(5) Paragraph 259(4.1)(d) of the Act, as enacted by subsection 69(7), is replaced by the following:

    (d) the amount that would be determined by the formula in subsection (4) if that subsec tion applied to the person and if

      (i) the reference therein to ``prescribed percentage'' were read as a reference to ``the prescribed percentage applicable to a selected public service body described in whichever of paragraphs (a) to (e) of the definition of that expression in sub section (1) applies to the person minus 50%'', and

      (ii) in the case of a person who is not designated to be a municipality for the purposes of this section, the reference in that formula to ``designated activities'' were read as a reference to

        (A) in the case of a person determined to be a municipality under paragraph (b) of the definition ``municipality'' in subsection 123(1), activities engaged in by the person in the course of fulfilling the person's responsibilities as a local authority, and

        (B) in any other case, activities en gaged in by the person in the course of operating a recognized degree-grant ing institution, a college affiliated with, or research body of, such an institution, a public hospital, an ele mentary or secondary school or a post-secondary college or technical institute, as the case may be.

(6) Section 259 of the Act, as amended by section 69, is amended by adding the following after subsection (4.1):

Rebates in respect of tax in participating provinces

(4.2) In determining a rebate under this section payable to a person (other than a person to whom subsection (4.3) applies), no tax under any of subsection 165(2), sections 212.1 and 218.1 and Division IV.1 payable or deemed to have been paid or collected by the person shall be included

    (a) in any amount referred to in any of subparagraphs (a)(i) to (iv) of the definition ``non-creditable tax charged'' in subsection (1),

    (b) in any amount referred to in subpara graph (v) of that definition that is required under subsection 129(7) to be added in determining the body's net tax, or

    (c) in determining any amount referred to in subparagraph (v) of that definition that is an input tax credit required under paragraph 171(4)(b) to be added in determining the body's net tax,

unless the person is a

    (d) charity or qualifying non-profit orga nization resident in a participating prov ince,

    (e) selected public service body resident in Nova Scotia, or

    (f) a municipality resident in New Bruns wick.

Rebate to qualifying non-profit organization in Newfoundlan d

(4.3) Where a rebate under this section is payable to a qualifying non-profit organiza tion that is resident in Newfoundland and designated by the Minister to be a municipali ty for the purposes of this section, the amount of the rebate is equal to the total of

    (a) the amount of the rebate that would be determined if subsection (4.2) applied to the organization, and

    (b) the amount that would be determined by the formula in subsection (4) if the percent age prescribed for the purposes of that subsection were 50%, if the reference to ``designated activities'' in the description of C in the formula were a reference to ``activities of the person that are not designated activities'' and if no tax under any of subsection 165(1) and sections 212 and 218 were included in

      (i) any amount referred to in any of subparagraphs (a)(i) to (iv) of the defini tion ``non-creditable tax charged'' in subsection (1),

      (ii) in any amount referred to in subpara graph (v) of that definition that is re quired under subsection 129(7) to be added in determining the organization's net tax, and

      (iii) in determining any amount referred to in subparagraph (v) of that definition that is an input tax credit required under paragraph 171(4)(b) to be added in determining the organization's net tax.

(7) Subsections (1) to (6) come into force on April 1, 1997.

229. (1) Section 259.1 of Act, as enacted by subsection 69.1(1), is amended by adding the following after subsection (5):

No adjustment of provincial component of tax

(6) No amount of tax under subsection 165(2) in respect of a supply of property referred to in subsection 259.1(2) shall be included in the amount that may be deducted or that is required to be added, as the case may be, under section 231 or 232 in determining the net tax of the person for any reporting period of the person.

(2) Subsection (1) comes into force on April 1, 1997.

230. (1) The Act is amended by adding the following after section 261:

Rebate in respect of goods removed from a participating province

261.1 (1) Where

    (a) a supply by way of sale of property that is tangible personal property (other than property included in any of paragraphs 252(1)(a) to (c)), a mobile home or a floating home is made in a particular participating province to a person (other than a selected listed financial institution) who is resident in Canada and who, in the case of property other than a specified motor vehicle, is not a consumer resident in a participating province,

    (b) the property is acquired for consump tion, use or supply exclusively outside the participating provinces,

    (c) the person removes the property from the particular participating province to a non-participating province within thirty days after it is delivered to the person, and

    (d) the person pays all taxes, if any, payable by the person in respect of the property under Acts of the legislature of the province that are prescribed for the purposes of section 154,

the Minister shall, subject to section 261.4, pay a rebate to the person equal to the tax paid under subsection 165(2) by the person in re spect of the supply.

