Bill C-28

Transmission of Oil or Gas

13.14 (1) Subject to any exemptions or conditions that the National Energy Board may establish, a holder operating a pipeline for the transmission of oil shall, according to its powers, without delay and with due care and diligence, receive, transport and deliver all oil and any other substance, including water, incidental to the drilling for or production of oil offered for transmission by means of its pipeline.

(2) The National Energy Board may, by order, on any terms and conditions that it may specify in the order, require a holder operating a pipeline for the transmission of gas to receive, transport and deliver, according to its powers, gas and any other substance, including water, incidental to the drilling for or production of gas offered for transmission by means of its pipeline.

(3) If the National Energy Board finds that no undue burden will be placed on the holder by requiring the holder to do so and if it considers it necessary or desirable to do so in the public interest, the Board may require a holder operating a pipeline for the transmission of oil or gas to provide adequate and suitable facilities for

(a) the receipt, transmission and delivery of the oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas offered for transmission by means of its pipeline;

(b) the storage of the oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas; and

(c) the junction of its pipeline with other facilities for the transmission of the oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas.

Transmission and Sale of Gas

13.15 (1) If the National Energy Board considers it necessary or desirable to do so in the public interest, it may direct a holder operating a pipeline for the transmission of gas to extend or improve its transmission facilities to provide facilities for the junction of its pipeline with any facilities of, and sell gas to, any person or municipality engaged or legally authorized to engage in the local distribution of gas to the public, and for those purposes to construct branch lines to communities immediately adjacent to its pipeline, if the Board finds that to do so will not place an undue burden on the holder.

(2) Subsection (1) does not empower the National Energy Board to compel a holder to sell gas to additional customers if to do so would impair its ability to render adequate service to its existing customers.

13.16 A holder may, for the purposes of its undertaking and subject to the provisions of this Act, transmit oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas by pipeline and regulate the time and manner in which it shall be transmitted and the tolls to be charged for the transmission.

Regulations

13.17 The Governor in Council may make regulations for the purposes of this Part, designating as oil or gas any substance resulting from the processing or refining of hydrocarbons or coal if that substance

(a) is asphalt or a lubricant; or

(b) is a suitable source of energy by itself or when it is combined or used in association with something else.

Consequential Amendments

Canada Petroleum Resources Act

151. Subsection 101(2) of the Canada Petroleum Resources Act is replaced by the following:

(2) Subject to this section, information or documentation is privileged if it is provided for the purposes of this Act or the Canada Oil and Gas Operations Act, other than Part 0.1 of that Act, or any regulation made under either Act, or for the purposes of Part II.1 of the National Energy Board Act, whether or not the information or documentation is required to be provided.

National Energy Board Act

152. Section 18 of the English version of the National Energy Board Act is replaced by the following:

18. Where the Board may make or issue any order or direction or prescribe any terms or conditions or do any other thing in relation to any person, the Board may do so, either generally or in any particular case or class of cases.

153. Paragraph 25(b) of the Act is replaced by the following:

(b) a document purporting to be certified by the Secretary, or by any other person authorized by the Board to certify documents for the purposes of this section, and sealed with the seal of the Board stating that a valid and subsisting document of authorization has or has not been issued by the Board to a person or persons named in the certified document, is evidence of the facts stated in it, without proof of the signature or official character of the person appearing to have signed the document and without further proof.

PART 10

AMENDMENTS TO THE FARM INCOME PROTECTION ACT

154. (1) The definition “agreement” in section 2 of the Farm Income Protection Act is replaced by the following:

“agreement”, unless the context indicates otherwise, means an agreement entered into under subsection 4(1);

(2) Section 2 of the Act is amended by adding the following in alphabetical order:

“financial institution” has the same meaning as in section 2 of the Bank Act;

155. Paragraph 8(2)(b) of the Act is replaced by the following:

(b) Fund No. 2, to which shall be credited all amounts paid in respect of that producer by Canada or a province.

156. The heading “CAISSES ET COMPTE” before section 13 of the French version of the Act is replaced by the following:

157. The heading before section 15 of the Act is replaced by the following:

Net Income Stabilization Account in the Accounts of Canada

158. Subsection 15(1) of the Act is replaced by the following:

15. (1) If an agreement that provides for the establishment and administration by the Government of Canada of a net income stabilization account program in respect of an agricultural product or class of agricultural products indicates that the accounts of producers participating in the program are to be in the accounts of Canada, there shall be established in the accounts of Canada a Net Income Stabilization Account.

159. The Act is amended by adding the following after section 15:

Net Income Stabilization Accounts in Financial Institutions

15.1 (1) If an agreement that provides for the establishment of a net income stabilization account program in respect of an agricultural product or class of agricultural products indicates that the accounts of producers participating in the program are to be in financial institutions, the Minister may enter into an agreement with one or more financial institutions to provide for their holding of Net Income Stabilization Accounts of producers participating in the program.

(2) An agreement with a financial institution must set the terms and conditions required for the holding of Net Income Stabilization Accounts including, but not limited to, the prescribed terms and conditions and the following terms and conditions:

(a) the financial institution may hold only one Net Income Stabilization Account in respect of any particular producer; and

(b) the financial institution may permit withdrawals to be made from a Net Income Stabilization Account only as provided for in the agreement.

(3) In addition to the terms and conditions required by subsection (2), an agreement with a financial institution must provide for

(a) the nature of the investments that may be held in a Net Income Stabilization Account;

(b) the account transactions that the financial institution must perform in accordance with the agreement;

(c) the information that must be submitted to the Minister by the financial institution in the periods specified in the agreement;

(d) the Minister’s right of access to and right to audit any records held by the financial institution that contain information relating to the Net Income Stabilization Accounts held by it and the manner in which those rights are to be exercised;

(e) the penalties that may be imposed if the financial institution does not comply with the agreement;

(f) the terms and conditions respecting the amendment, termination or expiry of the agreement; and

(g) the manner of transferring Net Income Stabilization Accounts held by the financial institution on the termination or expiry of the agreement.

(4) A particular producer may hold only one Net Income Stabilization Account at financial institutions at any time in respect of the program to which the Account relates.

(5) A financial institution that holds a Net Income Stabilization Account of a particular producer shall, on the direction of the Minister, pay from the Account to Her Majesty in right of Canada or in right of a province

(a) any amount that is owing by the producer in respect of amounts paid into the Account in excess of the producer’s entitlement under the program to which the Account relates or any other program established under this Act;

(b) any administrative fees or penalties under the program to which the Account relates or any other program in respect of which amounts were paid into the Account; or

(c) all or part of any other amount that is owing by the producer to Her Majesty.

(6) Except for the purposes of the Agricultural Marketing Programs Act, an amount in a Net Income Stabilization Account of a producer may not be assigned or given as security, and any transaction that purports to do so is void to that extent.

(7) An amount in a Net Income Stabilization Account of a producer is exempt from attachment, seizure and execution, except in the case of a producer who has the status of a bankrupt, or if the attachment, seizure or execution is for the purpose of satisfying the provisions of an agreement or court order relating to separation or divorce that provides for the division of the Account into separate Net Income Stabilization Accounts.

160. Subsection 16(1) of the French version of the Act is replaced by the following:

PART 11

FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS

Amendments to the Federal-Provincial Fiscal Arrangements Act

161. The description of D in the definition “total per capita fiscal capacity” in subsection 3.5(1) of the Federal-Provincial Fiscal Arrangements Act is replaced by the following:

D      is, with respect to Newfoundland and Labrador, any amount that may be paid to that province for that fiscal year under Part V of the Canada-Newfoundland Atlantic Accord Implementation Act;

162. Section 3.7 of the Act is amended by adding the following after subsection (3):

(3.1) Nova Scotia is deemed, on the day on which this subsection comes into force, to have made the election under subsection (3) in respect of the fiscal year beginning on April 1, 2008.

163. The Act is amended by adding the following after section 3.7:

3.71 (1) If a province makes the election under subsection 3.7(3), an additional fiscal equalization payment for the period referred to in subsection (3) may be paid to that province equal to the amount by which

(a) the aggregate of the following amounts:

(i) the aggregate of the fiscal equalization amounts computed under section 3.72 for that province for all fiscal years in the period,

(ii) the aggregate of the amounts that would be paid to that province for all fiscal years in the period in accordance with sections 7 to 14 and 21 to 28 of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act as that Act read on April 1, 2007, computed as if the fiscal equalization payment for that province for each fiscal year in the period were equal to the fiscal equalization amount computed under section 3.72 for that province for that fiscal year, and

(iii) subject to subsection (2), the aggregate of the amounts, with respect to Newfoundland and Labrador, that would be paid to that province for all fiscal years in the period under Part V of the Canada-Newfoundland Atlantic Accord Implementation Act, as that Act read on April 1, 2007, computed as if the fiscal equalization payment for that province for each fiscal year in the period were equal to the fiscal equalization amount computed under section 3.72 for that province for that fiscal year, and computed in accordance with subsection 174(3) of the Budget and Economic Statement Implementation Act, 2007 if the conditions described in that subsection are met,

is greater than

(b) the aggregate of the following amounts:

(i) the aggregate of the fiscal equalization payments paid to that province for the period,

(ii) the aggregate of the amounts paid to that province for the period in accordance with sections 7 to 14 and 21 to 28 of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act, and

(iii) the aggregate of the amounts, with respect to Newfoundland and Labrador, paid to that province for the period under Part V of the Canada-Newfoundland Atlantic Accord Implementation Act.

(2) For each fiscal year for which subsection 3.72(4) applies to Newfoundland and Labrador by reason of paragraph 3.72(6)(a), the amount that would be paid to that province under Part V of the Canada-Newfoundland Atlantic Accord Implementation Act is deemed to be zero for the purpose of subparagraph (1)(a)(iii).

(3) For the purpose of subsection (1), “period” means the period beginning on April 1 of the first fiscal year in respect of which the province makes the election under subsection 3.7(3) and ending on the earlier of

(a) in the case of

(i) Nova Scotia, March 31 of the fiscal year preceding the first fiscal year with respect to which it does not meet the conditions under paragraphs 12(1)(a) and (b) of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act and is not receiving any transitional payments under section 14 of that Act, and

(ii) Newfoundland and Labrador, March 31 of the fiscal year preceding the first fiscal year with respect to which it does not meet the conditions under paragraphs 26(1)(a) and (b) of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act and is not receiving any transitional payments under section 28 of that Act, and

(b) March 31, 2020.

3.72 (1) For the purpose of this section and section 3.71, the fiscal equalization amount for a province for a fiscal year is the average of

(a) the greater of zero and the amount determined by the formula

(A - B) × C

where

A      is the per capita equalization standard for that fiscal year,

B      is the aggregate of the average annual per capita yield in that province for each revenue source for that fiscal year, and

C      is the average annual population of that province for that fiscal year, and

(b) the amount determined by the formula

D × [(E - F) × G] / H

where

D      is

(a) for the fiscal year beginning on April 1, 2006, the product obtained by multiplying $10,900,000,000 by 1.035, and

(b) for each subsequent fiscal year, the product obtained by multiplying the amount computed for the immediately preceding fiscal year by 1.035,

E      is the five-province per capita equalization standard for that fiscal year determined under subsection (3),

F      is the aggregate of the average annual per capita yield in that province for each revenue source for that fiscal year,

G      is the average annual population of that province for that fiscal year, and

H      is the aggregate of the amount for each of the provinces determined by the formula

(I - J) × K

where

I      is the five-province per capita equalization standard for that fiscal year determined under subsection (3),

J      is the aggregate of the average annual per capita yield in the province for each revenue source for that fiscal year, and

K      is the average annual population of the province for that fiscal year.

