First

Session, 50th General Assembly

Elizabeth II, 2022

BILL 63

AN ACT TO AMEND THE

REVENUE ADMINISTRATION ACT NO. 5

Received

and Read the First Time ................................................................

Second

Reading ............................................................................................

Committee .....................................................................................................

Third

Reading ...............................................................................................

Royal

Assent .................................................................................................

HONOURABLE SIOBHAN

COADY

Minister of Finance

and President of Treasury Board

Ordered to be printed by

the Honourable House of Assembly

EXPLANATORY NOTES

This Bill would amend the Revenue Administration Act to

add an offence where a person

who is not a licensed wholesaler sells gasoline, carbon products or tobacco to

another wholesaler;

clarify that in order to

qualify for the reduced gasoline tax rate gasoline for use in an aircraft is

required to be delivered to the aircraft;

remove the requirement that a

seller of furnace oil, stove oil, kerosene, naphtha, butane gas, propane gas or

liquefied petroleum gas that is not used for the generation of power in an

internal combustion engine obtain a wholesaler or retailer licence for the

purposes of carbon tax;

allow, as a deduction from

gross revenue, costs directly incurred by a mine operator to obtain financial

assurance to fulfill the obligations under the Mining Act to provide financial assurance as part of a

rehabilitation and closure plan;

allow an operator that is a

partnership, limited partnership, joint venture, co-venture, association or

syndicate to request approval from the minister to deduct from gross revenue an

amount in relation to exploration expenditures incurred by one its members

based on the member's ownership interest in the profits of the operator;

allow an operator that is partnership,

limited partnership, joint venture, co-venture, association or syndicate to request

approval from the minister to claim against tax otherwise payable an amount in

relation to the corporate income tax paid in the preceding year by one of its

members based on the member's ownership interest in the profits of the

operator;

allow an operator of a mine to

roll over assets at undepreciated capital cost, transfer unclaimed pre-production

and exploration expenditures and include provisions to imply a deemed

disposition of assets when an operator changes its legal form without

substantially changing the percentage ownership and continues to operate the

mine in the province;

exclude from retail sales tax

on insurance premiums any fees that are taxable for purposes of the harmonized

sales tax;

replace all

references to "Trial Division" with the correct reference

"Supreme Court"; and

incorporate gender-neutral language.

A BILL

AN ACT TO AMEND THE REVENUE ADMINISTRATION

ACT NO. 5

Analysis

S.2 Amdt .

Definitions

S.7 Amdt .

Remissions

S.8 Amdt .

Trustee

S.11.1 Amdt .

Contemporaneous documentation

S.12 Amdt .

Notice of assessment

S.14 Amdt .

Appeal

to Supreme Court

S.15 Amdt .

Appeal to Court of Appeal

S.19 Amdt .

Estimating tax in default

S.23 Amdt .

Certificate of judgment

S.24 Amdt .

Demand on third party

S.25 Amdt .

Director's liability

S.26 Amdt .

Exercise of recovery powers

S.27 Amdt .

Third party claims

S.32 Amdt .

Offences

S.38 Amdt .

Contravention of Act suspected

S.41 Amdt .

Contravention suspected

S.43 Amdt .

Contravention re: contraband suspected

S.44 Amdt .

Seizure of contraband

S.45 Amdt .

Disposal or return of evidence

S.49 Amdt .

Affidavit as proof

S.51 Amdt .

Tax levied on gasoline

S.54 Amdt .

Gasoline held for consumption

S.68 Amdt .

Gasoline delivery

S.69 Amdt .

Powers re interjurisdictional carrier

S.72.3 Amdt .

Carbon product held for consumption

S.72.5.1 Added

Saving

provision

S.72.8 Amdt .

Carbon product delivery

S.75 Amdt .

Payment of tax

S.81 Amdt .

Gross revenue

S.82 Amdt .

Net income

S.82.1 Added.

Rollovers

S.84 Amdt .

Corporate income tax credit

S.85 Amdt .

Mineral rights tax

S.89 Amdt .

Trade-in

S.91 Amdt .

Effect of return

S.91.1 Amdt .

Tax on insurance premiums

S.91.5 Amdt .

Displaying certificate

S.94 Amdt .

Transporter duties

S.95 Amdt .

Prohibition

S.96 Amdt .

Permits

S.106.3 Amdt .

Refund of tax

S.112 Amdt .

Regulations re: tobacco tax

Commencement

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

SNL2009 cR-15.01

as amended

(1) Clause 2(m )( i )(

A) of the Revenue

Administration Act is amended by deleting the words "his or her"

and substituting the words "the person's".

