorate to change them. Restricting new taxes and tax increases helps to ensure the well-being of the Ontario economy and to preserve Ontario's economic competitiveness.

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

Limits on introducing tax bill

1.  Despite any other Act, the following provisions shall not be included in any bill unless the conditions set out in clauses 2 (1) (a) and (b) of the Taxpayer Protection Act, 1999 have been complied with in respect of the provisions:

1. A provision that amends the Income Tax Act to establish a new tax called the Ontario Health Premium in English and contribution-santé de l'Ontario in French.

2. A provision that amends section 4.1 of the Income Tax Act to provide that the tax payable by a qualifying environmental trust for a taxation year shall be calculated at the same rate as the specified basic rate of tax payable by a corporation under subsection 38 (2) of the Corporations Tax Act.

No collection of unauthorized tax

2.  (1)  Despite any Act, the Crown shall not collect any money under either of the taxes described in subsection (2) unless,

(a) a referendum concerning the tax is held under the Taxpayer Protection Act, 1999 before the Act that this subsection overrides was introduced as a bill in the Assembly; and

(b) the referendum authorizes the tax.

Taxes affected

(2)  The taxes mentioned in subsection (1) are the Ontario Health Premium under the Income Tax Act and the increase in the tax payable by a qualifying environmental trust for a taxation year under section 4.1 of the Income Tax Act to be calculated at the same rate as the specified basic rate of tax payable by a corporation under subsection 38 (2) of the Corporations Tax Act.

Right of set-off

(3)  A person who has paid any money to the Crown to which the Crown is not entitled under this section is entitled to set off the payment against any money that the person owes to the Crown.

3.  (1)  This section applies only if Bill 83 ( An Act to implement budget measures , introduced on May 18, 2004) receives Royal Assent.

(2)  Subsection 2 (7) of the Taxpayer Protection Act, 1999, as enacted by section 17 of Bill 83, is repealed.

4.  References in this Act to provisions of Bill 83 are references to those provisions as they were numbered in the first reading version of the Bill.

Commencement

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

Same

(2)  Subsection (3) applies only if Bill 83 ( An Act to implement budget measures , introduced on May 18, 2004) receives Royal Assent.

Same

(3)  Sections 2, 3 and 4 shall be deemed to have come into force on the day section 17 of Bill 83 comes into force.

Short title

6.  The short title of this Act is the Taxpayer Protection Affirmation Act, 2004.

EXPLANATORY NOTE

The Bill affirms the Taxpayer Protection Act, 1999, as it read on May 17, 2004, the day before Bill 83 was introduced. Bill 83 proposes to amend that Act so that two tax measures can be included in a bill that does not comply with the conditions set out in subsection 2 (1) of that Act. This Bill maintains those conditions. If Bill 83 is enacted, this Bill repeals the amendment as soon as it comes into force.

The Crown is not entitled to collect any money under the two measures unless the bill that implements those measures complies with the conditions set out in subsection 2 (1) of the Taxpayer Protection Act, 1999. A person has a right of set-off for any money paid to the Crown that the Crown is not entitled to collect.