(2) For the purposes of paragraph (1)(a), the Minister shall determine the per capita equalization standard for a fiscal year by computing the fiscal equalization amount for each province for that fiscal year in the manner described in that paragraph and shall, in making that determination, ensure that

(a) the amount determined by the following formula would be the same with respect to every province for which a fiscal equalization amount is greater than zero:

A + (B / C)

where

A      is the aggregate of the average annual per capita yield in that province for each revenue source for that fiscal year,

B      is the fiscal equalization amount for that province for that fiscal year, and

C      is the average annual population of that province for that fiscal year; and

(b) the aggregate of the fiscal equalization amounts for all provinces for which the fiscal equalization amount is greater than zero for that fiscal year would be equal to

(i) for the fiscal year beginning on April 1, 2006, the product obtained by multiplying $10,900,000,000 by 1.035, and

(ii) for each subsequent fiscal year, the product obtained by multiplying the amount computed for the immediately preceding fiscal year by 1.035.

(3) For the purposes of paragraph (1)(b),

(a) the five-province per capita equalization standard for a fiscal year is the amount determined by the formula

(A + B + C + D + E ) / F

where

A      is the product of the average annual population of Ontario for that fiscal year and the aggregate of the average annual per capita yield for each revenue source in respect of Ontario for that fiscal year,

B      is the product of the average annual population of Quebec for that fiscal year and the aggregate of the average annual per capita yield for each revenue source in respect of Quebec for that fiscal year,

C      is the product of the average annual population of Manitoba for that fiscal year and the aggregate of the average annual per capita yield for each revenue source in respect of Manitoba for that fiscal year,

D      is the product of the average annual population of British Columbia for that fiscal year and the aggregate of the average annual per capita yield for each revenue source in respect of British Columbia for that fiscal year,

E      is the product of the average annual population of Saskatchewan for that fiscal year and the aggregate of the average annual per capita yield for each revenue source in respect of Saskatchewan for that fiscal year, and

F      is the aggregate of the average annual population for that fiscal year of Ontario, Quebec, Manitoba, British Columbia and Saskatchewan;

(b) if, for a province, the value determined for F in paragraph (1)(b) is greater than the value determined for E in that paragraph, the difference between those values in relation to that province is deemed to be zero; and

(c) if, for a province, the value determined for J in the description of H in paragraph (1)(b) is greater than the value determined for I in that description, the difference between those values in relation to that province is deemed to be zero.

(4) Subject to subsections (5) and (6), if, for a fiscal year, the fiscal equalization amount for a province determined under subsection (1) is greater than zero and that province has seventy per cent or more of the average annual revenue base for all of the provinces in that fiscal year in respect of a revenue source, the revenue to be equalized from that revenue source for all of the provinces for the purpose of determining the average annual per capita yield for each province for that revenue source for that fiscal year is an amount equal to seventy per cent of the revenue to be equalized as otherwise determined from that revenue source for all of the provinces for each of the three immediately preceding fiscal years.

(5) For the purpose of calculating the additional fiscal equalization payment that may be paid to Nova Scotia under subsection 3.71(1),

(a) subsection (4) applies to Nova Scotia in respect of the revenue source referred to in paragraph (z.5) of the definition “revenue source” in subsection 3.9(1) only for those fiscal years in the period referred to in subsection 3.71(3) for which the application of subsection (4) would result in an increase in the amount calculated under paragraph 3.71(1)(a); and

(b) subsection (4) applies to Newfoundland and Labrador in respect of the revenue source referred to in paragraph (z.5) of the definition “revenue source” in subsection 3.9(1) only for those fiscal years for which that province makes the election under subsection 3.9(5).

(6) For the purpose of calculating the additional fiscal equalization payment that may be paid to Newfoundland and Labrador under subsection 3.71(1),

(a) subsection (4) applies to Newfoundland and Labrador in respect of the revenue source referred to in paragraph (z.5) of the definition “revenue source” in subsection 3.9(1) only for those fiscal years in the period referred to in subsection 3.71(3) for which the application of subsection (4) would result in an increase in the amount calculated under paragraph 3.71(1)(a); and

(b) subsection (4) applies to Nova Scotia in respect of the revenue source referred to in paragraph (z.5) of the definition “revenue source” in subsection 3.9(1) only for those fiscal years for which that province makes the election under subsection 3.9(5).

164. (1) Subsection 3.9(1) of the Act is amended by adding the following in alphabetical order:

“average annual revenue base” means, in respect of a province for a revenue source for a fiscal year, the amount determined by the formula

(A + B + C) / 3

where

A      is the revenue base for the fiscal year that is one year prior to that fiscal year;

B      is the revenue base for the fiscal year that is two years prior to that fiscal year; and

C      is the revenue base for the fiscal year that is three years prior to that fiscal year.

“national average rate of tax” means, in respect of a revenue source, the rate equal to the quotient obtained by dividing the aggregate of the revenue to be equalized for a revenue source for a fiscal year for all provinces by the revenue base in respect of that revenue source for that fiscal year for all provinces.

“revenue base” means, in respect of a revenue source for a province for a fiscal year, the measure of the relative capacity of that province to derive revenue from that revenue source for that fiscal year and may be defined more particularly by the regulations.

“revenue source” means any of the following sources from which provincial revenues are or may be derived:

(a) personal income taxes;

(b) corporation income taxes, and revenues derived from government business enterprises that are not included in any other paragraph of this definition;

(c) taxes on capital of corporations;

(d) general and miscellaneous sales taxes, harmonized sales taxes and amusement taxes;

(e) tobacco taxes;

(f) motive fuel taxes derived from the sale of gasoline;

(g) motive fuel taxes derived from the sale of diesel fuel;

(h) non-commercial motor vehicle licensing revenues;

(i) commercial motor vehicle licensing revenues;

(j) alcoholic beverage revenues;

(k) hospital and medical care insurance premiums;

(l) forestry revenues;

(m) conventional new oil revenues;

(n) conventional old oil revenues;

(o) heavy oil revenues;

(p) mined oil revenues;

(q) light and medium third tier oil revenues;

(r) heavy third tier oil revenues;

(s) revenues from domestically sold natural gas and exported natural gas;

(t) sales of Crown leases and reservations on oil and natural gas lands;

(u) oil and gas revenues other than those described in paragraphs (m) to (t);

(v) mining revenues;

(w) water power rentals;

(x) insurance premium taxes;

(y) payroll taxes;

(z) provincial and local government property taxes;

(z.1) race track taxes;

(z.2) revenues from lottery ticket sales;

(z.3) revenues, other than those described in paragraphs (z.1) and (z.2), from games of chance;

(z.4) miscellaneous provincial taxes and revenues, provincial revenues from sales of goods and services, local government rev-enues from sales of goods and services, and miscellaneous local government taxes and revenues; and

(z.5) revenues of the Government of Canada from any of the sources referred to in this definition that are shared by Canada with the provinces.

“revenue to be equalized” means, in respect of a revenue source for a province for a fiscal year, the revenue, as determined by the Minister, derived by that province for that fiscal year from that revenue source and may be defined more particularly by the regulations.

(2) Subsections 3.9(2) to (7) of the Act are replaced by the following:

(2) In computing the revenue to be equalized from personal incomes taxes — referred to in paragraph (a) of the definition “revenue source” in subsection (1) — for all the provinces for a fiscal year, the Minister may deduct from the amount that, but for this subsection, would be the revenue to be equalized from that revenue source for all the provinces for that fiscal year, the amount, as estimated by the Minister, by which the revenues derived by Canada under the Income Tax Act from personal income taxes for the taxation year ending in that fiscal year are less than the revenues that would have been derived by Canada under that Act from those taxes if no special abatement of those taxes had been provided under subsection 120(2) of that Act or Part VI of this Act.

(3) For the purpose of determining the revenue to be equalized derived by a province for a fiscal year from the revenue sources referred to in paragraphs (a) and (b), the following are deemed to be revenues derived by that province for that fiscal year from those revenue sources:

(a) in the case of the part of the revenue source referred to in paragraph (z) of the definition “revenue source” in subsection (1) that consists of local government property taxes, the aggregate of the revenue derived from that part of the revenue source by each municipality, board, commission or other local authority in that province that has power to levy property taxes for the financial year of each such local authority ending in that fiscal year; and

(b) in the case of the part of the revenue source referred to in paragraph (z.4) of the definition “revenue source” in subsection (1) that consists of local government revenues from sales of goods and services and miscellaneous local government taxes and revenues, the aggregate of the revenue derived from that part of the revenue source by each municipality, board, commission or other local authority in that province that has power to derive those revenues for the financial year of each such local authority ending in that fiscal year.

(4) Subject to subsection (5), if, for a fiscal year, a province would be entitled to receive a fiscal equalization payment under section 3.6, computed as if that section applied to that province, and if that province has seventy per cent or more of the average annual revenue base for all of the provinces in that fiscal year in respect of a revenue source, the revenue to be equalized from that revenue source for all of the provinces for the purpose of determining the average annual per capita yield for each province for that revenue source for that fiscal year is an amount equal to seventy per cent of the revenue to be equalized as otherwise determined from that revenue source for all of the provinces for each of the three immediately preceding fiscal years.

(5) In order for subsection (4) to apply to Nova Scotia or to Newfoundland and Labrador in respect of the revenue source referred to in paragraph (z.5) of the definition “revenue source” in subsection (1), Nova Scotia or Newfoundland and Labrador, as the case may be, shall make an election at the prescribed time and in the prescribed manner.

(6) An election under subsection (5) by Nova Scotia or Newfoundland and Labrador in respect of a fiscal year is not valid if it has made an election under subsection 3.7(3) for that fiscal year or any previous fiscal year or if it makes an election under subsection 3.7(3) for that fiscal year.

(7) Despite any provision of the Canada-Newfoundland Atlantic Accord Implementation Act, if Newfoundland and Labrador makes the election described in subsection (5) for a fiscal year, the fiscal equalization offset payment that may otherwise be payable to the province under that Act is, for that fiscal year, zero.

165. Sections 3.91 to 3.93 of the Act are replaced by the following:

3.91 (1) At a time determined by the Minister, no later than three months before the beginning of a fiscal year, the Minister shall calculate

(a) the fiscal equalization payment that may be paid to a province under sections 3.2 to 3.4 for that fiscal year on the basis that the province makes an election under subsection 3.2(2) for that fiscal year; and

(b) the fiscal equalization payment that may be paid to the province under those sections for that fiscal year on the basis that the province does not make an election under that subsection for that fiscal year.

(2) Subsection (1) applies to Nova Scotia and Newfoundland and Labrador as if sections 3.2 to 3.4 applied to each of those provinces.

(3) At a time determined by the Minister, no later than three months before the end of a fiscal year, the Minister shall calculate

(a) the fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador under section 3.6 for that fiscal year on the basis that both make an election under subsection 3.9(5) for that fiscal year;

(b) the fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador under section 3.6 for that fiscal year on the basis that only Nova Scotia makes an election under subsection 3.9(5) for that fiscal year;

(c) the fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador under section 3.6 for that fiscal year on the basis that only Newfoundland and Labrador makes an election under subsection 3.9(5) for that fiscal year; and

(d) the fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador under section 3.6 for that fiscal year on the basis that neither makes an election under subsection 3.9(5) for that fiscal year.

