BILL C-70 - First Reading

	(iv) all amounts (other than input tax credits and amounts referred to in subparagraphs (i) and (ii)) in respect of tax referred to in subparagraphs (iii) and (iv) of the description of A that the person would have been entitled to recover by way of rebate, refund, remission or otherwise un der this or any other Act or law if that tax had been payable and the property or improvement had been acquired for use exclusively in acti vities that are not commercial acti vities, and
	C is the lesser of 1 and the fraction
	H/I
	where
	H is the fair market value of the property at the particular time, and
	I is the total of
	(i) the value of the consideration for the last supply to the person of the property or, where the property was last imported by the person, the value of the property determined under section 215, and
	(ii) where the person acquired or imported improvements to the prop erty after the property was last so acquired or imported, the total of all amounts each of which is the value of the consideration for a supply to the person of such an improvement or, where such an improvement is property that was imported or brought into a participating prov ince by the person, the value of the property determined under section 215 or subsection 220.05(1), 220.06(1) or 220.07(3), as the case may require, and
	(b) where the person brought the property into a participating province from a non-participating province for consump tion, use or supply in the participating province in circumstances in which the person was required to pay tax in respect of the property under section 220.05, or would have been required to pay that tax but for the fact that the property was brought into that province for consump tion, use or supply exclusively in com mercial activities or the person was exempt from paying that tax under any other Act or law, the amount determined by the formula
	(J - K) x L
	where
	J is the total of
	(i) the basic tax content of the property, determined under para graph (a), immediately before the property was brought into the prov ince,
	(ii) the tax that became payable by the person in respect of the property under section 220.05 when the prop erty was brought into the participat ing province,
	(iii) the tax that was payable by the person in respect of improvements to the property acquired, imported or brought into a participating prov ince by the person after the property was brought into the participating province,
	(iv) the tax that would, but for subsection 153(4) or section 167, have been payable by the person in respect of improvements to the property acquired by the person after the property was brought into the participating province,
	(v) the tax under section 220.05 that would have become payable by the person in respect of the property, and the tax under any of sections 218 and 218.1 and Division IV.1 that would have become payable by the person in respect of improvements to the property acquired, imported or brought into a participating prov ince by the person after the property was brought into the participating province, but for the fact that the person brought the property into the participating province, or acquired or imported the improvement or brought it into the province, as the case may be, for consumption, use or supply exclusively in the course of commercial activities of the per son, and
	(vi) all amounts determined by the formula
	M x N x O/P
	where
	M is an amount of tax (other than tax that the person was exempt from paying under any other Act or law) under subsection 165(1) or section 212 or 218 referred to in sub paragraph (iii) or (iv) of the description of J that became payable, or would have become payable in the circumstances described in that subparagraph, by the person after the property was brought into the participating province and while the person was a selected listed fi nancial institution,
	N is the person's prescribed per centage for a participating province for the person's taxation year that includes the time that amount so became payable, or would have so become payable,
	O is that province's tax rate, and
	P is 7%,
	K is the total of
	(i) all tax referred to in subpara graphs (ii) to (v) of the description of J that the person was exempt from paying under any other Act or law,
	(ii) all tax (other than tax referred to in subparagraph (i)) under subsec tion 165(2) and section 212.1 re ferred to in any of subparagraphs (ii) to (v) of the description of J that became payable by the person, or would have become payable by the person in the circumstances de scribed in that subparagraph, while the person was a selected listed financial institution,
	(iii) all amounts (other than input tax credits and amounts referred to in subparagraphs (i) and (ii)) in respect of tax referred to in subpara graphs (ii) and (iii) of the descrip tion of J that the person was entitled to recover by way of rebate, refund, remission or otherwise under this or any other Act or law or would have been entitled to so recover if the property or improvement had been acquired for use exclusively in acti vities that are not commercial acti vities, and
	(iv) all amounts (other than input tax credits and amounts referred to in subparagraphs (i) and (ii)) in respect of tax referred to in subparagraphs (iv) and (v) of the description of J that the person would have been entitled to recover by way of rebate, refund, remission or otherwise un der this or any other Act or law if that tax had been payable and the property or improvement had been acquired for use exclusively in acti vities that are not commercial acti vities, and
	L is lesser of 1 and the fraction
	Q/R
	where
	Q is the fair market value of the property at the particular time, and
	R is the total of
	(i) the value of the property determined under subsection 220.05(1), 220.06(1) or 220.07(3), as the case may re quire, at the time the property was brought into the participating province, and
	(ii) where the person acquired or imported improvements to the property after the property was brought into the participating province, the total of all amounts each of which is the value of the consideration for a supply to the person of such an improvement or, where such an improvement is property that was imported or brought into a participating prov ince by the person, the value of the improvement determined un der section 215 or subsection 220.05(1), 220.06(1) or 220.07(3), as the case may re quire;
``non- participating province'' « province non participan- te »	``non-participating province'' means
	(a) a province that is not a participating province, or
	(b) another area in Canada that is outside the participating provinces;
``participating province'' « province participan- te »	``participating province'' means a province referred to in Schedule VIII;
``selected listed financial institution'' « institution financière désignée particuliè- re »	``selected listed financial institution'' means, at any time, a listed financial institution who is at that time a selected listed financial institution under subsection 225.2(1);
``specified motor vehicle'' « véhicule à moteur déterminé »	``specified motor vehicle'' means
	(a) goods that are or would, if they were imported, be classified under any of tariff item 8701.20.00, subheading Nos. 8701.30 and 8701.90, heading No. 87.02, tariff item 8703.10.10, subheading Nos. 8703.21 to 8703.90 and 8704.21 to 8704.90, heading 87.05, tariff items 8711.20.00 to 8711.90.00 and 8713.90.00, 8716.10.21, 8716.10.29 and 8716.39.30 to 8716.40.00 and subhead ing No. 8716.80 of Schedule I to the Customs Tariff, other than racing cars classified under heading No. 87.03 of that Schedule and prescribed motor ve hicles, and
	(b) prescribed motor vehicles;
``tax rate'' « taux de taxe »	``tax rate'', for or in relation to a participating province, means the rate set opposite the name of the province in Schedule VIII;
	(7) Subsection 123(4) of the Act is re placed by the following:
Application of provisions to schedules	(4) Any provision of this Part that applies for the purposes of this Part also applies for the purposes of Schedules V to X .
	(8) Subsections (1) to (7) come into force on April 1, 1997.
	151. (1) Paragraph 129(6)(b) of the Act is replaced by the following:
	(b) except where the supply is an exempt supply, to have collected, immediately before that time, tax in respect of the supply equal to the basic tax content of the property immediately before that time.
	(2) Subsection (1) applies to supplies made on or after April 1, 1997.
	152. (1) Paragraph 129.1(2)(a) of the Act is replaced by the following:
	(a) is in respect of property (other than capital property or improvements thereto) acquired, imported or brought into a partici pating province by the body for the purpose of consumption, use or supply in the course of activities engaged in by the body through a small supplier division of the body; or
	(2) Subsection 129.1(3) of the Act is repealed.
	(3) The portion of subsection 129.1(4) of the Act after paragraph (b) is replaced by the following:

