Budget Implementation Act, 2004, No. 2 (S.C. 2005, c. 19)
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Assented to 2005-05-13
Budget Implementation Act, 2004, No. 2
S.C. 2005, c. 19
Assented to 2005-05-13
A second Act to implement certain provisions of the budget tabled in Parliament on March 23, 2004
SUMMARY
Part 1 of this enactment amends the Air Travellers Security Charge Act to reduce the amounts charged to airline passengers under that Act.
Part 2 amends the First Nations Goods and Services Tax Act to facilitate the establishment of taxation arrangements between the Government of Quebec and interested Indian Bands situated in Quebec.
Part 3 amends the Income Tax Act and related Acts to
– introduce a new disability supports deduction;
– improve the recognition of medical expenses for caregivers;
– expand the Education Tax Credit to apply to the cost of an otherwise eligible course taken, without any reimbursement, in connection with an office or employment;
– accelerate to 2005 the increase in the small business deduction threshold to $300,000;
– ensure that unconnected small businesses engaging in R&D do not have to share access to the enhanced 35% scientific research and experimental development tax credit solely because they receive investments from the same venture capital investors;
– extend the carry-forward period for business losses to 10 years;
– extend the expiry date for the mineral exploration tax credit to the end of 2005;
– eliminate the deductibility of fines and penalties;
– impose a tax liability on gains from dispositions of taxable Canadian property, and certain otherwise non-taxable amounts, distributed by a mutual fund trust to non-residents;
– ensure that the General Anti-Avoidance Rules in the Income Tax Act apply to transactions effected through a misuse or abuse of the Income Tax Regulations, a tax treaty or other federal legislation;
– extend the rules governing transactions between affiliated persons to transactions entered into by trusts;
– constrain the ability of persons, other than cooperative corporations and credit unions, to deduct patronage dividends;
– limit the period, during which taxpayers may open up old income tax returns, to 10 years;
– prevent the use of schemes designed to sell otherwise unusable charitable donations tax credits;
– introduce a new regulatory regime for Registered Charities;
– introduce tax relief for Canadian Forces personnel and police deployed to international high-risk operational missions;
– allow for certain notices made to federally regulated financial institutions to be binding if made to a designated branch of the institution; and
– clarify, in conjunction with income tax sharing agreements with Aboriginal governments, that penalties imposed under the Income Tax Act are to be determined on the basis of the amount of one’s federal tax liability before taking any such tax sharing agreement into account.
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
SHORT TITLE
1. This Act may be cited as the Budget Implementation Act, 2004, No. 2.
PART 12002, c. 9, s. 5AMENDMENTS TO THE AIR TRAVELLERS SECURITY CHARGE ACT
Marginal note:2003, c. 15, s. 44(1)
2. (1) The portion of paragraph 12(1)(a) of the Air Travellers Security Charge Act before subparagraph (i) is replaced by the following:
(a) $5.61 for each chargeable emplanement included in the service, to a maximum of $11.22, if
Marginal note:2003, c. 15, s. 44(1)
(2) The portion of paragraph 12(1)(b) of the Act before subparagraph (i) is replaced by the following:
(b) $6.00 for each chargeable emplanement included in the service, to a maximum of $12.00, if
Marginal note:2003, c. 15, s. 44(1)
(3) The portion of paragraph 12(1)(c) of the Act before subparagraph (i) is replaced by the following:
(c) $9.35 for each chargeable emplanement included in the service, to a maximum of $18.69, if
Marginal note:2003, c. 15, s. 44(1)
(4) The portion of paragraph 12(1)(d) of the Act before subparagraph (i) is replaced by the following:
(d) $10.00 for each chargeable emplanement included in the service, to a maximum of $20.00, if
Marginal note:2003, c. 15, s. 44(1)
(5) Paragraph 12(1)(e) of the Act is replaced by the following:
(e) $20.00, if the service includes transportation to a destination outside the continental zone.
(6) The portion of paragraph 12(2)(a) of the Act before subparagraph (i) is replaced by the following:
(a) $9.35 for each chargeable emplanement by an individual on an aircraft used to transport the individual to a destination outside Canada but within the continental zone, to a maximum of $18.69, if
(7) The portion of paragraph 12(2)(b) of the Act before subparagraph (i) is replaced by the following:
(b) $10.00 for each chargeable emplanement by an individual on an aircraft used to transport the individual to a destination outside Canada but within the continental zone, to a maximum of $20.00, if
(8) Paragraph 12(2)(c) of the Act is replaced by the following:
(c) $20.00, if the service includes transportation to a destination outside the continental zone.
(9) Subsections (1) to (8) apply in respect of any air transportation service that includes a chargeable emplanement on or after April 1, 2004 and for which any consideration is paid or becomes payable on or after April 1, 2004.
PART 22003, c. 15, s. 67AMENDMENTS TO THE FIRST NATIONS GOODS AND SERVICES TAX ACT
3. (1) The definitions “administration agreement”, “governing body” and “lands” in subsection 2(1) of the First Nations Goods and Services Tax Act are replaced by the following:
“administration agreement”
« accord d’application »
“administration agreement”, in Part 1, means an agreement referred to in subsection 5(2) and, in Part 2, means an agreement referred to in section 22.