(4) Subsection (3) ceases to apply in respect of Nova Scotia or Newfoundland and Labrador if section 3.6 ceases to apply in respect of that province.

(5) The fiscal equalization amounts referred to in section 3.72 for a fiscal year shall be calculated no later than three months before the end of the fiscal year.

3.92 If the Minister determines that the Minister has underpaid any amounts payable to a province under this Part, the Minister may, within the prescribed time and in the prescribed manner, pay that province an amount equal to the underpayment.

3.93 If the Minister determines that the Minister has overpaid any amounts paid to a province under this Part, the Minister may recover the amount of that overpayment

(a) within the prescribed time and in the prescribed manner, from any amount payable under this Act to that province; or

(b) from that province as a debt due to Her Majesty in right of Canada.

166. The Act is amended by adding the following after section 3.95:

3.96 An election under this Part is deemed to have been made on the day on which the election is received by the Minister.

3.97 For the purpose of the Canada-Newfoundland Atlantic Accord Implementation Act and the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act, the final computation of the amount of the fiscal equalization payment for a fiscal year is deemed to have been made on March 31 of that fiscal year.

167. Sections 4.4 and 4.5 of the Act are replaced by the following:

4.4 If the Minister determines that the Minister has underpaid any amounts payable to a territory under this Part, the Minister may, within the prescribed time and in the prescribed manner, pay that territory an amount equal to the underpayment.

4.5 If the Minister determines that the Minister has overpaid any amounts paid to a territory under this Part, the Minister may recover the amount of that overpayment

(a) within the prescribed time and in the prescribed manner, from any amount payable under this Act to that territory; or

(b) from that territory as a debt due to Her Majesty in right of Canada.

168. Paragraphs 40(a.2) to (b) of the Act are replaced by the following:

(a.2) providing for the provincial or territo-rial revenues that are derived from, or are deemed to be derived from, the revenue sources referred to in each paragraph of the definition “revenue source” in subsections 3.5(1), 3.9(1) and 4(1);

(a.3) amending the definition “revenue source” in subsection 3.9(1) by dividing a revenue source set out in a paragraph of that definition into two or more separate revenue sources;

(b) respecting the calculation and payment to a province of advances on account of any amount that may become payable to the province under this Act, an administration agreement, a reciprocal taxation agreement or a sales tax harmonization agreement and the adjustment, by way of reduction or set off, of other payments to the province because of those advances;

(b.1) respecting the recovery of overpayments;

Amendments to the Budget Implementation Act, 2007

169. Section 78 of the Budget Implementation Act, 2007 is repealed.

170. Section 83 of the Act and the heading before it are repealed.

171. Section 84 of the Act is replaced by the following:

84. (1) Sections 79 and 82 come into force, or are deemed to have come into force, on April 1 of the first fiscal year in respect of which Newfoundland and Labrador makes the election under subsection 3.7(3) of the Federal-Provincial Fiscal Arrangements Act.

(2) The Minister of Finance shall publish in the Canada Gazette the date on which sections 79 and 82 come into force.

(3) Section 81 comes into force, or is deemed to have come into force, on April 1, 2008.

Consequential Amendment to the Canada-Newfoundland Atlantic Accord Implementation Act

172. Section 220 of the Canada-Newfoundland Atlantic Accord Implementation Act is replaced by the following:

220. The fiscal equalization offset payment that is to be paid to Her Majesty in right of the Province for a fiscal year pursuant to section 219 is the amount, as determined by the Federal Minister, equal to the aggregate of

(a) the amount, if any, by which

(i) the fiscal equalization payment that would be received by Her Majesty in right of the Province for the fiscal year if the amount of that payment were determined in accordance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act,

is less than

(ii) where the average of the per capita fiscal capacity of the Province for the fiscal years taken into account in the calculation of the fiscal equalization payment for that fiscal year is less than or equal to 70 per cent of the average, for those fiscal years, of the national average per capita fiscal capacity, 95 per cent,

(iii) where the average of the per capita fiscal capacity of the Province for the fiscal years taken into account in the calculation of the fiscal equalization payment for that fiscal year is less than or equal to 75 per cent but greater than 70 per cent of the average, for those fiscal years, of the national average per capita fiscal capacity, 90 per cent, or

(iv) where the average of the per capita fiscal capacity of the Province for the fiscal years taken into account in the calculation of the fiscal equalization payment for that fiscal year is greater than 75 per cent of the average, for those fiscal years, of the national average per capita fiscal capacity, 85 per cent

of the aggregate of

(v) the fiscal equalization payment that would be received by Her Majesty in right of the Province for the fiscal year immediately preceding the fiscal year if the amount of that payment were determined in accordance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act, as if

(A) in the case where the province makes the election under subsection 3.2(2) of that Act for the fiscal year, the province made the election under subsection 3.2(2) of that Act for the fiscal year immediately preceding the fiscal year, or

(B) in the case where the province does not make the election under subsection 3.2(2) of that Act for the fiscal year, the province did not make the election under subsection 3.2(2) of that Act for the fiscal year immediately preceding the fiscal year, and

(vi) the amount computed in accordance with this paragraph for the fiscal year immediately preceding the fiscal year as this paragraph read for that fiscal year, and

(b) the phase-out portion, in respect of the fiscal year, of the amount, as determined by the Federal Minister, by which

(i) the aggregate of the fiscal equalization payment that would be received by Her Majesty in right of the Province for the fiscal year immediately preceding the fiscal year if the amount of that payment were determined in accordance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act, and the amount computed in accordance with paragraph (a) for the fiscal year immediately preceding the fiscal year, as that paragraph read for that fiscal year,

is greater than

(ii) the aggregate of

(A) the fiscal equalization payment that would be received by Her Majesty in right of the Province for the fiscal year if the amount of that payment were determined in accordance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act, as if

(I) in the case where the province makes the election under subsection 3.2(2) of that Act for the fiscal year, the province made the election under subsection 3.2(2) of that Act for the fiscal year immediately preceding the fiscal year, or

(II) in the case where the province does not make the election under subsection 3.2(2) of that Act for the fiscal year, the province did not make the election under subsection 3.2(2) of that Act for the fiscal year immediately preceding the fiscal year, and

(B) the amount computed in accordance with paragraph (a) for the fiscal year.

Transitional Provisions

173. If section 165 of this Act comes into force after a calculation has already been made under section 3.91 of the Federal-Provincial Fiscal Arrangements Act of the fiscal equalization payment that may be paid to a province under section 3.6 of that Act for the fiscal year beginning on April 1, 2008, the Minister of Finance may, under section 3.91 of that Act, as enacted by section 165 of this Act, recalculate the fiscal equalization payment that may be paid to the province under section 3.6 of the Federal-Provincial Fiscal Arrangements Act for that fiscal year.

174. (1) For the fiscal year that begins on April 1, 2007, if Newfoundland and Labrador makes the election under subsection 3.7(1) of the Federal-Provincial Fiscal Arrangements Act,

(a) section 220 of the Canada-Newfoundland Atlantic Accord Implementation Act shall be read as follows:

220. The fiscal equalization offset payment that is to be paid to Her Majesty in right of the Province for a fiscal year pursuant to section 219 is the amount, as determined by the Federal Minister, equal to the aggregate of

(a) the amount, if any, by which

(i) the fiscal equalization payment that would be received by Her Majesty in right of the Province for the fiscal year if the amount of that payment were determined in accordance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act,

is less than

(ii) where the average of the per capita fiscal capacity of the Province for the fiscal years taken into account in the calculation of the fiscal equalization payment for that fiscal year is less than or equal to 70 per cent of the average, for those fiscal years, of the national average per capita fiscal capacity, 95 per cent,

(iii) where the average of the per capita fiscal capacity of the Province for the fiscal years taken into account in the calculation of the fiscal equalization payment for that fiscal year is less than or equal to 75 per cent but greater than 70 per cent of the average, for those fiscal years, of the national average per capita fiscal capacity, 90 per cent, or

(iv) where the average of the per capita fiscal capacity of the Province for the fiscal years taken into account in the calculation of the fiscal equalization payment for that fiscal year is greater than 75 per cent of the average, for those fiscal years, of the national average per capita fiscal capacity, 85 per cent

of the aggregate of the fiscal equalization payment that would be received by Her Majesty in right of the Province under Part I of the Federal-Provincial Fiscal Arrangements Act for the fiscal year immediately preceding the fiscal year and the amount computed in accordance with this paragraph for the fiscal year immediately preceding the fiscal year as this paragraph read for that fiscal year, and

(b) the phase-out portion, in respect of the fiscal year, of the amount, as determined by the Federal Minister, by which

(i) the aggregate of the fiscal equalization payment that would be received by Her Majesty in right of the Province under Part I of the Federal-Provincial Fiscal Arrangements Act for the fiscal year immediately preceding the fiscal year and the amount computed in accordance with paragraph (a) for the fiscal year immediately preceding the fiscal year as that paragraph read for that fiscal year

is greater than

(ii) the aggregate of the fiscal equalization payment that would be received by Her Majesty in right of the Province if the amount of that payment were determined in accordance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act, for the fiscal year and the amount computed in accordance with paragraph (a) for the fiscal year.

(b) a reference to “average” in section 220 of the Canada-Newfoundland Atlantic Accord Implementation Act, except within the expression “national average per capita fiscal capacity”, shall be considered to mean a weighted average where the most recent fiscal year that is taken into account in the calculation of the fiscal equalization payment shall be weighted at 50% and each of the other two fiscal years that are taken into account in the calculation of the fiscal equalization payment shall be weighted at 25%; and

(c) the definition “fiscal equalization payment” in section 18 of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act shall be read as follows:

“fiscal equalization payment” means

(a) for the purposes of section 22, the fiscal equalization payment that would be received by the Province for a fiscal year if the amount of that payment were determined in accord-ance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act; and

(b) for the purposes of sections 24 to 26, the fiscal equalization payment that would be received by the Province for a fiscal year under Part I of the Federal-Provincial Fiscal Arrangements Act if the Province’s total per capita fiscal capacity were the amount determined by the formula

A + B + (C / F)

where

A,      B, C and F have the same meaning as in the definition “total per capita fiscal capacity” in subsection 3.5(1) of that Act.

(2) For the fiscal year that begins on April 1, 2007, if Nova Scotia makes the election under subsection 3.7(1) of the Federal-Provincal Fiscal Arrangements Act, the definition “fiscal equalization payment” in section 4 of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act shall be read as follows:

“fiscal equalization payment” means

(a) for the purposes of section 8, the fiscal equalization payment that would be received by the Province for a fiscal year if the amount of that payment were determined in accord-ance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act; and

(b) for the purposes of sections 10 to 12, the fiscal equalization payment that would be received by the Province for a fiscal year under Part I of the Federal-Provincial Fiscal Arrangements Act if the Province’s total per capita fiscal capacity were the amount determined by the formula

A + B + (C / F)

where

A,      B, C and F have the same meaning as in the definition “total per capita fiscal capacity” in subsection 3.5(1) of that Act.