	except where subsection 129(6) or 171(3) ap plies, the body is deemed to have made, im mediately before that time, a supply of the property and, except where the supply is an exempt supply, to have collected, immediate ly before that time, tax in respect of the supply equal to the basic tax content of the property immediately before that time.
	(4) The portion of subsection 129.1(5) of the Act after paragraph (c) is replaced by the following:

	except where subsection 171(1) applies, for the purpose of determining an input tax credit of the body, it is deemed to have received a supply of the property and to have paid, at that time, tax in respect of the supply equal to the amount determined by the formula
	A x B
	where
	A is the basic tax content of the property at that time, and
	B is the extent to which the property was held by the body immediately before that time for consumption, use or supply in the course of activities engaged in by the body through the small supplier divisions.
	(5) Subsections (1) and (2) come into force on April 1, 1997.
	(6) Subsection (3) applies to supplies made on or after April 1, 1997.
	(7) Subsection (4) applies to supplies received on or after April 1, 1997.
	153. (1) The Act is amended by adding the following after section 132:
Person resident in a province	132.1 (1) For the purposes of this Part, other than determining the place of residence of an individual in the individual's capacity as a consumer, a person is deemed to be resident in a province if the person is resident in Canada and
	(a) in the case of a corporation, the corpora tion is incorporated or continued under the laws of that province and not continued elsewhere;
	(b) in the case of a partnership, an unincor porated society, a club, an association or an organization, or a branch thereof, the mem ber, or a majority of the members, having management and control thereof is or are resident in that province;
	(c) in the case of a labour union, it is carrying on activities as such in that prov ince and has a local union or branch in that province; or
	(d) in any case, the person has a permanent establishment in that province.
Meaning of ``permanent establish- ment''	(2) In this section and Schedule IX, ``per manent establishment'' of a person means
	(a) in the case of an individual, the estate of a deceased individual or a trust that carries on a business (within the meaning assigned by subsection 248(1) of the Income Tax Act), a permanent establishment (as defined for the purposes of Part XXVI of the Income Tax Regulations) of the person;
	(b) in the case of a corporation that carries on a business (within the meaning assigned by subsection 248(1) of that Act), a perma nent establishment (as defined for the purposes of Part IV of those Regulations) of the person;
	(c) in the case of a particular partnership
	(i) a permanent establishment (as defined for the purposes of Part XXVI of the those Regulations) of a member that is an individual, the estate of a deceased individual or a trust where the establish ment relates to a business (within the meaning assigned by subsection 248(1) of that Act) carried on through the partnership,
	(ii) a permanent establishment (as de fined for the purposes of Part IV of those Regulations) of a member that is a corporation where the establishment re lates to a business (within the meaning assigned by subsection 248(1) of that Act) carried on by the particular partner ship, or
	(iii) a permanent establishment (within the meaning of this subsection) of a member that is a partnership where the establishment relates to a business (with in the meaning assigned by subsection 248(1) of that Act) carried on by the particular partnership;
	(d) in any other case, a place that would be a permanent establishment (as defined for the purposes of Part IV of those Regula tions) of the person if the person were a corporation and its activities were a busi ness for purposes of that Act; and
	(e) an office for the purchase of merchan dise.
	(2) Subsection (1) comes into force on April 1, 1997.
	154. (1) Subsection 136(2.1) of the Act is repealed.
	(2) Subsection (1) comes into force on April 1, 1997.
	155. (1) The Act is amended by adding the following after section 136:
Lease, etc. of property	136.1 (1) For the purposes of this Part, where a supply of property is made by way of lease, licence or similar arrangement to a person for consideration that includes a pay ment that is attributable to a period (in this subsection referred to as the ``lease interval'') that is the whole or a part of the period during which possession or use of the property is provided under the arrangement,