Helping Ontario Families and Managing Responsibly Act, 2010, S.O. 2010, c. 26 - Bill 135

• Jurisdiction: Ontario
• Date: 08 December 2010
• Bill Number: 135

EXPLANATORY NOTE

This Explanatory Note was written as a reader’s aid to Bill 135 and does not form part of the law. Bill 135 has been enacted as Chapter 26 of the Statutes of Ontario, 2010.

The Bill implements financial measures, including measures contained in the 2010 Ontario Budget, and enacts or amends various Acts. The major elements of the Bill are described below.

Schedule 1
alcohol and gaming regulation and public protection act, 1996

Amendments to the Alcohol and Gaming Regulation and Public Protection Act, 1996 establish transitional rules that apply whenever the basic rate of tax on beer is increased. Amendments to the Act also address other matters. Here are some details of the amendments to the Act.

Amendments to sections 17, 21, 25 and 30 of the Act establish transitional rules that apply whenever the basic rate of tax on beer is increased. These rules apply with respect to beer in inventory before the increase takes effect that is sold to a purchaser after the increase takes effect. A definition of “increase date” is added to subsection 17 (1) of the Act. New subsection 21 (4) of the Act provides that the tax payable for the beer by the purchaser is calculated at the tax rate in effect immediately before the increase date. A corresponding amendment is made to section 25 of the Act, with respect to tax payable by the purchaser for draft beer. Related amendments are made to section 30 of the Act, concerning the amounts to be collected and remitted to the Minister by beer vendors, authorized beer manufacturers, brew pubs and others.

Currently, subsection 17 (2) of the Act deems wineries to be purchasers of wine that they distribute without charge or purchase but don’t resell. The provision is amended to refer to wine coolers in addition to wine.

Section 22 of the Act provides special rules concerning the basic tax rate that applies to purchases of beer manufactured by microbrewers. Subsection 22 (3) of the Act sets out conditions that a beer manufacturer must meet to be considered a microbrewer for a sales year. An amendment provides that beer manufacturers are not eligible if they have entered into an agreement or arrangement to manufacture beer for non-microbrewers.

Section 26 of the Act provides for an annual adjustment to the basic tax rate that applies to the purchase of beer. Amendments are made to provide that the index factor (one of the components for determining the annual adjustment) cannot be a negative number and must be rounded to the nearest one-thousandth.

New section 31.1 of the Act provides rules that apply if a person sells beer, wine or a wine cooler and receives a payment in lieu of tax payable. Generally, the person is required to treat the payment as tax under the Act and is otherwise subject to the same offences, penalties and fines that would apply if the payment were tax payable. The Minister may use the same remedies and procedures for collecting and enforcing tax payable under the Act. Furthermore, the person who receives the payment is deemed to be a collector for the purposes of Division D of Part II of the Act.

Subsection 38 (3) of the Act currently provides that the Minister of Revenue may require a collector to complete an inventory report that shows all draft beer, non-draft beer, wine and wine coolers in the collector’s possession. New subsection 38 (4) of the Act provides that the Minister may require a class of collectors to complete an inventory report in accordance with subsection 38 (3).

The penalty provided in subsections 41 (3) and (4) of the Act for failing to submit a return is replaced. The penalty is determined with reference to the amount of the tax collectable or payable during the period to which the return relates.

An amendment is made to section 50 of the Act respecting the use of warrants to enforce the obligation to pay tax. Subrule 60.07 (2) of the Rules of Civil Procedure requires that leave of the court be obtained before certain writs are issued. The amendment provides that this rule does not apply for the purposes of section 50.

Technical amendments are also made to the Act.

Schedule 2
assessment ACt

Subsection 3 (1) of the Assessment Act provides that certain types of real property are exempt from taxation under the Act. Paragraph 29 of subsection 3 (1) of the Act exempts certain structures, such as poles and wires, that are owned by power utilities or municipal electricity utilities. Currently, that exemption is available when those structures are located on easements on land that are not owned by power utilities. The amendment deletes that requirement.

Schedule 3
commodity futures act

Section 59 of the Commodity Futures Act authorizes the Ontario Securities Commission to issue a direction for the interim preservation of property or money in certain circumstances. Subsection 59 (5) of the Act currently provides that the Commission must apply to the Superior Court of Justice, no later than seven days after it issues the direction, for an order of the court to continue the direction or for such other order as the court considers appropriate. The re-enactment of the subsection extends the time limit from seven days to 10 days.