(3) For the fiscal year that begins on April 1, 2008, if Newfoundland and Labrador does not make the election under subsection 3.7(3) of the Federal-Provincial Fiscal Arrangements Act and made, in respect of the preceding fiscal year, the election under subsection 3.7(1) of that Act,

(a) the portion of paragraph 220(a) of the Canada-Newfoundland Atlantic Accord Implementation Act after subparagraph (iv) shall be read as follows:

of the aggregate of the fiscal equalization payment that would be received by Her Majesty in right of the Province under section 3.1 of the Federal-Provincial Fiscal Arrangements Act for the fiscal year immediately preceding the fiscal year and the amount computed in accordance with this paragraph for the fiscal year immediately preceding the fiscal year as this paragraph read for that fiscal year, and

(b) subparagraph 220(b)(i) of that Act shall be read as follows:

(i) the aggregate of the fiscal equalization payment that would be received by Her Majesty in right of the Province under section 3.1 of the Federal-Provincial Fiscal Arrangements Act for the fiscal year immediately preceding the fiscal year and the amount computed in accordance with paragraph (a) for the fiscal year immediately preceding the fiscal year as that paragraph read for that fiscal year

Coming into Force

175. (1) Section 172 comes into force, or is deemed to have come into force, on April 1 of the first fiscal year in respect of which Newfoundland and Labrador makes the election under subsection 3.7(3) of the Federal-Provincial Fiscal Arrangements Act.

(2) The Minister of Finance shall publish in the Canada Gazette the date on which section 172 comes into force.

PART 12

AMENDMENTS TO THE CANADA EDUCATION SAVINGS ACT

176. The Canada Education Savings Act is amended by adding the following after section 12:

12.1 If the Minister considers it advisable, the Minister may, subject to conditions agreed on by the Minister and the Minister of National Revenue, collect the Social Insurance Number of any registered education savings plan subscriber as well as any prescribed information, for the administration of section 146.1 and Parts X.4 and X.5 of the Income Tax Act.

177. Section 13 of the Act is amended by striking out the word “and” at the end of paragraph (j), by adding the word “and” at the end of paragraph (k) and by adding the following after paragraph (k):

(l) specifying information that the Minister may collect under section 12.1.

PART 13

PRIVATE-PUBLIC PARTNERSHIPS

178. There may be paid out of the Consolidated Revenue Fund, on the requisition of the Minister of Finance, a sum not exceeding five million dollars, to an entity designated by the Minister of Finance, to facilitate public-private partnership projects in respect of that entity’s operating and capital expenditures for each of fiscal years 2007-2008 and 2008-2009.

PART 14

TAX AMENDMENTS TO IMPLEMENT THE 2007 ECONOMIC STATEMENT

Amendments Relating to Income Tax

Income Tax Act

179. (1) Paragraph 117(2)(a) of the Income Tax Act is replaced by the following:

(a) 15% of the amount taxable, if the amount taxable is equal to or less than the amount determined for the taxation year in respect of $36,378;

(2) Subsection (1) applies to the 2007 and subsequent taxation years.

180. (1) Paragraphs 118(3.1)(c) to (f) of the Act are replaced by the following:

(c) for the 2007 and 2008 taxation years, to be replaced by $9,600;

(d) for the 2009 taxation year, to be replaced by $10,100; and

(e) for each of the 2010 and subsequent taxation years, to be replaced by the amount that is the amount that would be determined for that description for those years in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under this subsection in respect of the amount for the immediately preceding taxation year.

(2) Paragraphs 118(3.2)(c) to (f) of the Act are replaced by the following:

(c) for the 2007 and 2008 taxation years, to be replaced by $9,600;

(d) for the 2009 taxation year, to be replaced by $10,100; and

(e) for each of the 2010 and subsequent taxation years, to be replaced by the amount that is the amount that would be determined for that description for those years in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under this subsection in respect of the amount for the immediately preceding taxation year.

(3) Subsections (1) and (2) apply to the 2007 and subsequent taxation years.

181. (1) Paragraphs (b) to (e) of the definition “general rate reduction percent-age” in subsection 123.4(1) of the Act are replaced by the following:

(b) that proportion of 8.5% that the number of days in the taxation year that are in 2008 is of the number of days in the taxation year,

(c) that proportion of 9% that the number of days in the taxation year that are in 2009 is of the number of days in the taxation year,

(d) that proportion of 10% that the number of days in the taxation year that are in 2010 is of the number of days in the taxation year,

(e) that proportion of 11.5% that the number of days in the taxation year that are in 2011 is of the number of days in the taxation year, and

(f) that proportion of 13% that the number of days in the taxation year that are after 2011 is of the number of days in the taxation year.

(2) Subsection (1) applies to the 2008 and subsequent taxation years.

182. (1) Paragraphs 125(1.1)(b) and (c) of the Act are replaced by the following:

(b) that proportion of 17% that the number of days in the taxation year that are after 2007 is of the number of days in the taxation year.

(2) Subsection (1) applies to the 2008 and subsequent taxation years.

Amendments to Implement the GST/HST Rate Reduction

Excise Tax Act

183. (1) The description of G in paragraph (a) of the definition “basic tax content” in subsection 123(1) of the Excise Tax Act is amended by striking out the word “and” at the end of clause (A) and by replacing clause (B) with the following:

(B) 6%, if the amount determined for D is included, or would be included if the tax became payable, in the description of A in subsection 225.2(2) for a reporting period of the selected listed financial institution that ends after June 30, 2006, but before January 1, 2008, and

(C) 5%, in any other case,

(2) The description of P in paragraph (b) of the definition “basic tax content” in subsection 123(1) of the Act is amended by striking out the word “and” at the end of clause (A) and by replacing clause (B) with the following:

(B) 6%, if the amount determined for M is included, or would be included if the tax became payable, in the description of A in subsection 225.2(2) for a reporting period of the selected listed financial institution that ends after June 30, 2006, but before January 1, 2008, and

(C) 5%, in any other case,

(3) Subsections (1) and (2) come into force, or are deemed to have come into force, on January 1, 2008.

184. (1) Subsection 165(1) of the Act is replaced by the following:

165. (1) Subject to this Part, every recipient of a taxable supply made in Canada shall pay to Her Majesty in right of Canada tax in respect of the supply calculated at the rate of 5% on the value of the consideration for the supply.

(2) Subsection (1) applies

(a) to any supply (other than a supply deemed under section 191 of the Act to have been made) made on or after January 1, 2008;

(b) for the purposes of calculating tax in respect of any supply (other than a supply by way of sale of real property) made before January 1, 2008, but only in respect of the portion of the tax that

(i) becomes payable on or after January 1, 2008, without having been paid before that day, or

(ii) is paid on or after January 1, 2008, without having become payable;

(c) for the purposes of calculating tax in respect of any supply (other than a supply deemed under Part IX of the Act to have been made) by way of sale of real property made before January 1, 2008, if ownership and possession of the property are transferred on or after January 1, 2008, to the recipient under the agreement for the supply, unless the supply is a supply of a residential complex pursuant to an agreement of purchase and sale, evidenced in writing, entered into on or before October 30, 2007;

(d) for the purposes of determining, under section 181.1 of the Act, tax or an input tax credit in respect of a supply of property or a service in respect of which tax became payable on or after January 1, 2008;

(e) for the purposes of the description of A in clause 184.1(2)(d)(i)(A) of the Act in respect of a person acting as a surety under a performance bond in respect of a contract for a particular taxable supply of construction services if a contract payment (within the meaning of paragraph 184.1(2)(a) of the Act) becomes due or is paid without having become due to the person on or after January 1, 2008, by reason of the person carrying on the particular construction;

(f) to any supply by way of sale of a residential complex, which is a single unit residential complex (as defined in subsection 123(1) of the Act) or a residential condominium unit, deemed under subsection 191(1) of the Act to have been made on or after January 1, 2008, unless the supply is deemed to have been made as a consequence of the builder giving possession of the complex to a person under an agreement, entered into on or before October 30, 2007, for the supply by way of sale of the building or part of it in which the residential unit forming part of the complex is situated;

(g) to any supply by way of sale of a residential condominium unit deemed under subsection 191(2) of the Act to have been made on or after January 1, 2008, unless possession of the unit was given to the particular person referred to in that subsection before January 1, 2008;

(h) to any supply by way of sale of a residential complex deemed under subsection 191(3) of the Act to have been made on or after January 1, 2008, unless the supply is deemed to have been made as a consequence of the builder giving possession of a residential unit in the complex to a person under an agreement for the supply by way of sale of the building or part of it forming part of the complex and

(i) the agreement was entered into on or before October 30, 2007, or

(ii) another agreement for the supply by way of sale of the building or part of it forming part of the complex was entered into by the builder and another person

(A) on or before May 2, 2006, and that other agreement was not terminated before July 1, 2006, or

(B) on or before October 30, 2007, and that other agreement was not terminated before January 1, 2008;

(i) to any supply by way of sale of an addition to a residential complex deemed under subsection 191(4) of the Act to have been made on or after January 1, 2008, unless the supply is deemed to have been made as a consequence of the builder giving possession of a residential unit in the addition to a person under an agreement for the supply by way of sale of the building or part of it forming part of the complex and

(i) the agreement was entered into on or before October 30, 2007, or

(ii) another agreement for the supply by way of sale of the building or part of it forming part of the addition was entered into by the builder and another person

(A) on or before May 2, 2006, and that other agreement was not terminated before July 1, 2006, or

(B) on or before October 30, 2007, and that other agreement was not terminated before January 1, 2008;

(j) for the purposes of calculating tax on the cost to another person of supplying property or a service to a financial institution under paragraph (c) of the description of A in subsection 225.2(2) of the Act for a reporting period of the financial institution that ends on or after January 1, 2008;

(k) for the purposes of the description of E in subsection 225.2(2) of the Act in determining the net tax of a financial institution for a reporting period that ends on or after January 1, 2008;

(l) for the purposes of the description of A in subsection 253(1) and subparagraphs 253(2)(a)(ii) and (c)(ii) of the Act in determining the amount of a rebate payable under subsection 253(1) of the Act for a calendar year after 2007;

(m) for the purposes of subparagraphs (i) and (ii) of the description of C in subsection 21.3(2) of the Streamlined Accounting (GST/HST) Regulations in determining, pursuant to that subsection, an amount of tax that became payable, or was paid without having become payable, by a registrant during reporting periods ending after 2007, except that for the reporting period of the registrant that includes January 1, 2008, the formula and the descriptions of A, B, C and D in that subsection shall be read as follows:

(A × B) + (C × D)

where

A      is

(a) if tax under subsection 165(2) or section 212.1 of the Act was payable in respect of the supply or importation, 14/114, and

(b) in any other case, 6/106,

B      is the total of all amounts each of which is

(a) the consideration that became due, or was paid without having become due, by the registrant during that period but before January 1, 2008, in respect of the supply of the property or service to the registrant,

(b) the tax under Division II or III that became payable, or was paid without having become payable, by the registrant during that period but before January 1, 2008, in respect of the supply or importation of the property or service,

(c) in the case of tangible personal property that was imported by the registrant, the amount of a tax or duty imposed in respect of the property under the Act (other than Part IX), the Customs Act, the Special Import Measures Act or any other law relating to customs, that became due or was paid without having become due, by the registrant during that period but before January 1, 2008,

(d) the amount of a tax, duty or fee prescribed by paragraph 3(b) or (c) of the Taxes, Duties and Fees (GST/HST) Regulations that became due, or was paid without having become due, by the registrant during that period but before January 1, 2008, in respect of the property or service, other than tax imposed under an Act of a legislature of a province to the extent that the tax is recoverable by the registrant under that Act,

(e) a reasonable gratuity paid by the registrant during that period but before January 1, 2008, in connection with the supply, or

(f) interest, a penalty or other amount paid by the registrant during that period but before January 1, 2008, if the amount was charged to the registrant by the supplier because an amount of consideration, or an amount of a tax, duty or fee referred to in paragraph (c) or (d), that was payable in respect of the supply or importation was overdue,

C      is

(a) if tax under subsection 165(2) or section 212.1 of the Act was payable in respect of the supply or importation, 13/113, and

(b) in any other case, 5/105, and

D      is the total of all amounts each of which is

(a) the consideration that became due, or was paid without having become due, by the registrant during that period but on or after January 1, 2008, in respect of the supply of the property or service to the registrant,

(b) the tax under Division II or III that became payable, or was paid without having become payable, by the registrant during that period but on or after January 1, 2008, in respect of the supply or importation of the property or service,

(c) in the case of tangible personal property that was imported by the registrant, the amount of a tax or duty imposed in respect of the property under the Act (other than Part IX), the Customs Act, the Special Import Measures Act or any other law relating to customs, that became due, or was paid without having become due, by the registrant during that period but on or after January 1, 2008,

(d) the amount of a tax, duty or fee prescribed by paragraph 3(b) or (c) of the Taxes, Duties and Fees (GST/HST) Regulations that became due, or was paid without having become due, by the registrant during that period but on or after January 1, 2008, in respect of the property or service, other than tax imposed under an Act of a legislature of a province to the extent that the tax is recoverable by the registrant under that Act,

(e) a reasonable gratuity paid by the registrant during that period but on or after January 1, 2008, in connection with the supply, or

(f) interest, a penalty or other amount paid by the registrant during that period but on or after January 1, 2008, if the amount was charged to the registrant by the supplier because an amount of consideration, or an amount of a tax, duty or fee referred to in paragraph (c) or (d), that was payable in respect of the supply or importation was overdue.

