BILL NO. 97

(as introduced)

2nd Session, 59th General Assembly
Nova Scotia
55 Elizabeth II, 2006



Government Bill



Financial Measures Act



The Honourable Michael G. Baker, Q.C.
Minister of Finance



First Reading: May 11, 2006

(Explanatory Notes)

Second Reading:

Third Reading:

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Explanatory Notes

Clause 1 sets out the short title of the Act.

Clause 2 increases the taxable paid-up capital of a trust or loan company whose head office is in the Province from ten million dollars to thirty million dollars.

Clause 3 amends the definition of "eligible investment" in the Equity Tax Credit Act.

Clause 4 gives additional tax credits on shares to investors in community economic-development corporations who have held their shares for certain periods of time.

Clause 5 increases the hold period for shares from four years to five years.

Clause 6 removes the Provincial twenty per cent guarantee for shares issued by a community economic-development corporation after July 1, 2006.

Clause 7 enables the Governor in Council to prescribe, by regulation, the method of calculating penalties for the purpose of subsection 17(1) of the Equity Tax Credit Act.

Clause 8 clarifies that subsection 18A(2) of the Equity Tax Credit Act only applies to Part II of the Act.

Clause 9 clarifies that the shares of a shareholder of a labour-sponsored venture capital corporation will not be considered to have been disposed of in the event of an amalgamation between that corporation and another labour-sponsored venture capital corporation, provided certain criteria are met.

Clause 10 makes a change that is necessary as a result of the change made in Clause 7.

Clause 11 removes from the Highway 104 Western Alignment Act the provision that states that the Highway 104 Western Alignment Corporation is not an agent of Her Majesty in right of the Province.

Clause 12 removes from the Highway 104 Western Alignment Act the provision that states that Her Majesty in right of the Province is not liable for any debt of the Highway 104 Western Alignment Corporation.

Clause 13 makes a change that is necessary as a result of the change made in Clause 11.

Clause 14 implements a tax credit for children under the age of six.

Clause 15 increases, over the next four years the non-refundable tax credits in Section 10 of the Income Tax Act.

Clause 16 harmonizes the calculation of the Nova Scotia medical-expense credit with the calculation of the Federal credit.

Clause 17 increases the amount used in the calculation of the sport and recreational activity tax credit for children from $150 to $500.

Clause 18 increases, over the next four years the non-refundable tax credits in Section 13 of the Income Tax Act.

Clause 19 implements a graduate tax credit.

Clause 20 requires the Governor in Council to make regulations respecting indexing.

Clause 21 limits the equity tax credit that can be claimed in a taxation year to the limit that was in effect for that year.

Clause 22 makes changes to the calculation of the Film Industry Tax Credit for frequent filmers introduced in the 2005 budget to make sure that the tax credit operates as intended.

Clause 23 provides that

(a) no capital cost can be added to the capital cost of a property that qualifies for the manufacturing and processing investment tax credit after the date of the budget; and

(b) the deduction by a corporation for an investment tax credit expires the taxation year for the corporation ending in 2009.

Clauses 24 and 25

(a) correct the calculation of the large corporations tax to remove double reduction in taxes for certain taxation years; and

(b) phase out the large corporations tax by the year 2012.

Clauses 26 and 27 implement an energy tax credit for corporations that pay the large corporation tax.

Clause 28 removes the requirement that the financial statement that the Nova Scotia Film Development Corporation files annually with the Minister include a proposed budget of expenditures for the next fiscal year.

Clause 29 requires that the annual estimates contain an amount relating to the construction and maintenance of highways.

Clause 30 provides that "government business enterprises" and "governmental units" will be those entities designated by regulation.

Clause 31 clarifies the application of Section 21A of the Provincial Finance Act.

Clause 32 amends the provision in the Provincial Finance Act dealing with the approval of financial obligations.

Clause 33 provides that the Minister, on the basis of generally accepted accounting principles, may designate a board, commission, foundation, agency, tribunal, association or body of persons as a government business enterprise or a governmental unit.

Clauses 34 and 35 permit the Minister of Finance to make loans to students enrolled in educational programs designated in the manner provided for in the regulations.