(2) Subparagraph 2(u )( iii)

of the Act is amended by deleting the words "his or her" and

substituting the word "the".

(3) Paragraph 2( ff ) of

the Act is amended by deleting the words "him or her" and substituting

the words "the person".

(4) Clause 2( kkk )( iii)(

A) of the Act is amended by deleting the words

"his or her" wherever they appear and substituting the words

"the person's".

2. Subsection 7(1) of the Act is amended by

deleting the words "he or she" and substituting the words "the

minister".

3. Paragraph 8(

b) of the Act is amended by

deleting the words "his or her" and substituting the words "the

person's".

4. Subsection 11.1(1) of the Act is amended by

deleting the words "he or she" and substituting the words "the

operator".

5. Subsection 12(6) of the Act is amended by

deleting the words "Trial Division" and substituting the words

"Supreme Court".

6. (1) Subsection 14(1) of the Act is repealed and

the following substituted:

Appeal to Supreme

Court

(1) Part

or all of a reply from the minister in response to a notice of objection may be

appealed to the Supreme Court by commencing a proceeding in the Supreme Court

within 60 days of receiving the minister's reply.

(2) Subsection 14(2) of the Act is amended by

deleting the words "he or she" and substituting the words "the

judge".

Section 15 of the Act is amended by deleting

the words "Trial Division" wherever they appear and substituting the

words "Supreme Court".

8. Paragraph 19(1 )(

c) of

the Act is amended by deleting the words "his or her" and

substituting the words "the taxpayer's".

Section 23 of the Act is amended by deleting

the words "Trial Division" wherever they appear and substituting the

words "Supreme Court".

10. Subsection 24(1) of the Act is amended by

deleting the words "him or her" and substituting the words "the

person".

11. Subsection 25(3) of the Act is amended by

deleting the words "he or she" and substituting the words "the

director".

Section 26 of the Act is amended by deleting

the words "him or her" and substituting the words "the

person".

13. Subsection 27(3) of the Act is amended by

deleting the words "he or she" and substituting the words "the

judge".

(1) Subparagraph 32(1 )( b)(

i) of the Act is amended by deleting the words "him or

her" and substituting the words "the person".

(2) Subparagraph 32(1 )( b)(ii)

of the Act is amended by deleting the words "he or she" and

substituting the words "the person".

(3) Paragraph 32(1 )(

d) of

the Act is amended by deleting the words "of him or her".

(4) Paragraph 32(2 )(

b) of

the Act is amended by deleting the words "his or her" and substituting

the word "the".

(5) Subsection 32(2) of the Act is amended by

deleting the word "or" after paragraph (c), adding a semi-colon and

the word "or" after paragraph (

d) and adding immediately after

paragraph (

d) the following:

(

e) not being a wholesaler,

sells gasoline or a carbon product to a wholesaler

(6) Subsection 32(6.1) of the Act is amended by

deleting the words "he or she" and substituting the words "the

person".

(7) Paragraph 32(7 )(

c) of

the Act is repealed and the following substituted:

(

c) not having a valid

wholesaler's licence, sells tobacco to a wholesaler or retailer;

15. Subsection 38(3) of the Act is amended by

deleting the words "his or her" and substituting the words "the

inspector's".

16. Subsection 41(2) of the Act is amended by

deleting the words "he or she" and substituting the words "the

inspector".

17. Subsection 43(3) of the Act is amended by

deleting the words "his or her" and substituting the words "the

inspector's".

Section 44 of the Act is amended by deleting

the words "he or she" wherever they appear and substituting the words

"the inspector".

19. (1) Subsection 45(2) of the Act is amended by

deleting the words "to him or her".

(2) Subsection 45(3) of the Act is repealed and

the following substituted:

(3) A person from whom tobacco seized as

contraband under subsection 42 (2),

section 43 or 44 who is not

convicted of an offence under

section 32 in

relation to that seizure and who establishes to the satisfaction of the

minister that the tobacco is not contraband and is the person's property may

apply to the minister to have that property returned or for reimbursement of

the value of that tobacco and the minister shall return that property or pay

out to the person from the Consolidated Revenue Fund an amount equal to the

value of tobacco that was the person's tobacco at the time of its seizure.

20. Subsection 49(3) of the Act is amended by

deleting the words "he or she" and substituting the words "the

inspector".

21. Paragraph 51(

d) of the Act is repealed and the

following substituted:

(

d) on gasoline delivered

for consumption or use in an aircraft, a tax of $0.025 per litre; and

Section 54 of the Act is amended by

(

a) deleting the words

"he or she" and substituting the words "the person"; and

(

b) deleting the words

"himself or herself" and substituting the words "the person's

own consumption or use".