“governing body”
« corps dirigeant »
“governing body” means the body of a first nation that is identified opposite the name of the first nation listed in Schedule 1.
“lands”
« terres »
“lands”, of a first nation, means the lands that are described opposite the name of the first nation listed in Schedule 1.
(2) Subsections 2(2) and (3) of the Act are replaced by the following:
Marginal note:Expressions defined in s. 123(1) of the Excise Tax Act
(2) Unless a contrary intention appears, words and expressions used in Part 1 have the meanings assigned by subsection 123(1) of the Excise Tax Act.
Marginal note:Mobile home or floating home
(3) A mobile home or floating home is deemed to be tangible personal property for the purposes of applying the provisions of Part 1 and any first nation law, as defined in subsection 11(1) or 12(1), in respect of the bringing of tangible personal property onto the lands of a first nation.
4. The Act is amended by adding the following after section 2:
PART 1FIRST NATIONS GOODS AND SERVICES TAX ACT
5. Subsection 3(2) of the Act is replaced by the following:
Marginal note:Section 89 of the Indian Act
(1.1) A first nation law, as defined in subsection 11(1) or 12(1), or an obligation to pay an amount that arises from the application of section 14, may be administered and enforced by Her Majesty in right of Canada or by an agent of the first nation despite section 89 of the Indian Act.
Marginal note:Subsection 4(1) applies despite any other Act of Parliament
(2) The governing body of a first nation listed in Schedule 1 may enact a law under subsection 4(1) that imposes a tax despite any other Act of Parliament that limits the authority of the first nation to enact a law that imposes a tax.
6. (1) The portion of subsection 4(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Authority to impose tax
4. (1) Subject to this section, the governing body of a first nation that is listed in Schedule 1 and that is a band or has the power to enact laws that has been recognized or granted under any other Act of Parliament or under an agreement that has been given effect by any other Act of Parliament may enact a law that imposes
(2) The portion of subsection 4(2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Supply made on lands
(2) For the purposes of subsection (1), a supply, other than an imported taxable supply, is made on the lands of a first nation only if at least one of the following conditions is met:
(3) The portion of subsection 4(4) of the Act before paragraph (a) is replaced by the following:
Marginal note:Imported taxable supply made on lands
(4) For the purposes of paragraph (1)(c), an imported taxable supply is made on the lands of a first nation only if at least one of the following conditions is met:
(4) The portion of subsection 4(6) of the Act before paragraph (a) is replaced by the following:
Marginal note:Exception
(6) For the purposes of paragraph (1)(b), a tax in respect of the bringing of property onto the lands of a first nation by a person shall not be imposed if
(5) Subsection 4(7) of the Act is replaced by the following:
Marginal note:Carriers
(7) For the purposes of this Part, if a particular person brings property onto the lands of a first nation on behalf of another person, the other person, and not the particular person, is deemed to have brought the property onto those lands.
7. (1) Paragraphs 11(3)(a) and (b) of the Act are replaced by the following:
(a) every provision of Part IX of the Excise Tax Act (other than a provision that creates a criminal offence) applies, with any modifications that the circumstances require, for the purposes of the first nation law as if tax referred to in each of paragraphs 4(1)(a) and (c) imposed under the first nation law were imposed under subsection 165(1) and section 218 of the Excise Tax Act respectively and, subject to subsection 4(9), as if tax referred to in paragraph 4(1)(b) imposed under the first nation law were imposed under subsection 220.05(1) of the Excise Tax Act in respect of the bringing of property into a participating province, but the first nation law shall not thereby be construed as imposing a tax except as provided in section 4;
(b) the first nation law applies as if tax imposed under Part IX of the Excise Tax Act were imposed under the first nation law and as if the provisions of that Part (other than a provision that creates a criminal offence) relating to that tax were included in the first nation law, but the first nation law shall not thereby be construed as imposing a tax except as provided in section 4;
(2) Paragraph 11(3)(e) of the Act is amended by striking out the word “and” at the end of subparagraph (vi), by adding the word “and” at the end of subparagraph (vii) and by adding the following after subparagraph (vii):
(viii) nothing in this Part shall be construed as conferring on a governing body the power to make an enactment in respect of criminal law.
8. (1) Subsection 12(1) of the Act is replaced by the following:
Meaning of “first nation law”
12. (1) In this section, “first nation law” means a law enacted by the governing body of a first nation listed in Schedule 1 under a power recognized or granted under any other Act of Parliament or an agreement that has been given effect by any other Act of Parliament, if that law and its application are consistent with subsections 4(1) to (10), paragraphs 11(3)(a) and (b) and subparagraphs 11(3)(e)(i) to (iii), (v) and (viii).
(2) Subsection 12(3) of the Act is replaced by the following:
Marginal note:Cessation of agreement
(3) If an administration agreement in respect of a first nation law ceases to have effect at any time, this Part applies after that time in respect of the first nation law as if the first nation law had been repealed at that time.