(n) for the purposes of subparagraphs (i) and (ii) of the description of C in paragraph 21.3(4)(b) of the Streamlined Accounting (GST/HST) Regulations in determining an amount excluded under subsection 21.3(4) of those Regulations from the determination of an input tax credit in respect of a passenger vehicle for which tax on the acquisition or importation first became payable or was first paid without having become payable after 2007; and

(o) for the purposes of determining or calculating any of the following amounts if none of paragraphs (a) to (n) applies:

(i) tax on or after January 1, 2008,

(ii) tax that is not payable but would have been payable on or after January 1, 2008, in the absence of certain circumstances described in the Act, and

(iii) an amount or a number, at any time on or after January 1, 2008, by or in accordance with an algebraic formula that makes reference to the rate set out in subsection 165(1) of the Act.

(3) Despite paragraph (2)(e) and for the purposes of the description of A in clause 184.1(2)(d)(i)(A) of the Act in determining the total amount of all input tax credits in respect of direct inputs (within the meaning of paragraph 184.1(2)(c) of the Act), where a surety is carrying on a particular construction of real property situated in Canada as full or partial satisfaction of the surety’s obligation under a bond, a contract payment (within the meaning of paragraph 184.1(2)(a) of the Act), other than a contract payment that is not in respect of the particular construction, becomes due or is paid without having become due before January 1, 2008, and another contract payment (within the meaning of paragraph 184.1(2)(a) of the Act), other than a contract payment that is not in respect of the particular construction, becomes due on or after that day, without having been paid before that day, or is paid without having become due on or after that day, clause 184.1(2)(d)(i)(A) of the Act shall be read as follows:

(A) the amount determined by the formula

(A × B) + (C × D) + (E × F)

where

A      is

(I) if the supply deemed under subparagraph (a)(i) to be made by the surety is made in a participating province, the total of 7% and the rate of tax for that participating province, and

(II) in any other case, 7%,

B      is the total of all contract payments (other than contract payments that are not in respect of the particular construction) that become due before July 1, 2006, or are paid, without having become due, to the surety before that day,

C      is

(I) if the supply deemed under subparagraph (a)(i) to be made by the surety is made in a participating province, the total of 6% and the rate of tax for the participating province, and

(II) in any other case, 6%,

D      is the total of all contract payments (other than contract payments that are not in respect of the particular construction) that become due on or after July 1, 2006, and before January 1, 2008, without having been paid before July 1, 2006, or are paid, without having become due, to the surety on or after that day and before January 1, 2008,

E      is

(I) if the supply deemed under subparagraph (a)(i) to be made by the surety is made in a participating province, the total of 5% and the rate of tax for the participating province, and

(II) in any other case, 5%, and

F      is the total of all contract payments (other than contract payments that are not in respect of the particular construction) that become due on or after January 1, 2008, without having been paid before that day, or are paid, without having become due, to the surety on or after that day

185. (1) The description of A in clause 173(1)(d)(vi)(B) of the Act is replaced by the following:

A      is

(I) where

1. the benefit amount is required to be included under paragraph 6(1)(a) or (e) of the Income Tax Act in computing the individual’s income from an office or employment and the last establishment of the employer at which the individual ordinarily worked or to which the individual ordinarily reported in the year in relation to that office or employment is located in a participating prov-ince, or

2. the benefit amount is required under subsection 15(1) of that Act to be included in computing the individual’s income and the individual is resident in a participating prov-ince at the end of the year,

the total of 4% and the tax rate for the participating province, and

(II) in any other case, 4%,

(2) Subsection (1) applies to the 2008 and subsequent taxation years of an individual.

186. (1) Section 212 of the Act is replaced by the following:

212. Subject to this Part, every person who is liable under the Customs Act to pay duty on imported goods, or who would be so liable if the goods were subject to duty, shall pay to Her Majesty in right of Canada tax on the goods calculated at the rate of 5% on the value of the goods.

(2) Subsection (1) applies to goods imported into Canada, or released (as defined in the Customs Act), on or after January 1, 2008.

187. (1) Section 218 of the Act is replaced by the following:

218. Subject to this Part, every recipient of an imported taxable supply shall pay to Her Majesty in right of Canada tax calculated at the rate of 5% on the value of the consideration for the imported taxable supply.

(2) Subsection (1) applies

(a) to any imported taxable supply made on or after January 1, 2008;

(b) for the purposes of calculating tax in respect of any imported taxable supply made before January 1, 2008, but only in respect of consideration that becomes due on or after that day without having been paid before that day or that is paid, without having become due, on or after January 1, 2008; and

(c) if neither paragraph (a) nor (b) applies, for the purposes of determining or calculating tax that is not payable but would have been payable on or after January 1, 2008, in the absence of certain circumstances described in the Act.

188. (1) Paragraph 254(2)(h) of the Act is replaced by the following:

(h) where the total consideration is not more than $350,000, an amount equal to the lesser of $6,300 and 36% of the total tax paid by the particular individual, and

(2) The description of A in paragraph 254(2)(i) of the Act is replaced by the following:

A      is the lesser of $6,300 and 36% of the total tax paid by the particular individual, and

(3) Subsections (1) and (2) apply to any rebate in respect of a supply by way of sale of a residential complex in respect of which ownership is transferred on or after January 1, 2008, to the particular individual referred to in section 254 of the Act, unless the tax payable under subsection 165(1) of the Act in respect of the supply of the complex applied at the rate of 6% or 7%.

189. (1) Paragraph 254.1(2)(c) of the Act is replaced by the following:

(c) the fair market value of the complex, at the time possession of the complex is given to the particular individual under the agreement, is less than $472,500,

(2) Paragraphs 254.1(2)(h) and (i) of the Act are replaced by the following:

(h) if the fair market value referred to in paragraph (c) is not more than $367,500, an amount equal to 1.71% of the total (in this subsection referred to as the “total consideration”) of all amounts, each of which is the consideration payable by the particular individual to the builder for the supply by way of sale to the particular individual of the building or part of a building referred to in paragraph (a) or of any other structure that forms part of the complex, other than consideration that can reasonably be regarded as rent for the supplies of the land attributable to the complex or as consideration for the supply of an option to purchase that land, and

(i) if the fair market value referred to in paragraph (c) is more than $367,500 but less than $472,500, the amount determined by the formula

A × [($472,500 - B)/$105,000]

where

A      is the lesser of $6,300 and 1.71% of the total consideration, and

B      is the fair market value referred to in paragraph (c).

(3) Paragraph 254.1(2.1)(a) of the Act is replaced by the following:

(a) a particular individual is entitled to a rebate under subsection (2), or to be paid or credited the amount of such a rebate under subsection (4), in respect of a residential complex situated in Nova Scotia, or would be so entitled if the fair market value of the complex, at the time possession of the complex is given to the particular individual under the agreement for the supply of the complex to the particular individual, were less than $472,500,

(4) Subsections (1) to (3) apply in respect of a supply, to a particular individual referred to in section 254.1 of the Act, of a building or part of it in which a residential unit forming part of a residential complex is situated if possession of the unit is given to the particular individual on or after January 1, 2008, unless the builder is deemed under section 191 of the Act to have paid tax under subsection 165(1) of the Act calculated at the rate of 6% or 7% in respect of the supply referred to in paragraph 254.1(2)(d) of the Act.

190. (1) Paragraph 255(2)(d) of the Act is replaced by the following:

(d) the total (in this subsection referred to as the “total consideration”) of all amounts, each of which is the consideration payable for the supply to the particular individual of the share or an interest in the corporation, complex or unit, is less than $472,500,

(2) Paragraphs 255(2)(g) and (h) of the Act are replaced by the following:

(g) if the total consideration is not more than $367,500, an amount equal to 1.71% of the total consideration, and

(h) if the total consideration is more than $367,500 but less than $472,500, the amount determined by the formula

A × [($472,500 - B)/$105,000]

where

A      is the lesser of $6,300 and 1.71% of the total consideration, and

B      is the total consideration.

(3) Paragraph 255(2.1)(c) of the Act is replaced by the following:

(c) the particular individual is entitled to a rebate under subsection (2) in respect of the share or would be so entitled if the total (in this subsection referred to as the “total consideration”) of all amounts, each of which is the consideration payable for the supply to the particular individual of the share or an interest in the corporation, complex or unit, were less than $472,500,

(4) Subsections (1) to (3) apply for the purpose of determining a rebate in respect of a supply, by a cooperative housing corporation to an individual, of a share of the capital stock of the corporation if the individual is acquiring the share for the purpose of using a residential unit in a residential complex as the primary place of residence of the individual, or a relation (as defined in subsection 255(1) of the Act) of the individ-ual, and the rebate application is filed on or after January 1, 2008, unless the corporation paid tax under subsection 165(1) of the Act in respect of the supply of the complex to the corporation calculated at the rate of 6% or 7%.

191. (1) Subparagraphs (i) and (ii) of the description of A in subsection 256(2) of the Act are replaced by the following:

(i) if all or substantially all of that tax was paid at the rate of 5%, $6,300,

(ii) if all or substantially all of that tax was paid at the rate of 6%, $7,560, and

(iii) in any other case, the lesser of $8,750 and the amount determined by the formula

(C × $2,520) + (D × $1,260) + $6,300

where

C      is the extent (expressed as a percent-age) to which that tax was paid at the rate of 7%, and

D      is the extent (expressed as a percent- age) to which that tax was paid at the rate of 6%, and

(2) Subsection (1) applies to any rebate in respect of a residential complex for which an application is filed with the Minister of National Revenue on or after January 1, 2008.