Clause 36 adds the Nova Scotia Pension Agency to the list of Governmental Units in the Schedule to the Provincial Finance Act.

Clause 37 repeals the Schedule to the Provincial Finance Act.

Clauses 38 and 39 amend the definition of "government agency" in Section 10 of the Public Service Act to match a change already made in the Provincial Finance Act and correct an out-dated cross-reference.

Clause 40 amends the definitions in Part I of the Revenue Act.

Clause 41 sets out the tax on diesel oil, biodiesel and biodiesel blend.

Clauses 42 and 43 make changes that are necessary as a result of the changes made in Clauses 40 and 41.

Clause 44 makes a change as a result of the change in the GST rate made by the Federal government.

Clause 45 makes a change that is necessary as the result of the recent Federal budget.

Clauses 46 to 48 make changes that are necessary as a result of the changes made in Clauses 40 and 41.

Clauses 49 and 50

(a) provide that Part IV of the Revenue Act applies to payments to purchasers of an amount referred to in clause 13(1)(d) of the Sales Tax Act; and

(b) enable the Governor in Council to make regulations defining supplies that entitle a purchaser to a payment under clause 13(1)(d) of the Sales Tax Act.

Clauses 51 to 54 change a charge under Section 4A of the Summary Proceedings Act and increase the charges under Sections 8, 8A and 9 to make them consistent with the charges under Section 4A of the Act.

Clause 55 sets out the effective dates for the Act.

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An Act Respecting
Certain Financial Measures

Be it enacted by the Governor and Assembly as follows:

1 This Act may be cited as the Financial Measures (2006) Act.

PART I

CORPORATION CAPITAL TAX ACT

2 Clause 6(2)(d) of Chapter 99 of the Revised Statutes, 1989, the Corporation Capital Tax Act, as amended by Chapter 17 of the Acts of 1993, is further amended by striking out "ten" in the second line and substituting "thirty".

PART II

EQUITY TAX CREDIT ACT

3 Subclause 2(h)(i) of Chapter 3 of the Acts of 1993, the Equity Tax Credit Act, as enacted by Chapter 3 of the Acts of 2001 and amended by Chapter 4 of the Acts of 2003, is further amended by adding "and non-retractable" immediately after "non-redeemable" in the fifth and sixth lines.

4 (1) Section 8 of Chapter 3, as amended by Chapter 2 of the Acts of 1995, Chapter 5 of the Acts of 1996 and Chapter 4 of the Acts of 2000, is further amended by adding immediately after subsection (1) the following subsections:

(2) Section 8 of Chapter 3 is further amended by adding immediately after subsection (2) the following subsections:

5 Subsection 9(2) of Chapter 3 is repealed and the following subsection substituted:

6 Subsection 13A(1) of Chapter 3, as enacted by Chapter 4 of the Acts of 2003, is amended by adding immediately after clause (a) the following clauses:

7 Subsection 17(1A) of Chapter 3, as enacted by Chapter 6 of the Acts of 2005, is amended by striking out "determine the maximum" in the first line and substituting ", by regulation, prescribe the method of calculating the".

8 Subsection 18A(2) of Chapter 3, as enacted by Chapter 5 of the Acts of 1996, is amended by adding "under this Part" immediately after "allowed" in the second line.

9 Chapter 3 is further amended by adding immediately after Section 18A the following Sections:

10 Subsection 27(1) of Chapter 3 is amended by adding immediately after clause (d) the following clause:

PART III

HIGHWAY 104 WESTERN ALIGNMENT ACT

11 Subsection 5(2) of Chapter 4 of the Acts of 1995, the Highway 104 Western Alignment Act, is repealed.

12 Subsection 12(2) of Chapter 4 is repealed.

13 Clause 20(1)(b) of Chapter 4 is repealed.

PART IV

INCOME TAX ACT

14 Section 10 of Chapter 217 of the Revised Statutes, 1989, the Income Tax Act, as amended by Chapter 29 of the Acts of 2000, Chapter 4 of the Acts of 2003 and Chapter 6 of the Acts of 2005, is further amended by adding immediately after subsection (4) the following subsections:

15 Chapter 217 is further amended by adding immediately after Section 10 the following Section:

16 Section 12 of Chapter 217 is repealed and the following Section substituted:

17 Subsection 12A(1) of Chapter 217, as enacted by Chapter 6 of the Acts of 2005, is amended by striking out "$150" in clause (a) of the description of B and substituting "$500".