9. Section 15 of the Act is replaced by the following:
Marginal note:Amendment of Schedule 1
15. The Governor in Council may, by order, amend Schedule 1 by adding, deleting or varying the name of any first nation or of the governing body of any first nation or the description of the lands of any first nation.
10. The Act is amended by adding the following after section 16:
PART 2FIRST NATIONS SALES TAX — QUEBEC
Interpretation
Marginal note:Definitions
17. The following definitions apply in this Part and in Schedule 2.
“band law”
« texte législatif de bande »
“band law” means a law enacted by a council of the band under section 23.
“council of the band”
« conseil de bande »
“council of the band” has the same meaning as in subsection 2(1) of the Indian Act.
“direct”
« directe »
“direct” has the same meaning, for the purpose of distinguishing between a direct and an indirect tax, as in class 2 of section 92 of the Constitution Act, 1867.
“parallel Quebec law”
« loi québécoise parallèle »
“parallel Quebec law”, in respect of a band law, means the enactment, or those provisions of it, of Quebec to which the band law is similar.
“reserves in Quebec”
« réserves au Québec »
“reserves in Quebec”, of a band, means the reserves within Quebec that are described opposite the name of that band listed in Schedule 2.
“sales tax”
« taxe de vente »
“sales tax” means any tax of general application payable on a value, price or quantity basis by a person in respect of the sale, rental, supply, consumption or use of a property or service.
Application of Other Acts
Marginal note:Section 87 of the Indian Act and similar provisions
18. (1) The obligation to pay tax or any other amount that is required to be paid under a band law applies despite the application of the exemption under section 87 of the Indian Act and of any other exemption from taxation under any other Act of Parliament that is similar to the exemption under that section.
Marginal note:Section 89 of the Indian Act
(2) A band law may be administered and enforced by an agent of the band despite section 89 of the Indian Act.
Marginal note:Not subject to Statutory Instruments Act
19. A band law is not subject to the Statutory Instruments Act.
Marginal note:Application of section 23
20. A council of the band may enact a band law despite any other Act of Parliament that limits the authority of the council of the band to enact a law that imposes a tax.
Marginal note:Application of other Acts
21. If a law of Quebec provides that one or more laws of Quebec apply as if the tax imposed under a band law were imposed under a particular law of Quebec, all Acts of Parliament, other than this Act, apply as if the tax imposed under the band law were imposed under that particular law of Quebec.
Administration Agreement
Marginal note:Authority to enter into agreement
22. A council of the band may, on behalf of the band, enter into an administration agreement with the Government of Quebec in respect of a band law enacted by that council.
Delegation
Marginal note:Authority to impose a direct sales tax
23. (1) A council of the band that is listed in Schedule 2 may enact a law that imposes, within the reserves of the band in Quebec, a direct sales tax and any other amount that may be required to be paid in relation to the imposition of that direct sales tax.
Marginal note:Parallel Quebec law
(2) A law may not be enacted under subsection (1) unless the law has only one parallel Quebec law that is expressly identified in that law.
Marginal note:Force of law
(3) A law enacted under subsection (1) does not have the force of law unless
(a) an administration agreement between the council of the band and the Government of Quebec in respect of the law is in effect;
(b) the law is administered and enforced, and the direct sales tax imposed under that law is collected, in accordance with that administration agreement;
(c) the band, the council of the band and the band’s reserves in Quebec are listed in Schedule 2; and
(d) its parallel Quebec law is in force.
Marginal note:Conformity with Indian Act
(4) A law enacted under subsection (1) is valid only if the power of the council of the band to enact the law is exercised in conformity with paragraph 2(3)(b) of the Indian Act and no such law is invalid by reason of any defect in form.
Marginal note:Criminal law exclusion
(5) Nothing in this Part shall be construed as conferring on a council of the band the power to make an enactment in respect of criminal law.
Marginal note:Coming into force — law under section 23
24. Subject to subsection 23(3), a band law comes into force on the date specified in an administration agreement with the Government of Quebec in respect of that law.
Marginal note:Proof of law
25. A copy of a band law is, if it is certified to be a true copy by the Minister or a person authorized by the Minister, evidence that the law was duly enacted by the council of the band without proof of the signature or official character of the Minister or the person authorized by the Minister.
Marginal note:Publication of law
26. A council of the band shall on demand provide a copy of any band law enacted by that council and shall publish a copy of every such law in a newspaper that has general circulation in the place where the law applies and in the First Nations Gazette, but no such law shall be invalid by reason of a failure to publish it.
Marginal note:Expenditures
27. The power of a council of the band to expend moneys received by the council under an administration agreement is validly exercised only if the power is exercised in conformity with paragraph 2(3)(b) of the Indian Act.
Marginal note:Indian moneys
28. Moneys raised under a band law are not Indian moneys within the meaning of subsection 2(1) of the Indian Act.
General
Marginal note:Amendment of Schedule 2
29. The Governor in Council may, by order, amend Schedule 2 by adding, deleting or varying the name of a band, a council of the band or the description of a band’s reserves in Quebec.
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