192. (1) The portion of the description of A in subsection 256.2(3) of the Act before the formula is replaced by the following:

A      is the lesser of $6,300 and the amount determined by the formula

(2) The portion of the description of A in subsection 256.2(4) of the Act before the formula is replaced by the following:

A      is the lesser of $6,300 and the amount determined by the formula

(3) The portion of the description of A in subsection 256.2(5) of the Act before the formula is replaced by the following:

A      is the lesser of $6,300 and the amount determined by the formula

(4) Subsection (1) applies to

(a) a taxable supply to a recipient from another person of a residential complex or an interest in a residential complex, in respect of which ownership and possession under the agreement for the supply are transferred on or after January 1, 2008, unless the agreement for the supply is evidenced in writing and was entered into on or before October 30, 2007; and

(b) a deemed purchase (within the meaning of subparagraph 256.2(3)(a)(ii) of the Act) by a builder if the tax in respect of the deemed purchase of a complex or an addition to a complex is deemed to have been paid on or after January 1, 2008.

(5) Subsection (2) applies to a supply of a building or part of it forming part of a residential complex and a supply of land, described in subparagraphs 256.2(4)(a)(i) and (ii) of the Act, that result in a person being deemed under section 191 of the Act to have made and received a taxable supply by way of sale of the complex or of an addition to it on or after January 1, 2008, unless the supply is deemed to have been made as a consequence of the builder giving possession of a residential unit in the complex or the addition to a person under an agreement for the supply by way of sale of the building or part of it forming part of the complex or the addition and

(a) the agreement was entered into on or before October 30, 2007;

(b) another agreement was entered into by the builder and another person on or before May 2, 2006, and that other agreement was not terminated before July 1, 2006, and was for the supply by way of sale of the building or part of it forming part of

(i) in the case of a deemed supply of a complex, the complex, or

(ii) in the case of a deemed supply of an addition, the addition; or

(c) another agreement was entered into by the builder and another person on or before October 30, 2007, and that other agreement was not terminated before January 1, 2008, and was for the supply by way of sale of the building or part of it forming part of

(i) in the case of a deemed supply of a complex, the complex, or

(ii) in the case of a deemed supply of an addition, the addition.

(6) Subsection (3) applies to

(a) a taxable supply by way of sale to a recipient from another person of a residential complex, or an interest in a residential complex, in respect of which ownership and possession under the agreement for the supply are transferred on or after January 1, 2008, unless the agreement is evidenced in writing and was entered into on or before October 30, 2007; and

(b) a deemed purchase (within the meaning of subparagraph 256.2(5)(a)(ii) of the Act) by a builder if the tax in respect of the deemed purchase of a complex or an addition to a complex is deemed to have been paid on or after January 1, 2008.

193. (1) The description of C in subsection 256.6(1) of the Act is replaced by the following:

C      is the fair market value of the complex or, if the builder is deemed to have made a supply of an addition, of the addition, at the time the builder is deemed to have made the supply referred to in paragraph (b),

(2) Subsection (1) is deemed to have come into force on July 1, 2006.

194. (1) The Act is amended by adding the following after section 256.6:

256.7 (1) If a particular person, other than a cooperative housing corporation,

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into on or before May 2, 2006, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the particular person on or after January 1, 2008,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(c) is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection or under subsection 256.3(1), in respect of the tax referred to in paragraph (b),

the Minister shall, subject to subsection (7), pay a rebate to the particular person, in addition to the rebate payable under subsection 256.3(1), equal to 1% of the value of the consideration for the supply.

(2) If a particular person, other than a cooperative housing corporation,

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into on or before May 2, 2006, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the particular person on or after January 1, 2008,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(c) is entitled to claim a rebate under subsection 256.2(3) in respect of any residential unit situated in the complex,

the Minister shall, subject to subsection (7), pay a rebate to the particular person, in addition to the rebate payable under subsection 256.3(2), equal to the amount determined by the formula

A × [0.01 - ((B/A)/7)]

where

A      is the consideration payable for the supply to the particular person of the complex, and

B      is the amount of the rebate under subsection 256.2(3) that the particular person is entitled to claim in respect of the complex.

(3) If a particular person, other than a cooperative housing corporation,

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into on or before May 2, 2006, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the particular person on or after January 1, 2008,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(c) is entitled to claim a rebate under section 259 in respect of the tax referred to in paragraph (b) and is not entitled to claim any input tax credit or any other rebate, other than a rebate under this subsection or under subsection 256.3(3), in respect of that tax,

the Minister shall, subject to subsection (7), pay a rebate to the particular person, in addition to the rebate payable under subsection 256.3(3), equal to the amount determined by the formula

A × [0.01 - ((B/A)/7)]

where

A      is the consideration payable for the supply to the particular person of the complex, and

B      is

(i) in the case where the complex is situated in a participating province, the amount of the rebate under section 259 that the particular person would have been entitled to claim if no tax under subsection 165(2) would have been payable or paid in respect of the complex, and

(ii) in any other case, the amount of the rebate under section 259 that the partic-ular person is entitled to claim in respect of the complex.

(4) If a cooperative housing corporation

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into on or before May 2, 2006, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the corporation on or after January 1, 2008,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(c) is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection, section 256.2, subsection 256.3(4) or section 259 in respect of the tax referred to in paragraph (b),

the Minister shall, subject to subsection (7), pay a rebate to the corporation, in addition to the rebate payable under subsection 256.3(4), equal to the amount determined by the formula

A × [0.01 - ((B/A)/7)]

where

A      is the consideration payable for the supply, and

B      is

(i) if the corporation is entitled to claim a rebate under section 259 in respect of the complex,

(A) in the case where the complex is situated in a participating province, the amount of the rebate under section 259 that the corporation would have been entitled to claim if no tax under subsection 165(2) would have been payable or paid in respect of the complex, and

(B) in any other case, the amount of the rebate under section 259 that the corporation is entitled to claim in respect of the complex,

(ii) 36% of the tax paid under subsection 165(1) by the corporation in respect of the supply if the corporation is not entitled to claim a rebate under section 259 in respect of the complex, and

(A) the corporation is entitled to, or can reasonably expect to be entitled to, claim a rebate under section 256.2 in respect of any residential unit situated in the complex, or

(B) it is the case that, or it can reasonably be expected that, a share of the capital stock of the corporation is or will be sold to an individual for the purpose of using a residential unit in the complex as the primary place of residence of the individual, or of a relation (as defined in subsection 255(1)) of the individual, and that the individual is or will be entitled to claim a rebate under section 255 in respect of the share, and

(iii) in any other case, zero.

(5) If a particular individual

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into on or before May 2, 2006, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the particular individual on or after January 1, 2008,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(c) is entitled to claim a rebate under subsection 254(2) in respect of the complex,

the Minister shall, subject to subsection (7), pay a rebate to the particular individual, in addition to the rebate payable under subsection 256.3(5), equal to the amount determined by the formula

A × [0.01 - ((B/A)/7)]

where

A      is the total of all amounts, each of which is the consideration payable for the supply to the particular individual of the complex or for any other taxable supply to the particular individual of an interest in the complex in respect of which the particular individual has paid tax under subsection 165(1) calculated at the rate of 7%, and

B      is the amount of the rebate under subsection 254(2) that the particular individual is entitled to claim in respect of the complex.

(6) If a supply of a residential complex is made to two or more individuals, the references in subsection (5) to a particular individual shall be read as references to all of those individuals as a group, but only the particular individual that applied for the rebate under section 254 may apply for the rebate under subsection (5).

(7) A rebate under this section in respect of a residential complex shall not be paid to a person, unless the person files an application for the rebate within two years after the day on which ownership of the complex is transferred to the person.

256.71 (1) If

(a) under an agreement, evidenced in writing, entered into on or before May 2, 2006, between a particular person and a builder of a residential complex that is a single unit residential complex or a residential condo-minium unit, the particular person is the recipient of

(i) an exempt supply by way of lease of the land forming part of the complex or an exempt supply of such a lease by way of assignment, and

(ii) an exempt supply by way of sale of the building or part of it in which the residential unit forming part of the complex is situated,

(b) possession of the complex is given to the particular person under the agreement on or after January 1, 2008,

(c) the builder is deemed under subsection 191(1) to have made and received a supply of the complex as a consequence of giving possession of the complex to the particular person under the agreement and to have paid tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(d) the particular person is entitled to claim a rebate under subsection 254.1(2) in respect of the complex,

the Minister shall, subject to subsection (4),

(e) pay a rebate to the particular person, in addition to the rebate payable under subsection 256.4(1), equal to the amount determined by the formula

A × [0.01 - ((B/A)/7)]

where

A      is the amount determined by the formula

C × (100/D)

where

C      is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of the building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex, other than consideration that can reasonably be regarded as rent for the supplies of the land attributable to the complex or as consideration for the supply of an option to purchase that land, and

D      is

(i) if the complex is situated in a participating province, 115, and

(ii) in any other case, 107, and

B      is the amount of the rebate under subsection 254.1(2) that the particular person is entitled to claim in respect of the complex, and

(f) if the builder is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection or under subsection 256.2(4) or 256.4(1), in respect of the tax referred to in paragraph (c), pay a rebate to the builder, in addition to the rebate payable under subsection 256.4(1), equal to the amount determined by the formula

(E - F) × [0.01 - ((G/(E - F))/7)]

where

E      is the fair market value of the complex at the time that the builder is deemed to have made the supply referred to in paragraph (c),

F      is the amount determined for A under paragraph (e), and

G      is the amount of the rebate, if any, that the builder is entitled to claim under subsection 256.2(4).

(2) If

(a) under an agreement, evidenced in writing, entered into on or before May 2, 2006, between a particular person and a builder of a residential complex that is a single unit residential complex or a residential condo-minium unit, the particular person is the recipient of

(i) an exempt supply by way of lease of the land forming part of the complex or an exempt supply of such a lease by way of assignment, and

(ii) an exempt supply by way of sale of the building or part of it in which the residential unit forming part of the complex is situated,

(b) possession of the complex is given to the particular person under the agreement on or after January 1, 2008,

(c) the builder is deemed under subsection 191(1) to have made and received a supply of the complex as a consequence of giving possession of the complex to the particular person under the agreement and to have paid tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(d) the particular person is not entitled to claim a rebate under subsection 254.1(2) in respect of the complex,

the Minister shall, subject to subsection (4),

(e) pay a rebate to the particular person, in addition to the rebate payable under subsection 256.4(2), equal to the amount determined by the formula

A/B

where

A      is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of the building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex, other than consideration that can reasonably be regarded as rent for the supplies of the land attrib-utable to the complex or as consideration for the supply of an option to purchase that land, and

B      is

(i) if the complex is situated in a participating province, 115, and

(ii) in any other case, 107, and

(f) if the builder is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection or under subsection 256.4(2), in respect of the tax referred to in paragraph (c), pay a rebate to the builder, in addition to the rebate payable under subsection 256.4(2), equal to the amount determined by the formula

0.01 × [C - (D × (100/E))]

where

C      is the fair market value of the complex at the time the builder is deemed to have made the supply referred to in paragraph (c),

D      is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of the building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex, other than consideration that can reasonably be regarded as rent for the supplies of the land attrib-utable to the complex or as consideration for the supply of an option to purchase that land, and

E      is

(i) if the complex is situated in a participating province, 115, and

(ii) in any other case, 107.

(3) If the supplies described in subsection (1) or (2) are made to two or more individuals, the references in that subsection to a particular person shall be read as references to all of those individuals as a group, but, in the case of a rebate where paragraph (1)(e) applies, only the individual that applied for the rebate under section 254.1 may apply for the rebate under subsection (1).

