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Volume 61, No. 20

196/2018

The British Columbia Gazette,

Part II

October 9, 2018

B.C. Reg. 196/2018 , deposited October 2, 2018, under the PROVINCIAL SALES TAX ACT [sections 236 and 241]. Order in Council 513/2018, approved and ordered October 2, 2018.

On the recommendation of the undersigned, the Lieutenant Governor, by and with the advice and consent of the Executive Council, orders that the Provincial Sales Tax Exemption and Refund Regulation, B.C. Reg. 97/2013, is amended as set out in the attached Appendix.

— C. JAMES, Minister of Finance and Deputy Premier ; D. EBY, Presiding Member of the Executive Council .

Appendix

1 The Provincial Sales Tax Exemption and Refund Regulation, B.C. Reg. 97/2013, is amended by adding the following Part:

Part 5.1 – Specified Major Projects

Division 1 –

Definitions

Definitions and

interpretation

120.3 In this Part:

“cut-off date” , in relation to a project, means the cut-off date specified in

Schedule 6 for the project;

“primarily” means more than 50%;

“project” means a project specified in

Schedule 6.

Division 2 – Exemptions

Tangible personal property for use in project

120.4

(1) Tangible personal property is exempt from tax imposed under

Part 3 of the Act, other than Division 9 of that Part, if obtained

(

a) before the cut-off date for a project, and

(

b) for use primarily for the purposes of the project during the period that

(

i) begins on the date the tangible personal property is obtained for that purpose, and

(ii) ends on the earliest of the following dates, as applicable:

(

A) the cut-off date for the project;

(

B) the date that is 2 years after the date referred to in subparagraph (i);

(

C) the date on which the tangible personal property is sold or otherwise disposed of;

(

D) if the tangible personal property was obtained under a lease, the date on which the lessee ceases to lease the tangible personal property.

(2) Tangible personal property is exempt from tax imposed under Division 9 of

Part 3 of the Act if obtained and used as set out in subsection (1) (

a) and (

b) of this section.

Software

120.41

(1) In this section, “qualifying infrastructure” , in relation to a project, means qualifying infrastructure specified in

Schedule 6 for the project.

(2) Subject to subsection (3), software is exempt from tax imposed under

(

a) Part 3 of the Act, other than Division 9 of that Part, or

(

b) Part 4 of the Act, other than

section 109 of that Part.

(3) The exemption under subsection (2) applies only to software obtained, before the cut-off date for a project, for use

(

a) primarily to operate, control or monitor qualifying infrastructure for the project, or

(

b) to operate particular machinery or equipment for use primarily to operate, control or monitor qualifying infrastructure for the project.

Services

120.42 A related service provided, before the cut-off date for a project, in relation to tangible personal property that is exempt under

section 120.4 of this regulation in relation to the project is exempt from tax imposed under Division 2 of

Part 5 of the Act, other than

section 120.1 of that Part.

Electricity

120.43

(1) In this section, “qualifying worksite” , in relation to a project, means a qualifying worksite specified in

Schedule 6 for the project.

(2) Electricity is exempt from tax imposed under

Part 3 of the Act if the seller provides, before the cut-off date for a project, the electricity through a meter that services only a qualifying worksite.

Division 3 – Exclusions from Exemptions

Tangible personal property excluded from exemptions under Division 2

120.5 Despite Division 2 of this Part, the following are not exempt under that Division:

(

a) vehicles designed to be ordinarily used on a public highway, other than bulldozers, backhoes and excavators that are exempt under

section 120.4 [tangible personal property for use in project] ;

(

b) railway rolling stock, locomotive engines and non-turbine aircraft;

(

c) software, other than software that is exempt under

section 120.41 [software] ;

(

d) electricity, other than electricity that is exempt under

section 120.43 [electricity] .

Division 4 – Prescribed Provisions

Definition

120.6 In this Division, “tangible personal property exemption provisions” means the provisions in Division 2 of this Part, other than

section 120.42 [services] .

Provisions prescribed for purposes of sections 89 (2), 90 (4), 99 (6) and 112 (2) of Act

120.61

(1) The tangible personal property exemption provisions are prescribed for the purposes of the following provisions of the Act:

(a)

section 89 (2) [tax on acquisition of eligible tangible personal property] ;

(b)

section 90 (4) [tax on eligible tangible personal property brought into British Columbia] ;

(c)

section 99 (6) [tax on acquisition of exclusive product by independent sales contractor] .

(2) Section 120.41 [software] of this regulation is prescribed for the purposes of

section 112 (2) [tax on purchase of software by small seller] of the Act.

Provisions prescribed for purposes of

section 145 of Act

120.62

(1) The tangible personal property exemption provisions are prescribed for the purposes of

section 145 (1) (a) [provisions providing exemptions in relation to tangible personal property] of the Act.

(2) Section 120.41 [software] of this regulation is prescribed for the purposes of

section 145 (1) (b) [provisions providing exemptions in relation to software] of the Act.

(3) Section 120.42 [services] of this regulation is prescribed for the purposes of

section 145 (2) [evidence required to claim certain exemptions in relation to taxable services] of the Act.

Declarations required under

section 145 of Act

120.63

(1) For the purposes of

section 145 (1.1) (a) [evidence required to claim certain exemptions in relation to tangible personal property or software] of the Act, in relation to a person who alleges that

(

a) tangible personal property is exempt under any of the tangible personal property exemption provisions, or

(

b) Part 4 software is exempt under

section 120.41 [software] of this regulation,

the collector is required to obtain a declaration in a form acceptable to the director.