18 Chapter 217 is further amended by adding immediately after Section 13 the following Section:

19 Chapter 217 is further amended by adding immediately after Section 17 the following Section:

20 Chapter 217 is further amended by adding immediately after Section 22 the following Section:

21 Subsection 37(5) of Chapter 217 is amended by

(a) adding "if, in any taxation year the equity tax credit is carried back, the total equity tax credit deducted from tax otherwise payable does not exceed the amount in clause (2)(b) that was applicable for that taxation year" immediately after "years" in the last line of clause (c); and

(b) adding "if, in any taxation year the equity tax credit is carried forward, the total equity tax credit deducted from tax otherwise payable does not exceed the amount in clause (2)(b) that is applicable for that taxation year" immediately after "years" in the last line of clause (d).

22 (1) Clauses 47(2)(a) and (b) of Chapter 217 are repealed and the following clauses substituted:

(2) Subsection 47(2A) of Chapter 217, as enacted by Chapter 6 of the Acts of 2005, is amended by

(a) striking out "A corporation may be eligible for" in the first line and substituting "A corporation may deduct from tax otherwise payable by the corporation";

(b) striking out "the seven hundred and thirty days" in the third and fourth lines of clause (b) and substituting "twenty-four months prior to the date of the principal photography";

(c) striking out clause (c) and substituting the following clause:

and

(d) striking out "satisfies" in the first line of clause (e) and substituting "and two other eligible films satisfy".

(3) Section 47 of Chapter 217, as amended by Chapter 5 of the Acts of 2002, Chapter 4 of the Acts of 2003 and Chapter 6 of the Acts of 2005, is further amended by adding immediately after subsection (4) the following subsections:

23 (1) Subclause 49(1)(b)(ii) of Chapter 217 is amended by

(a) adding "to no later than the taxation year for the corporation ending December 31, 2009" immediately after "acquisition" in the last line of paragraph (A); and

(b) adding "to no later than the taxation year for the corporation ending December 31, 2009" immediately after "acquisition" in the last line of paragraph (B).

(2) Section 49 of Chapter 217, as amended by Chapter 26 of the Acts of 1993, Chapter 4 of the Acts of 2000 and Chapter 3 of the Acts of 2001, is further amended by adding immediately after subsection (2) the following subsection:

24 (1) Subsection 71(1) of Chapter 217, as enacted by Chapter 6 of the Acts of 2005, is amended by

(a) striking out "three hundred and sixty-five" in the fifth and sixth lines of subclause (a)(i) and the last line of subclauses (a)(ii) to (v) and substituting in each case "the number of days in the taxation year";

(b) striking out ", is of three hundred and sixty-five" in the fifth and sixth lines of subclause (a)(vi) and substituting "but before July 1, 2009, is of the number of days in the taxation year";

(c) striking out "; or" at the end of subclause (a)(vi) and substituting a comma and by adding the following subclauses:

(d) striking out "three hundred and sixty-five" in the fifth and sixth lines of subclause (b)(i) and the last line of subclauses (b)(ii) to (v) and substituting in each case "the number of days in the taxation year";

(e) striking out "and" at the end of subclause (b)(v);

(f) striking out ", is of three hundred and sixty-five." in the fifth and sixth lines of subclause (b)(vi) and substituting "but before July 1, 2009, is of the number of days in the taxation year,"; and

(g) adding immediately after subclause (b)(vi) the following subclauses:

(2) Subsection 71(7) of Chapter 217, as enacted by Chapter 4 of the Acts of 2000 and amended by Chapter 5 of the Acts of 2002, Chapter 4 of the Acts of 2003 and Chapter 6 of the Acts of 2005, is further amended by

(a) striking out "and" in the second line and substituting "or"; and

(b) striking out "2009" in the third and in the sixth lines and substituting in each case "2012".