23. Paragraph 68(

a) of the Act is amended by

deleting the words "his or her" and substituting the words "the

driver's".

24. Subsection 69(2) of the Act is amended by

deleting the words "he or she" and substituting the words "the

inspector".

Section 72.3 of the Act is amended by

(

a) deleting the words

"he or she" and substituting the words "the person"; and

(

b) deleting the words

"himself or herself" and substituting the words "the person's

own consumption or use".

26. The Act is amended by adding immediately after

section 72.5 the following:

Saving provision

72.5.1

(1) Nothing in this Part

requires a person to obtain either a retailer or wholesaler licence merely

because that person sells furnace oil, stove oil, kerosene, naphtha, butane

gas, propane gas or liquefied petroleum gas for purposes other than use in the

generation of power in internal combustion engines.

(2) A person mentioned in subsection (1) shall not

rebrand products described in subsection (1) and sell them for consumption in

internal combustion engines, whether as taxable carbon products or otherwise,

unless that person is in possession of a wholesaler licence issued under

Part

III.2.

(3) Notwithstanding subsections (1) and (2), a

person selling products under this

section shall keep those books and records

the minister may, by regulation, prescribe, and shall be subject to Parts I and

II of this Act and any regulations made under those Parts.

(4) A person selling products under this

section

shall provide to the purchaser an invoice containing the information that may

be required under the regulations.

27. Paragraph 72.8(

a) of the Act is amended by

deleting the words "his or her" and substituting the words "the

driver's ".

Section 75 of the Act is amended by deleting

the words "him or her" and substituting the words "the

person".

(1) Paragraph 81(1 )(

e) of the Act is repealed and the following substituted:

(

e) withdrawals from a form of financial assurance referred to in

subsection 10(3) of the Mining Act ; and

(2) Subsection 81(2) of the Act is amended by

deleting the words "he or she" and substituting the words "the

operator".

(3) Subsection 81(3) of the Act is amended by

deleting the words "his or her own determination" and substituting

the words "a different determination".

30. (1) Subsection 82(1) of the Act is amended by

deleting the word "and" at the end of paragraph (

e) and adding

immediately after that paragraph the following:

(e.1) costs incurred to obtain financial assurance

for a rehabilitation and closure plan approved by the minister under

section 9

of the Mining Act ; and

(2) Section 82 of the Act is amended by adding

immediately after subsection (2) the following:

(2.1) Notwithstanding subsection (2), where an

operator is a partnership, limited partnership, joint venture, co-venture, association

or syndicate, the operator may request approval from the minister to deduct

from gross revenue an amount in relation to exploration expenditures incurred

by one of its members anywhere in the province before the commencement of

commercial production.

(2.2) A request referred to in subsection (2.1)

shall

(

a) be made in the form and

manner set by the minister; and

(

b) include the consent

of the member.

(2.3) Where the minister

approves a request under subsection (2.1), the amount referred to in that subsection

shall be the lesser of

(

a) the actual

exploration expenditures incurred by the member and not previously deducted;

and

(

b) the member's proportionate share of net income

under this section, before any deduction under subsection (2.1), based on the

member's ownership interest in the profits of the operator subject to the tax

under

section 80.

(3) Subsection 82(6) of the Act is amended by

deleting the words "his or her own determination" and substituting

the words "a different determination".

31. The Act is amended by adding immediately after

section 82 the following:

Rollovers

82.1

(1) Notwithstanding subsections 81(2) and 82(5)

and subject to subsection (2), where an operator transfers its mining lease and

other assets to another operator, the operator who is transferring the mining

lease and assets and the operator who is receiving the mining lease and assets

may jointly request approval from the minister for the following:

(

a) that for the

purposes of

section 60 of the regulations, the amount paid for the acquisition

of the assets be considered to be equal to the transferring operators

undepreciated capital cost;

(

b) that

for the purposes of calculating the processing allowance under

section 61 of

the regulations, the original cost of the assets being transferred be

considered to be equal to the original cost of the assets to the operator who

is transferring the assets; and

(

c) that for the

purposes of paragraph 82(1)(

c) and subsection 82(2), any pre-production

expenditures and exploration expenditures of the operator transferring its

mining lease and assets that have not been deducted in a previous year be

considered to be an amount incurred by the operator who is receiving the

assets.

(2) Subs ection

(1) only applies where the owner of the operator that is transferring the

mining lease and assets has substantially the same ownership interest in the

operator that is receiving the mining lease and assets.

(3) Any assets

of the operator who is transferring assets under this

section that are not

transferred in accordance with this

section shall be considered to have been

disposed of at fair market value.