(2) For the purposes of

section 145 (2) (a) [evidence required to claim certain exemptions in relation to taxable services] of the Act, in relation to a person who alleges that a related service is exempt under

section 120.42 [services] of this regulation, the collector is required to obtain a declaration in a form acceptable to the director.

Declaration required under

section 30 (7) (

a) of Act

120.64 For the purposes of

section 30 (7) (a) [evidence required to claim exemption in relation to tax payable in respect of vehicle] of the Act, in relation to a person who alleges that a vehicle is exempt under

section 120.4 [tangible personal property for use in project] of this Part, the Insurance Corporation of British Columbia is required to obtain a declaration in a form acceptable to the director.

2 The following

Schedule is added:

Schedule 6

(Part 5.1)

Specified Major Projects – Kitimat LNG Facility (LNG Canada)

Definitions

1 In this Schedule:

“liquefied natural gas” means natural gas from which natural gas liquids have been predominantly removed and that is liquefied;

“LNG facility” means the LNG facility specified in

section 4;

“LNG plant” means the LNG plant specified in

section 5;

“natural gas liquids” means butane, ethane, propane or pentanes plus and any other condensates, or any combination of them, whether in gaseous or liquid form;

“project” means the project specified in

section 2.

Project

2 For the purposes of

Part 5.1, the following activities constitute a project:

(

a) constructing the LNG facility;

(

b) equipping the LNG facility for initial operation;

(

c) constructing anchorages, berthing areas and water access routes for the LNG facility, including, without limitation, placing navigational aids;

(

d) constructing the Terminal A Extension project specified in

section 6 of this Schedule;

(

e) carrying out environmental measures described in

section 7 of this Schedule.

Cut-off date for project

3 For the purposes of

Part 5.1, the cut-off date for the project is the earliest of the following dates:

(

a) the date that is 7 years after the date this

section comes into force;

(

b) the date on which the first 2 liquefaction trains of the LNG facility have been operated for the purpose of producing liquefied natural gas;

(

c) the date on which the first 2 liquefaction trains of the LNG facility are, in the opinion of the director, capable of producing liquefied natural gas.

LNG facility

(1) Subject to subsection (2), for the purposes of this Schedule, the LNG facility

is the facility that is to

(

a) be constructed by LNG Canada Development Inc., and

(

b) consist of all of the following:

(

i) the LNG plant to be located in the District of Kitimat;

(ii) improvements to land that is

(

A) subjacent to or contiguous with the LNG plant, and

(

B) to be used for the operations of the LNG plant.

(2) The LNG facility does not include any of the following:

(

a) a pig trap;

(

b) a natural gas pipeline upstream of a pig trap;

(

c) tangible personal property, or improvements to real property, used primarily in relation to a natural gas pipeline described in paragraph (b);

(

d) a pipeline used to transport liquefied natural gas, natural gas liquids or natural gas from the LNG plant or the LNG facility, except a pipeline used for a purpose described in

section 5 (c) (ii) or (iv);

(

e) a vehicle or vessel that is used to transport liquefied natural gas or natural gas liquids from the LNG plant or the LNG facility.

LNG plant

5 For the purposes of this Schedule, the LNG plant consists of all of the following:

(

a) tangible personal property and improvements to real property that are part of a series of systems used or intended to be used for liquefying natural gas, including, without limitation, tangible personal property and improvements to real property that are used or intended to be used for one or more of the following purposes:

(

i) delivering natural gas to the series of systems;

(ii) receiving or measuring natural gas delivered to the series of systems;

(iii) removing natural gas liquids from natural gas and separating those liquids;

(iv) storing natural gas liquids;

(

b) tangible personal property and improvements to real property that are part of the series of systems referred to in paragraph (

a) and used or intended to be used for storing liquefied natural gas;

(

c) tangible personal property and improvements to real property that are part of a series of systems used or intended to be used for one or more of the following purposes if the series of systems immediately follows the series of systems referred to in paragraph (a):

(

i) measuring liquefied natural gas or natural gas liquids that are to be loaded for shipment or transmitted for regasification;

(ii) loading liquefied natural gas or natural gas liquids for shipment;

(iii) supporting the loading of liquefied natural gas or natural gas liquids for shipment;

(iv) transmitting liquefied natural gas for regasification;

(

d) tangible personal property and improvements to real property that are used or intended to be used to generate electrical power if the electrical power is to be used primarily for the series of systems referred to in paragraph (a);

(

e) tangible personal property and improvements to real property that are necessary for complying with health, safety and environmental standards required by law in relation to the use or intended use of the tangible personal property and improvements to real property that are described in paragraphs (

a) to (d).

Terminal A Extension project

6 For the purposes of this Schedule, the Terminal A Extension project is the project specified in certificate T15–01 issued under the Environmental Assessment Act .

Environmental measures

7 For the purposes of this Schedule, actions are environmental measures if a person is required by law to carry out the actions to mitigate or otherwise offset impacts on fish, wildlife, fish or wildlife habitat or the environment of the activities that the person carries out for the project.

Software – qualifying infrastructure

8 For the purposes of

Part 5.1, the LNG plant is qualifying infrastructure for the project.

Electricity – qualifying worksites

9 For the purposes of

Part 5.1, the following are qualifying worksites for the project:

(

a) the LNG facility;

(

b) a site that is used substantially for the project.

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