25 Section 77 of Chapter 217, as enacted by Chapter 4 of the Acts of 2000 and amended by Chapter 5 of the Acts of 2002, Chapter 4 of the Acts of 2003 and Chapter 6 of the Acts of 2005, is further amended by striking out "April 1, 2009" in the last line and substituting "June 30, 2012".

26 Section 78 of Chapter 217 is amended by striking out "Notwithstanding" in the first line and substituting "Subject to Section 78A and notwithstanding".

27 Chapter 217 is further amended by adding immediately after Section 78 the following Section:

PART V

NOVA SCOTIA FILM DEVELOPMENT CORPORATION ACT

28 Section 14 of Chapter 20 of the Acts of 1990, the Nova Scotia Film Development Corporation Act, is amended by striking out "a proposed budget of expenditures for the next fiscal year," in the fifth and sixth lines.

PART VI

PROVINCIAL FINANCE ACT

29 Chapter 365 of the Revised Statutes, 1989, the Provincial Finance Act, is amended by adding immediately after Section 7A the following Section:

30 Subsection 16(1) of Chapter 365, as enacted by Chapter 4 of the Acts of 2000 and amended by Chapter 3 of the Acts of 2004, is further amended by striking out "listed in the Schedule to this Act and any additional entities" in the third and fourth lines.

31 Subsection 21A(1) of Chapter 365, as enacted by Chapter 23 of the Acts of 2005, is amended by adding "but, where the Government of Canada specifies particular purposes for the use of the funds that are different or inconsistent with the purposes set out in this subsection, the Province may use the funds for the particular purposes specified by the Government of Canada" immediately after "education" in the last line.

32 (1) Subsection 59C(1) of Chapter 365, as enacted by Chapter 4 of the Acts of 2000 and amended by Chapter 3 of the Acts of 2004, is further amended by striking out "the recommendation to the Minister setting out the terms and conditions of, the reasons for, and the request for an authorization for the financial obligation and, upon receipt of such recommendation, the Minister shall forward the recommendation to the Governor in Council with a report on the following" in the eleventh, twelfth, thirteenth, fourteenth, fifteenth and sixteenth lines and substituting "a report and recommendation to the Executive Council for the approval of the financial obligation to the Minister setting out the terms and conditions of and the reasons for the financial obligation and, upon receipt of the report and recommendation to the Executive Council, the Minister shall prepare a report on the following".

(2) Section 59C of Chapter 365, as enacted by Chapter 4 of the Acts of 2000, is further amended by adding immediately after subsection (1) the following subsection:

(3) Subsection 59C(2) of Chapter 365, as enacted by Chapter 4 of the Acts of 2000, is amended by striking out "transaction" in the second and in the fourth lines and substituting in each case "obligation".

33 Section 80 of Chapter 365 is repealed and the following Section substituted:

34 Chapter 365 is further amended by adding immediately after Section 83A the following Section:

35 Subsection 84(1) of Chapter 365, as enacted by Chapter 4 of the Acts of 2000, is amended by adding immediately after clause (a) the following clauses:

36 The Schedule to Chapter 365, as enacted by Chapter 6 of the Acts of 2005, is amended by adding "Nova Scotia Pension Agency" immediately after "Nova Scotia Municipal Finance Corporation'" under the heading Governmental Units.

37 The Schedule to Chapter 365 is repealed.

PART VII

PUBLIC SERVICE ACT

38 Clause 10(1)(a) of Chapter 376 of the Revised Statutes, 1989, the Public Service Act, as enacted by Chapter 4 of the Acts of 2001, is amended by striking out "government service organization" in the second line and substituting "governmental unit, other than the Consolidated Fund,".

39 Subclause 17(b)(v) of Chapter 376, as enacted by Chapter 4 of the Acts of 2001, is amended by striking out "government service organization" in the third line and substituting "governmental unit".

PART VIII

REVENUE ACT

40 Section 5 of Chapter 17 of the Acts of 1995-96, the Revenue Act, is repealed and the following Section substituted:

41 Section 8 of Chapter 17 is repealed and the following Section substituted:

42 Section 9 of Chapter 17 is amended by

(a) adding ", biodiesel or biodiesel blend" immediately after "oil" in the first line of clause (a); and

(b) adding ", biodiesel or biodiesel blend" immediately after "oil" in the first line of clause (b).