Subsection 64 (3) of the Act is re-enacted to make its wording consistent with Crown immunity provisions in other Ontario statutes.

Schedule 4
corporations tax ACt

Section 74.2 of the Corporations Tax Act provides rules relating to tax in respect of benefit plans. Currently, different rules apply for determining tax payable in respect of funded benefit plans and unfunded benefit plans. Amendments are made to allow a funded benefit plan that is a qualifying trust to elect to be treated as if it were an unfunded benefit plan. A qualifying trust is defined as a type of trust prescribed by the regulations. New subsections 74.2 (3.3) and (3.4) of the Act address situations where a benefit plan changes status from unfunded to funded or from funded to unfunded.

An amendment is made to section 102 of the Act respecting the use of warrants to enforce the obligation to pay tax. Subrule 60.07 (2) of the Rules of Civil Procedure requires that leave of the court be obtained before certain writs are issued. The amendment provides that this rule does not apply for the purposes of section 102.

Schedule 5
education ACt

Currently, subsection 247 (1) of the Education Act permits district school boards to borrow money and incur debt for permanent improvements. Subsection 247 (5) of the Act provides rules relating to payments on debt instruments that are issued by boards. The subsection is amended by removing the requirement that payments be made out of a board’s general revenue and the requirement that the board provide for the setting aside of the payments in its estimates for each fiscal year.

References to “deficit” in sections 257.30 and 257.50 of the Act are changed to “accumulated deficit”.

Technical changes are made to the French version of the Act.

Schedule 6
employer health tax ACt

Under section 2 of the Employer Health Tax Act, eligible employers determine their taxable total remuneration paid in Ontario for a year by subtracting an exemption amount provided under subsections 2 (6) and (6.1). An associated group of eligible employers may agree to allocate the exemption amount in accordance with subsections 2 (7) and (7.1). Currently, subsection 2 (8) requires every employer in the group to file a copy of the agreement with their annual return. That subsection is amended to require only one employer to file a copy of the agreement on or before the date that the return is due.

Section 2.1 of the Act, which provided tax relief to eligible employers in respect of tax payable for 1994, 1995 and 1996, is repealed. Related provisions are also repealed (see subsections 3 (4.1) and (4.2) and clauses 38 (1) (j), (k), (l) and (m) of the Act).

Section 5 of the Act sets out requirements relating to annual returns that must delivered for the purposes of the Act. Subsection 5 (3) of the Act, which requires a taxpayer to ensure the veracity of a return, is repealed. New subsection 5 (4.1) of the Act provides that a person who delivers a return, or in respect of whom a return is delivered, must satisfy prescribed requirements in respect of the accuracy and completeness of the return.

Section 8.1 of the Act, which provides rules relating to the disallowance of rebates and the assessment of rebates and refunds, is repealed. Consequential amendments are made to sections 9, 10 and 11 of the Act.

An amendment is made to section 20 of the Act respecting the use of warrants to enforce the obligation to pay tax. Subrule 60.07 (2) of the Rules of Civil Procedure requires that leave of the court be obtained before certain writs are issued. The amendment provides that this rule does not apply for the purposes of section 20.

Clause 38 (1) (h) of the Act, which enables the Lieutenant Governor in Council to make regulations providing for rebates of tax, is repealed. A related amendment is made to subsection 31 (8) of the Act.

Schedule 7
financial administration ACt

A technical amendment is made to the definition of “non-cash expense” in subsection 1 (1) of the Financial Administration Act.

Several amendments are made to section 1.0.10 of the Act, which sets out the authority of Treasury Board to make regulations, subject to the approval of the Lieutenant Governor in Council. New clauses 1.0.10 (c.1) and (c.2) provide for regulations to be made with respect to the accounting policies and practices to be followed by public entities and by other entities whose financial statements are included in the consolidated financial statements of the Province as set out in the Public Accounts. New subsection 1.0.10 (4) provides that a regulation made under either of those new clauses prevails over a requirement of another Act or regulation, if the regulation under the new clause states that it prevails. New...