(4) A rebate under this section in respect of a residential complex shall not be paid to a person, unless the person files an application for the rebate within two years after

(a) in the case of a rebate to a person other than the builder of the complex, the day on which possession of the complex is transferred to the person; and

(b) in the case of a rebate to the builder of the complex, the end of the month in which the tax referred to in paragraph (1)(c) or (2)(c) is deemed to have been paid by the builder.

256.72 (1) Where

(a) under an agreement, evidenced in writing, entered into between a particular person and a builder of a residential complex, other than a single unit residential complex or a residential condominium unit, or an addition to it, the particular person is the recipient of

(i) an exempt supply by way of lease of the land forming part of the complex or an exempt supply of such a lease by way of assignment, and

(ii) an exempt supply by way of sale of the building or part of it in which a residential unit forming part of the complex or the addition is situated,

(b) possession of a residential unit forming part of the complex or the addition is given to the particular person under the agreement on or after January 1, 2008,

(c) the builder is deemed under subsection 191(3) or (4) to have made and received a supply of the complex or the addition as a consequence of giving possession

(i) of the residential unit to the particular person under the agreement, or

(ii) of a residential unit forming part of the complex or the addition to another person under an agreement described in paragraph (a) entered into between the other person and the builder,

(d) the builder is deemed to have paid tax under subsection 165(1) in respect of the supply calculated at the rate of 7%, and

(e) if the builder is deemed to have paid the tax referred to in paragraph (d) on or after January 1, 2008, it is the case that the builder and

(i) the particular person entered into the agreement on or before May 2, 2006, or

(ii) a person, other than the particular person, on or before May 2, 2006, entered into an agreement described in paragraph (a) in respect of a residential unit situated in the residential complex or in the addition that the builder is deemed to have supplied (as described in paragraph (c)) and that agreement was not terminated before July 1, 2006,

the Minister shall, subject to subsection (3),

(f) if the particular person is entitled to claim a rebate under subsection 254.1(2) in respect of the complex, pay a rebate to the particular person, in addition to the rebate payable under subsection 256.5(1), equal to the amount determined by the formula

A × [0.01 - ((B/A)/7)]

where

A      is the amount determined by the formula

C × (100/D)

where

C      is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of the building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex or the addition, other than consideration that can reasonably be regarded as rent for the supplies of the land attributable to the complex or as consideration for the supply of an option to purchase that land, and

D      is

(i) if the complex is situated in a participating province, 115, and

(ii) in any other case, 107, and

B      is the amount of the rebate under subsection 254.1 that the particular person is entitled to claim in respect of the complex, and

(g) if the particular person is not entitled to claim a rebate under subsection 254.1(2) in respect of the complex, pay a rebate to the particular person, in addition to the rebate payable under subsection 256.5(1), equal to the amount determined by the formula

E/F

where

E      is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of a building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex or the addition, other than consideration that can reasonably be regarded as rent for the supplies of the land attributable to the complex or as consideration for the supply of an option to purchase that land, and

F      is

(i) if the complex is situated in a participating province, 115, and

(ii) in any other case, 107.

(2) If the supplies described in subsection (1) are made to two or more individuals, the references in that subsection to a particular person shall be read as references to all of those individuals as a group, but, in the case of a rebate under paragraph (1)(f), only the individ-ual that applied for the rebate under section 254.1 may apply for the rebate under that paragraph.

(3) A rebate under this section in respect of a residential complex shall not be paid to a person, unless the person files an application for the rebate within two years after the day on which possession of the unit referred to in paragraph (1)(b) is transferred to the person.

256.73 (1) If

(a) under an agreement, evidenced in writing, entered into between a particular person and a builder of a residential complex, other than a single unit residential complex or a residential condominium unit, or an addition to it, the particular person is the recipient of

(i) an exempt supply by way of lease of the land forming part of the complex or a supply of such a lease by way of assignment, and

(ii) an exempt supply by way of sale of the building or part of it in which a residential unit forming part of the complex or the addition is situated,

(b) the builder is deemed under subsection 191(3) or (4) to have made and received on or after January 1, 2008, a supply of the complex or the addition as a consequence of giving possession

(i) of the residential unit to the particular person under the agreement, or

(ii) of a residential unit forming part of the complex or the addition to another person under an agreement described in paragraph (a) entered into between the other person and the builder,

(c) the builder and

(i) the particular person entered into the agreement on or before May 2, 2006, or

(ii) a person, other than the particular person, on or before May 2, 2006, entered into an agreement described in paragraph (a) in respect of a residential unit situated in the residential complex or in the addition that the builder is deemed to have supplied (as described in paragraph (b)) and that agreement was not terminated before July 1, 2006,

(d) the builder is deemed to have paid tax under subsection 165(1) in respect of the supply referred to in paragraph (b) calculated at the rate of 7%, and

(e) the builder is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection or under subsection 256.2(4) or 256.6(1), in respect of the tax referred to in paragraph (d),

the Minister shall, subject to subsection (2), pay a rebate to the builder, in addition to the rebate payable under subsection 256.6(1), equal to the amount determined by the formula

A × [0.01 - ((B/A)/7)]

where

A      is the amount determined by the formula

C - [D × (100/E)]

where

C      is the fair market value of the complex or, if the builder is deemed to have made a supply of an addition, of the addition, at the time the builder is deemed to have made the supply referred to in paragraph (b),

D      is

(i) if the builder is deemed to have made a supply of a complex, the total of all amounts, each of which is the consideration payable by a person to the builder for the supply by way of sale to the person of the building or part of it forming part of the complex or of any other structure that forms part of the complex, or

(ii) if the builder is deemed to have made a supply of an addition, the total of all amounts, each of which is the consideration payable by a person to the builder for the supply by way of sale to the person of the building or part of it forming part of the addition or of any other structure that forms part of the addition, and

E      is

(i) if the complex is situated in a participating province, 115, and

(ii) in any other case, 107, and

B      is the rebate, if any, under subsection 256.2(4) that the builder is entitled to claim in respect of the complex or, if the builder is deemed to have made a supply of an addition, the addition.

(2) A rebate under this section in respect of a residential complex or an addition to it shall not be paid to a builder, unless the builder files an application for the rebate within two years after the end of the month in which tax referred to in subsection (1) is deemed to have been paid by the builder.

256.74 (1) If a particular person, other than a cooperative housing corporation,

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into after May 2, 2006, but on or before October 30, 2007, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the particular person on or after January 1, 2008,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 6%, and

(c) is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection, in respect of the tax referred to in paragraph (b),

the Minister shall, subject to subsection (7), pay a rebate to the particular person equal to 1% of the value of the consideration for the supply.

(2) If a particular person, other than a cooperative housing corporation,

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into after May 2, 2006, but on or before October 30, 2007, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the particular person on or after January 1, 2008,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 6%, and

(c) is entitled to claim a rebate under subsection 256.2(3) in respect of any residential unit situated in the complex,

the Minister shall, subject to subsection (7), pay a rebate to the particular person equal to the amount determined by the formula

A × [0.01 - ((B/A)/6)]

where

A      is the consideration payable for the supply to the particular person of the complex, and

B      is the amount of the rebate under subsection 256.2(3) that the particular person is entitled to claim in respect of the complex.

(3) If a particular person, other than a cooperative housing corporation,

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into after May 2, 2006, but on or before October 30, 2007, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the particular person on or after January 1, 2008,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 6%, and

(c) is entitled to claim a rebate under section 259 in respect of the tax referred to in paragraph (b) and is not entitled to claim any input tax credit or any other rebate, other than a rebate under this subsection, in respect of that tax,

the Minister shall, subject to subsection (7), pay a rebate to the particular person equal to the amount determined by the formula

A × [0.01 - ((B/A)/6)]

where

A      is the consideration payable for the supply to the particular person of the complex, and

B      is

(i) in the case where the complex is situated in a participating province, the amount of the rebate under section 259 that the particular person would have been entitled to claim if no tax under subsection 165(2) would have been payable or paid in respect of the complex, and

(ii) in any other case, the amount of the rebate under section 259 that the partic-ular person is entitled to claim in respect of the complex.

(4) If a cooperative housing corporation

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into after May 2, 2006, but on or before October 30, 2007, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the corporation on or after January 1, 2008,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 6%, and

(c) is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection or under section 256.2 or 259, in respect of the tax referred to in paragraph (b),

the Minister shall, subject to subsection (7), pay a rebate to the corporation equal to the amount determined by the formula

A × [0.01 - ((B/A)/6)]

where

A      is the consideration payable for the supply, and

B      is

(i) if the corporation is entitled to claim a rebate under section 259 in respect of the complex,

(A) in the case where the complex is situated in a participating province, the amount of the rebate under section 259 that the corporation would have been entitled to claim if no tax under subsection 165(2) would have been payable or paid in respect of the complex, and

(B) in any other case, the amount of the rebate under section 259 that the corporation is entitled to claim in respect of the complex,

(ii) 36% of the tax paid under subsection 165(1) by the corporation in respect of the supply if the corporation is not entitled to claim a rebate under section 259 in respect of the complex, and

(A) the corporation is entitled to, or can reasonably expect to be entitled to, claim a rebate under section 256.2 in respect of any residential unit situated in the complex, or

(B) it is the case that, or it can reasonably be expected that, a share of the capital stock of the corporation is or will be sold to an individual for the purpose of using a residential unit in the complex as the primary place of residence of the individual, or of a relation (as defined in subsection 255(1)) of the individual, and that the individual is or will be entitled to claim a rebate under section 255 in respect of the share, and

(iii) in any other case, zero.

(5) If a particular individual

(a) pursuant to an agreement of purchase and sale, evidenced in writing, entered into after May 2, 2006, but on or before October 30, 2007, is the recipient of a taxable supply by way of sale from another person of a residential complex in respect of which ownership and possession under the agreement are transferred to the particular individ-ual on or after January 1, 2008,

(b) has paid all of the tax under subsection 165(1) in respect of the supply calculated at the rate of 6%, and

(c) is entitled to claim a rebate under subsection 254(2) in respect of the complex,

the Minister shall, subject to subsection (7), pay a rebate to the particular individual equal to the amount determined by the formula

A × [0.01 - ((B/A)/6)]

where

A      is the total of all amounts, each of which is the consideration payable for the supply to the particular individual of the complex or for any other taxable supply to the particular individual of an interest in the complex in respect of which the particular individual has paid tax under subsection 165(1) calculated at the rate of 6%, and

B      is the amount of the rebate under subsection 254(2) that the particular individual is entitled to claim in respect of the complex.

(6) If a supply of a residential complex is made to two or more individuals, the references in subsection (5) to a particular individual shall be read as references to all of those individuals as a group, but only the particular individual that applied for the rebate under section 254 may apply for the rebate under subsection (5).

(7) A rebate under this section in respect of a residential complex shall not be paid to a person, unless the person files an application for the rebate within two years after the day on which ownership of the complex is transferred to the person.