Stored goods

(2) For the purposes of subsection (1), where a person places property in storage after it is delivered to the person in a participating province, the period during which the person holds the property in storage shall not be taken into account in determining whether the person removes the property from the prov ince within thirty days after delivery.

Rebate in respect of goods imported at a place in a non-
participating province

261.2 Where

    (a) a person (other than a selected listed financial institution) who is resident in a participating province pays tax under sub section 212.1(2) in respect of property that the person imports at a place in a non-partic ipating province,

    (b) the property is not imported for con sumption or use in any participating prov ince, and

    (c) the person pays all taxes, if any, payable by the person in respect of the property that are imposed under Acts of the legislatures of non-participating provinces and that are prescribed for the purposes of section 154,

the Minister shall, subject to section 261.4, pay a rebate to the person equal to the amount of the tax under subsection 212.1(2) paid by the person.

Rebate in respect of intangible personal property or services supplied in a participating province

261.3 Where a person (other than a selected listed financial institution) who is resident in Canada is the recipient of a supply of intangi ble personal property or a service that is acquired by the person for consumption, use or supply primarily outside the participating provinces and tax under subsection 165(2) is payable in respect of the supply, the Minister shall, subject to section 261.4, pay a rebate to the person equal to the amount determined by the formula 

                              A x B

where

A is the amount of the tax payable; and

B is the extent (expressed as a percentage) to which the intangible personal property or service is acquired by the person for con sumption, use or supply outside the partici pating provinces.

Restriction

261.4 A rebate shall not be paid under any of sections 261.1 to 261.3 unless

    (a) the person files an application for the rebate within one year after

      (i) in the case of a rebate under section 261.1 in respect of property supplied in a participating province, the day the person removes the property from the participat ing province, and

      (ii) in the case of a rebate under section 261.2 or 261.3 in respect of tax payable by the person, the day that tax became payable;

    (b) except where the application is a prescribed application, where the person is an individual, the individual has not made another application under this section in the calendar quarter in which the application is made;

    (c) where the person is not an individual, the person has not made another application under this section in the calendar month in which the application is made;

    (d) in the case of a rebate under section 261.1 or 261.3, each receipt that substanti ates the rebate includes tax paid under subsection 165(2), totalling at least $4, in respect of supplies that are otherwise eligi ble for a rebate under that section; and

    (e) the total of all rebates for which the application is made is at least $16.

(2) Subsection (1) comes into force on April 1, 1997.

1993, c. 27, s. 118(1)

231. (1) The portion of section 263 of the Act before paragraph (a) is replaced by the following:

Restriction on rebate

263. A rebate of an amount under subsec tion 215.1(1) or (2) or 216(6) or any of sections 252 to 261.3 or a refund of an amount that, because of subsection 215.1(3) or 216(7), is payable under section 69, 73, 74 or 76 of the Customs Act, shall not be paid to a person to the extent that it can reasonably be regarded that

(2) Subsection (1) comes into force on April 1, 1997.

232. (1) Section 269 of the Act, as enacted by subsection 73(1), is replaced by the following:

Distribution by trust

269. For the purposes of this Part, where a trustee of a trust distributes property of the trust to one or more persons, the distribution of the property is deemed to be a supply of the property made by the trust at the place at which the property is delivered or made available to the persons and for consideration equal to the amount determined under the Income Tax Act to be the proceeds of disposi tion of the property.

(2) Subsection (1) comes into force on April 1, 1997.

233. (1) Paragraph 272.1(2)(a) of the Act, as enacted by subsection 76(1), is replaced by the following:

    (a) except as otherwise provided in subsec tion 175(1), the partnership is deemed

      (i) not to have acquired or imported the property or service, and

      (ii) where the property was brought by the member from a non-participating province into a participating province, not to have so brought it into that province;

(2) Subsection (1) comes into force on April 1, 1997.