(4) For

the purposes of paragraph (1)(a), the transferring operators undepreciated

capital cost means the undepreciated capital cost of the assets to the

operator who is transferring the assets immediately before the date of transfer.

(1) Section 84 of the Act is amended by adding

immediately after subsection (1) the following:

(1.1) Notwithstanding subsection (1), where an

operator is a partnership, limited partnership, joint venture, co-venture, association

or syndicate, the operator may in respect of the current tax year request

approval from the minister to claim against tax otherwise payable an amount in

relation to the corporate income tax paid to the province in the preceding year

by one of its members.

(1.2) A request referred to in subsection (1.1)

shall

(

a) be made in the form

and manner set by the minister; and

(

b) include the consent

of the member.

(1.3) Where the minister

approves a request under subsection (1.1), the amount referred to in that

subsection shall be the lesser of

(

a) the actual corporate income

tax paid to the province by the member; and

(

b) the member's proportionate

share of taxable income under subsection 83(1) based on the member's ownership interest

in the profits of the operator.

(2) Subsection 84(2) of the Act is repealed and

the following substituted:

(2) Subsections (1) and

(1.1) apply only for 10 consecutive years beginning in the year in which

commercial production is achieved in the mine from which the mining income is

derived, but the cumulative amount of the deduction shall not exceed $20

million.

(3) Subsections 84(3) to (5) of the Act are

repealed and the following substituted:

(3) A credit under

subsections (1) and (1.1) are applicable only if all depreciation and exploration

expenses available in the year have been utilized by the operator.

(4) The total amount of both

credits in respect of corporate income tax under subsections (1) and (1.1) for

a year shall be the lesser of

(a) $2 million, and

(

b) a mounts payable under the Income Tax Act, 2000 for the year

in respect of mining operations.

(5) Where a corporate

income tax credit has been claimed with respect to the corporate income tax

paid for a particular tax year and an operator or member has subsequently been

subject to a reassessment with respect to that tax year, the operator or member

shall inform the minister of that reassessment and the mining tax payable under

this Part shall be reassessed as appropriate.

Section 85 of the Act is amended by adding

immediately after subsection (4) the following:

(5) Notwithstanding paragraph (4)(b), where a

person referred to in that paragraph is a partnership, limited partnership, joint

venture, co-venture, association or syndicate, the person may request approval

from the minister to include in exploration expenditures deductible under that

paragraph, an amount in relation to exploration expenditures incurred by one of

its members.

(6) A request referred to in subsection (5) shall

(

a) be made in the form and

manner set by the minister; and

(

b) include the consent

of the member.

(7) Where the minister approves a request under

subsection (5), the amount referred to in that subsection shall be the lesser

(

a) the actual

exploration expenditures incurred by the member and not previously deducted

against tax payable for any mining operations in the province; and

(

b) the member's proportionate share of net

revenue under subsection (4), before any deduction referred to in subsection

(5), based on the member's ownership interest in the profits of the person

referred to in paragraph (4)(

b) subject to the tax under subsection (1).

Section 89 of the Act is amended by

(

a) deleting the words

"he or she" wherever they appear and substituting the words "the

person"; and

(

b) deleting the words

"to him or her".

Section 91 of the Act is amended by deleting

the words "to him or her".

(1) Section 91.1 of the Act is amended by

adding immediately before subsection (2) the following:

(1.2) Notwithstanding subsection (1), tax is not

payable on any portion of a premium that is subject to tax under subsection

165(2) of the Excise Tax Act

(Canada).

(2) Subsection 91.1(9) of the Act is amended by

(

a) deleting the words

"by him or her"; and

(

b) deleting the words

"he or she" and substituting the words "the collector".

Section 91.5 of the Act is amended by deleting

the words "his or her" wherever they appear and substituting the

words "the seller's".

38. Subsection 94(1) of the Act is amended by deleting

the words "him or her" and substituting the words "the

person".

39. Subsection 95(2) of the Act is amended by

deleting the words "he or she" and substituting the words "the

person".

40. Subsection 96(1) of the Act is amended by

deleting the words "he or she" and substituting the words "the

person".

(1) Subsection 106.3(1) of the Act is amended

by deleting the words "to him or her".

(2) Subsection 106.3(2) of the Act is amended by

(

a) deleting the words

"by him or her"; and

(

b) deleting the words

"he or she" and substituting the words "the retailer".

42. Paragraph 112(1 )(

j) of

the Act is amended by deleting the words "he or she" and substituting

the words "the transporter".

Commencement

Section 26 is considered to have come into

force on January 1, 2019.

Queen's Printer