256.75 (1) If

(a) under an agreement, evidenced in writing, entered into after May 2, 2006, but on or before October 30, 2007, between a particular person and a builder of a residential complex that is a single unit residential complex or a residential condominium unit, the particular person is the recipient of

(i) an exempt supply by way of lease of the land forming part of the complex or an exempt supply of such a lease by way of assignment, and

(ii) an exempt supply by way of sale of the building or part of it in which the residential unit forming part of the complex is situated,

(b) possession of the complex is given to the particular person under the agreement on or after January 1, 2008,

(c) the builder is deemed under subsection 191(1) to have made and received a supply of the complex as a consequence of giving possession of the complex to the particular person under the agreement and to have paid tax under subsection 165(1) in respect of the supply calculated at the rate of 6%, and

(d) the particular person is entitled to claim a rebate under subsection 254.1(2) in respect of the complex,

the Minister shall, subject to subsection (4),

(e) pay a rebate to the particular person equal to the amount determined by the formula

A × [0.01 - ((B/A)/6)]

where

A      is the amount determined by the formula

C × (100/D)

where

C      is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of the building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex, other than consideration that can reasonably be regarded as rent for the supplies of the land attributable to the complex or as consideration for the supply of an option to purchase that land, and

D      is

(i) if the complex is situated in a participating province, 114, and

(ii) in any other case, 106, and

B      is the amount of the rebate under subsection 254.1(2) that the particular person is entitled to claim in respect of the complex, and

(f) if the builder is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection or under subsection 256.2(4), in respect of the tax referred to in paragraph (c), pay a rebate to the builder equal to the amount determined by the formula

(E - F) × [0.01 - ((G/(E - F))/6)]

where

E      is the fair market value of the complex at the time that the builder is deemed to have made the supply referred to in paragraph (c),

F      is the amount determined for A under paragraph (e), and

G      is the amount of the rebate, if any, that the builder is entitled to claim under subsection 256.2(4).

(2) If

(a) under an agreement, evidenced in writing, entered into after May 2, 2006, but on or before October 30, 2007, between a particular person and a builder of a residential complex that is a single unit residential complex or a residential condominium unit, the particular person is the recipient of

(i) an exempt supply by way of lease of the land forming part of the complex or an exempt supply of such a lease by way of assignment, and

(ii) an exempt supply by way of sale of the building or part of it in which the residential unit forming part of the complex is situated,

(b) possession of the complex is given to the particular person under the agreement on or after January 1, 2008,

(c) the builder is deemed under subsection 191(1) to have made and received a supply of the complex as a consequence of giving possession of the complex to the particular person under the agreement and to have paid tax under subsection 165(1) in respect of the supply calculated at the rate of 6%, and

(d) the particular person is not entitled to claim a rebate under subsection 254.1(2) in respect of the complex,

the Minister shall, subject to subsection (4),

(e) pay a rebate to the particular person equal to the amount determined by the formula

A/B

where

A      is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of the building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex, other than consideration that can reasonably be regarded as rent for the supplies of the land attribut-able to the complex or as consideration for the supply of an option to purchase that land, and

B      is

(i) if the complex is situated in a participating province, 114, and

(ii) in any other case, 106, and

(f) if the builder is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection, in respect of the tax referred to in paragraph (c), pay a rebate to the builder equal to the amount determined by the formula

0.01 × [C - (D × (100/E))]

where

C      is the fair market value of the complex at the time the builder is deemed to have made the supply referred to in paragraph (c),

D      is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of the building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex, other than consideration that can reasonably be regarded as rent for the supplies of the land attribut-able to the complex or as consideration for the supply of an option to purchase that land, and

E      is

(i) if the complex is situated in a participating province, 114, and

(ii) in any other case, 106.

(3) If the supplies described in subsection (1) or (2) are made to two or more individuals, the references in that subsection to a particular person shall be read as references to all of those individuals as a group, but, in the case of a rebate where paragraph (1)(e) applies, only the individual that applied for the rebate under section 254.1 may apply for the rebate under subsection (1).

(4) A rebate under this section in respect of a residential complex shall not be paid to a person, unless the person files an application for the rebate within two years after

(a) in the case of a rebate to a person other than the builder of the complex, the day on which possession of the complex is transferred to the person; and

(b) in the case of a rebate to the builder of the complex, the end of the month in which the tax referred to in paragraph (1)(c) or (2)(c) is deemed to have been paid by the builder.

256.76 (1) Where

(a) under an agreement, evidenced in writing, entered into between a particular person and a builder of a residential complex, other than a single unit residential complex or a residential condominium unit, or an addition to it, the particular person is the recipient of

(i) an exempt supply by way of lease of the land forming part of the complex or an exempt supply of such a lease by way of assignment, and

(ii) an exempt supply by way of sale of the building or part of it in which a residential unit forming part of the complex or the addition is situated,

(b) possession of a residential unit forming part of the complex or the addition is given to the particular person under the agreement on or after January 1, 2008,

(c) the builder is deemed under subsection 191(3) or (4) to have made and received a supply of the complex or the addition as a consequence of giving possession

(i) of the residential unit to the particular person under the agreement, or

(ii) of a residential unit forming part of the complex or the addition to another person under an agreement described in paragraph (a) entered into between the other person and the builder,

(d) the builder is deemed to have paid tax under subsection 165(1) in respect of the supply calculated at the rate of 6%, and

(e) if the builder is deemed to have paid the tax referred to in paragraph (d) on or after January 1, 2008, it is the case that the builder and

(i) the particular person entered into the agreement after May 2, 2006, but on or before October 30, 2007, or

(ii) a person, other than the particular person, after May 2, 2006, but on or before October 30, 2007, entered into an agreement described in paragraph (a) in respect of a residential unit situated in the residential complex or in the addition that the builder is deemed to have supplied (as described in paragraph (c)) and that agreement was not terminated before January 1, 2008,

the Minister shall, subject to subsection (3),

(f) if the particular person is entitled to claim a rebate under subsection 254.1(2) in respect of the complex, pay a rebate to the particular person equal to the amount determined by the formula

A × [0.01 - ((B/A)/6)]

where

A      is the amount determined by the formula

C × (100/D)

where

C      is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of the building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex or the addition, other than consideration that can reasonably be regarded as rent for the supplies of the land attributable to the complex or as consideration for the supply of an option to purchase that land, and

D      is

(i) if the complex is situated in a participating province, 114, and

(ii) in any other case, 106, and

B      is the amount of the rebate under section 254.1 that the particular person is entitled to claim in respect of the complex, and

(g) if the particular person is not entitled to claim a rebate under subsection 254.1(2) in respect of the complex, pay a rebate to the particular person equal to the amount determined by the formula

E/F

where

E      is the total of all amounts, each of which is the consideration payable by the particular person to the builder for the supply by way of sale to the particular person of the building or part of a building referred to in subparagraph (a)(ii) or of any other structure that forms part of the complex or the addition, other than consideration that can reasonably be regarded as rent for the supplies of the land attributable to the complex or as consideration for the supply of an option to purchase that land, and

F      is

(i) if the complex is situated in a participating province, 114, and

(ii) in any other case, 106.

(2) If the supplies described in subsection (1) are made to two or more individuals, the references in that subsection to a particular person shall be read as references to all of those individuals as a group, but, in the case of a rebate under paragraph (1)(f), only the individ-ual that applied for the rebate under section 254.1 may apply for the rebate under that paragraph.

(3) A rebate under this section in respect of a residential complex shall not be paid to a person, unless the person files an application for the rebate within two years after the day on which possession of the unit referred to in paragraph (1)(b) is transferred to the person.

256.77 (1) If

(a) under an agreement, evidenced in writing, entered into between a particular person and a builder of a residential complex, other than a single unit residential complex or a residential condominium unit, or an addition to it, the particular person is the recipient of

(i) an exempt supply by way of lease of the land forming part of the complex or a supply of such a lease by way of assignment, and

(ii) an exempt supply by way of sale of the building or part of it in which a residential unit forming part of the complex or the addition is situated,

(b) the builder is deemed under subsection 191(3) or (4) to have made and received on or after January 1, 2008, a supply of the complex or the addition as a consequence of giving possession

(i) of the residential unit to the particular person under the agreement, or

(ii) of a residential unit forming part of the complex or the addition to another person under an agreement described in paragraph (a) entered into between the other person and the builder,

(c) the builder and

(i) the particular person entered into the agreement after May 2, 2006, but on or before October 30, 2007, or

(ii) a person, other than the particular person, after May 2, 2006, but on or before October 30, 2007, entered into an agreement described in paragraph (a) in respect of a residential unit situated in the residential complex or in the addition that the builder is deemed to have supplied (as described in paragraph (b)) and that agreement was not terminated before January 1, 2008,

(d) the builder is deemed to have paid tax under subsection 165(1) in respect of the supply referred to in paragraph (b) calculated at the rate of 6%, and

(e) the builder is not entitled to claim an input tax credit or a rebate, other than a rebate under this subsection or under subsection 256.2(4), in respect of the tax referred to in paragraph (d),

the Minister shall, subject to subsection (2), pay a rebate to the builder equal to the amount determined by the formula

A × [0.01 - ((B/A)/6)]

where

A      is the amount determined by the formula

C - [D × (100/E)]

where

C      is the fair market value of the complex or, if the builder is deemed to have made a supply of an addition, of the addition, at the time the builder is deemed to have made the supply referred to in paragraph (b),

D      is

(i) if the builder is deemed to have made a supply of a complex, the total of all amounts, each of which is the consideration payable by a person to the builder for the supply by way of sale to the person of the building or part of it forming part of the complex or of any other structure that forms part of the complex, or

(ii) if the builder is deemed to have made a supply of an addition, the total of all amounts, each of which is the consideration payable by a person to the builder for the supply by way of sale to the person of the building or part of it forming part of the addition or of any other structure that forms part of the addition, and

E      is

(i) if the complex is situated in a participating province, 114, and

(ii) in any other case, 106, and

B      is the rebate, if any, under subsection 256.2(4) that the builder is entitled to claim in respect of the complex or, if the builder is deemed to have made a supply of an addition, the addition.

(2) A rebate under this section in respect of a residential complex or an addition to it shall not be paid to a builder, unless the builder files an application for the rebate within two years after the end of the month in which tax referred to in subsection (1) is deemed to have been paid by the builder.

(2) Subsection (1) comes into force, or is deemed to have come into force, on January 1, 2008.

195. (1) The Act is amended by adding the following after section 274.1:

274.11 If

(a) at any time before January 1, 2008, a supplier and a recipient enter into an agreement for a taxable supply of property or a service,

(b) the supplier and the recipient at a later time either directly or indirectly

(i) vary or alter the agreement for the supply, or

(ii) terminate the agreement and enter into one or more new agreements with each other or with other persons and under one or more of those agreements the supplier supplies, and the recipient receives, one or more supplies that includes all or substantially all the property or service referred to in paragraph (a),

(c) the supplier, the recipient and, where applicable, the other persons are not dealing with each other at arm’s length at the time the agreement is entered into or at the later time,

(d) tax under subsection 165(1) or section 218 in respect of the supply referred to in paragraph (a) would have been calculated at the rate of 6% or 7%, as the case may be, on all or part of the value of the consideration for the supply attributable to the property or service in the absence of the variation, alteration or termination of the agreement,

(e) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements would, in the absence of this section, be calculated at the rate of 5% on any part of the value of the consideration for the supply, attributable to any part of the property or service, on which tax, in respect of the supply referred to in paragraph (a), was initially calculated at the rate of 6% or 7%, as the case may be, and

(f) the variation or alteration of the agreement or the entering into of the new agreements may not reasonably be considered for both the supplier and the recipient to have been undertaken or arranged primarily for bona fide purposes other than to benefit in any manner from the rate change,

the following rule applies

(g) tax under subsection 165(1) or section 218 in respect of the supply made under the varied or altered agreement or made under any of the new agreements shall be calculated at the rate at which tax would have been calculated under paragraph (d) on any part of the value of the consideration, referred to in paragraph (e), attributable to any part of the property or service.

(2) Subsection (1) applies to any agreement varied, altered, terminated or entered into on or after October 30, 2007.