1993, c. 27, s. 124(1)

234. (1) Paragraph 273(1)(a) of the Act is replaced by the following:

    (a) all properties and services that are, during the period the election is in effect, supplied, acquired, imported or brought into a participating province under the agreement by the operator on behalf of the co-venturer in the course of the activities for which the agreement was entered into shall, for the purposes of this Part, be deemed to be supplied, acquired, imported or brought into the province , as the case may be, by the operator and not by the co-venturer;

1993, c. 27, s. 124(1)

(2) Subsection 273(1.1) of the Act is replaced by the following:

Exception

(1.1) Paragraph (1)(a) does not apply to the acquisition, importation or bringing into a participating province of property or a service by an operator on behalf of a co-venturer where the property or service is so acquired, imported or brought into the province for consumption, use or supply in the course of activities that are not commercial activities and the operator

    (a) is a government other than a specified Crown agent; or

    (b) would not be required, because of an Act of Parliament other than this Act, to pay tax in respect of the acquisition, importation or bringing into the province of the property or service if the operator acquired or, imported the property or service or brought it into the province for that purpose otherwise than on behalf of the co-venturer.

(3) Subsections (1) and (2) come into force on April 1, 1997.

235. The Act is amended by adding the following after section 277:

Definition of ``harmonized tax system''

277.1 (1) In this section, ``harmonized tax system'' means the system established under this Part for the payment, collection and remittance of tax imposed under subsection 165(2) and sections 212.1, 218.1, 220.05, 220.06, 220.07 and 220.08 and of allowing input tax credits, rebates and refunds in respect of any such tax paid or deemed to be paid.

Temporary regulations

(2) For the purpose of facilitating the administration and enforcement of the harmo nized tax system or the transition to the harmonized tax system, the Governor in Council may, at any time before May 1999, make regulations

    (a) adapting any provision of this Part or of the regulations made under section 277 to the harmonized tax system or modifying any provision of this Part or those regula tions to adapt it to the harmonized tax system;

    (b) defining, for the purposes of this Part or the regulations made under section 277, or any provision of this Part or those regula tions, in its application to the harmonized tax system, words or expressions used in this Part, including words or expressions defined in a provision of this Part;

    (c) providing that a provision of this Part or of the regulations made under section 277, or a part of such a provision does not apply to the harmonized tax system; and

    (d) prescribing, determining or regulating for the purposes only of the harmonized tax system, or for the purposes of this Part other than the harmonized tax system, anything that by this Part is to be prescribed or is to be determined or regulated by regulation.

Retroactivity

(3) Notwithstanding subsection 277(2), a regulation made under this section may be made to be effective on a day that is before the day it is made but not before April 1, 1997, or made to apply to supplies that were made before the day the regulation was made.

Cessation of regulation

(4) Every regulation made under this sec tion, other than a regulation made under paragraph (2)(d), ceases to have effect, and is deemed to be repealed, on May 1, 2000.

236. (1) Section 280 of the Act is amended by adding the following after subsection (1):

Penalty and interest on net tax of selected listed financial institutions

(1.1) Notwithstanding subsection (1), where a selected listed financial institution that is required to pay an amount under paragraph 228(2.1)(a) on account of the financial institution's net tax for a reporting period fails to pay all of that amount within the time specified in that paragraph, the financial institution shall pay, on the amount not paid,

    (a) a penalty of 6% per year, and

    (b) interest at the prescribed rate,

computed for the period beginning on the first day following that time and ending on the ear lier of

    (c) the day the total of the amount, penalty and interest is paid, and

    (d) the day on or before which the financial institution is required under subsection 238(2.1) to file a final return for that reporting period.

(2) Section 280 of the Act is amended by adding the following after subsection (4):

Unpaid penalty and interest

(4.01) Where a selected listed financial institution is required to pay a penalty or interest under subsection (1.1) in respect of an amount required under paragraph 228(2.1)(a) to be paid within the time specified in that paragraph and the penalty or interest, as the case may be, has not been paid on or before the day on or before which the financial institu tion is required under subsection 238(2.1) to file a final return for that reporting period, the penalty or interest, as the case may be, is deemed, for the purposes of this Part, to be an amount required to be remitted by the finan cial institution or before that day that has not been remitted on or before that day.