43 Subsection 12(2) of Chapter 17 is amended by

(a) adding ", biodiesel, biodiesel blend" immediately after "oil" the first time it appears in the second line and in the fifth line of clause (b);

(b) striking out "or diesel oil" in the third and fourth and in the fourth and fifth lines of clause (c) and substituting in each case ", diesel oil, biodiesel or biodiesel blend"; and

(c) adding immediately after clause (c) the following clauses:

44 Section 31B of Chapter 17, as enacted by Chapter 31 of the Acts of 1996, is amended by striking out "fifteen" in the second line and substituting "fourteen".

45 Subclause 32(f)(i) of Chapter 17, as enacted by Chapter 3 of the Acts of 1997, is amended by striking out "seven-fifteenths" in the third line and substituting "six-fourteenths".

46 Subclause 48(g)(i) of Chapter 17 is amended by adding ", biodiesel, biodiesel blend" immediately after "gasoline" in the first line.

47 Section 78A of Chapter 17, as enacted by Chapter 3 of the Acts of 2001, is amended by adding ", biodiesel, biodiesel blend" immediately after "gasoline" in the sixth and in the seventh lines.

48 Subsection 87(2A) of Chapter 17, as enacted by Chapter 4 of the Acts of 2003, is amended by adding ", biodiesel, biodiesel blend" immediately after "gasoline" in the first line.

PART IX

SALES TAX ACT

49 Subsection 13(1) of Chapter 31 of the Acts of 1996, the Sales Tax Act, is amended by adding immediately after clause (f) the following clause:

50 Chapter 31 is further amended by adding immediately after Section 13 the following Section:

PART X

SUMMARY PROCEEDINGS ACT

51 Section 4A of Chapter 450 of the Revised Statutes, 1989, the Summary Proceedings Act, as enacted by Chapter 4 of the Acts of 2000 and amended by Chapter 5 of the Acts of 2001 and Chapter 3 of the Acts of 2004, is further amended by striking out "thirty-one dollars and ninety-five cents" in the last line and substituting "thirty-two dollars".

52 (1) Subsection 8(6) of Chapter 450, as amended by Chapter 4 of the Acts of 2000 and Chapter 5 of the Acts of 2001, is further amended by striking out "dollars or thirty" in the third line and substituting "and seven dollars or thirty-two".

(2) Clause 8(15)(a) of Chapter 450, as amended by Chapter 18 of the Acts of 1994-95, Chapter 4 of the Acts of 2000 and Chapter 5 of the Acts of 2001, is further amended by striking out "dollars or thirty" in the fifth and in the last lines and substituting in each case "and seven dollars or thirty-two".

53 Subsection 8A(7) of Chapter 450 is repealed and the following subsection substituted:

54 Subsection 9(5) of Chapter 450, as amended by Chapter 4 of the Acts of 2000 and Chapter 5 of the Acts of 2001, is further amended by striking out "dollars or thirty" in the second line and substituting "and seven dollars or thirty-two".

PART XI

EFFECTIVE DATES

55 (1) This Act, except Sections 2, 8, 9, 16, 17 and 19, subsections 22(2) and (3), Section 23 and clauses 24(1)(a), (b) and (d), comes into force on such day as the Governor in Council orders and declares by proclamation.

(2) Section 2 has effect on and after January 1, 2001, upon the Governor in Council so ordering by proclamation.

(3) Section 16 has effect on and after January 1, 2004, upon the Governor in Council so ordering by proclamation.

(4) Subsections 22(2) and (3) have effect on and after January 1, 2005, upon the Governor in Council so ordering by proclamation.

(5) Clauses 24(1)(a), (b) and (d) have effect on and after April 26, 2005, upon the Governor in Council so ordering by proclamation.

(6) Sections 8, 9, 17 and 19 have effect on and after January 1, 2006, upon the Governor in Council so ordering by proclamation.

(7) Section 23 has effect on and after May 9, 2006, upon the Governor in Council so ordering by proclamation.

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This page and its contents published by the Office of the Legislative Counsel, Nova Scotia House of Assembly, and © 2006 Crown in right of Nova Scotia. Updated June 2, 2006. Send comments to legc.office@gov.ns.ca.