Vol. 133, No. 42 — October 16, 1999

Regulations Amending the Income Tax Regulations

Statutory Authority

Income Tax Act

Sponsoring Department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

Description

The Income Tax Act contains provisions that allow certain supplementary pension plans maintained by the federal and provincial governments to be treated as retirement compensation arrangements (RCAs). The effect of these provisions is to ensure that such plans are subject to the same tax treatment as funded supplemental pension plans established by private sector employers. In particular, amounts credited to the RCA account are subject to a special 50 percent tax (which is refunded as amounts are paid out of the plan) and amounts contributed by employees are tax deductible. These provisions apply only where the particular plan is prescribed by regulation. There are currently no prescribed plans.

Amendments in 1992 to the Members of Parliament Retiring Allowances Act and regulations made in 1994 and 1995 under the Special Retirement Arrangements Act established RCAs for Members of Parliament and federal public servants for pension benefits in excess of the registered pension plan limits.

Regulations are required to ensure that these supplemental pension plans are recognized as RCAs for tax purposes.

Accordingly, Part LXVIII of the Income Tax Regulations is amended to prescribe, for the purposes of paragraph 8(1)(m.2) and subsection 207.6(6) of the Income Tax Act, the following pension plans:

— the pension plan established as a consequence of the establishment, by section 27 of the Members of Parliament Retiring Allowances Act, of the Members of Parliament Retirement Compensation Arrangements Account, effective January 1, 1992;

— the pension plan established by the Retirement Compensation Arrangements Regulations, No. 1, effective December 15, 1994; and

— the pension plan established by the Retirement Compensation Arrangements Regulations, No. 2, effective April 1, 1995 (since this plan does not provide for employee contributions, it is only prescribed for the purposes of subsection 207.6(6) of the Income Tax Act).

In addition to the above amendment, the income tax withholding rules in Part I of the Income Tax Regulations are being amended so that there is no withholding requirement for the special 50 percent RCA tax at the time that amounts are credited under these prescribed plans.

Alternatives

These amendments are consequential on changes to the Income Tax Act and other legislation. Therefore, no alternatives were considered.

Benefits and Costs

It is not anticipated that these amendments will affect government revenues.

Consultation

These amendments were developed in consultation with Revenue Canada and Treasury Board.

Compliance and Enforcement

The Income Tax Act provides the necessary compliance mechanisms for these Regulations. It allows the Minister of National Revenue to conduct audits and to assess and reassess tax payable, interest and penalties.

Contact

Catherine Cloutier, Tax Legislation Division, Department of Finance, L'Esplanade Laurier, 140 O'Connor Street, Ottawa, Ontario K1A 0G5, (613) 996-0598.

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to section 221(see footnote a) of the Income Tax Act,(see footnote b) proposes to make the annexed Regulations Amending the Income Tax Regulations.

Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must be addressed to Catherine Cloutier, Senior Tax Policy Officer, Tax Legislation Division, Tax Policy Branch, L'Esplanade Laurier, Finance Canada, 17th Floor, East Tower, 140 O'Connor Street, Ottawa, Canada K1A 0G5, and cite the Canada Gazette, Part I, and the date of this notice.

Ottawa, October 5, 1999

MARC O'SULLIVAN
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE INCOME TAX REGULATIONS

AMENDMENTS

1. Paragraph 103(7)(a) of the Income Tax Regulations(see footnote 1) is replaced by the following:

(a) of the contribution made by the person under a retirement compensation arrangement, other than

2. The Regulations are amended by adding the following after section 6802:

6802.1 (1) For the purpose of paragraph 8(1)(m.2) of the Act, each of the following is a prescribed plan:

(a) the pension plan established as a consequence of the establishment, by section 27 of the Members of Parliament Retiring Allowances Act, of the Members of Parliament Retirement Compensation Arrangements Account; and

(b) the pension plan established by the Retirement Compensation Arrangements Regulations, No. 1.

(2) For the purpose of subsection 207.6(6) of the Act, each of the following is a prescribed plan or arrangement:

(a) the pension plan established as a consequence of the establishment, by section 27 of the Members of Parliament Retiring Allowances Act, of the Members of Parliament Retirement Compensation Arrangements Account;

(b) the pension plan established by the Retirement Compensation Arrangements Regulations, No. 1; and

(c) the pension plan established by the Retirement Compensation Arrangements Regulations, No. 2.

APPLICATION

3. Sections 1 and 2 apply after 1991 except that

(a) in its application to contributions made before 1996, paragraph 103(7)(a) of the Regulations, as enacted by section 1, shall be read without reference to subparagraph 103(7)(a)(iii);

(b) in their application before December 15, 1994, each of subsections 6802.1(1) and (2) of those Regulations, as enacted by section 2, shall be read without reference to paragraphs 6802.1(1)(b) and (2)(b); and

(c) in its application before April 1995, subsection 6802.1(2) of those Regulations, as enacted by section 2, shall be read without reference to paragraph 6802.1(2)(c).

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Regulations Amending the Pacific Pilotage Tariff Regulations

Statutory Authority

Pilotage Act

Sponsoring Agency

Pacific Pilotage Authority

REGULATORY IMPACT ANALYSIS STATEMENT

Description

The Pacific Pilotage Authority (the Authority) is responsible for administering, in the interests of safety, an efficient pilotage service within Canadian waters in and around the province of British Columbia. In addition, the Authority prescribes tariffs of pilotage charges that are fair, reasonable and consistent with providing revenues sufficient to permit the Authority to operate on a self-sustaining financial basis.

The amendment accommodates an increase in the coastal pilotage rates, travel and transportation charges and the port-to-port charge to reflect the actual costs associated in providing this pilotage service.

Alternatives

The Authority is required to provide a safe and efficient pilotage service to ensure safe navigation and protection of the marine environment. Costs have been kept to the minimum consistent with providing a safe and effective service and reductions in operating costs are not an alternative. These charges are necessary to offset the increased costs for coastal pilotage services and general operating expenses, thereby ensuring that the Authority will continue to operate on a self-sustaining financial basis.

Benefits and Costs

The 1.5 percent increase in the coastal pilotage rates and the $200 increase in the port-to-port charge is consistent with the current costs for the British Columbia Coast Pilots Ltd. in providing the service. The Authority has negotiated a per trip contract for the Cape Beale pilot launch and is passing the cost reduction onto the shipping industry by reducing this launch charge by $800. It is anticipated that the coastal pilotage increase will produce $400,000 and the port-to-port increase will produce $220,000 in revenue annually which will compensate for the increased pilotage costs.

The 4 percent increase in travel and transportation rates will produce $160,000 in revenue annually and is consistent with the current costs in providing air and ground transportation.

The Fraser River unit and pilot launch charges are not being revised as the current trip volumes are forecast to continue for the coming year allowing the Authority to maintain the current charges.

These charges, which will be absorbed by the shipping industry, are beneficial in that they will ensure the continued efficiency of the pilotage services and the Authority's capability to operate on a self-sustaining financial basis that is both fair and reasonable.

Consultation

The Authority met with the Chamber of Shipping of British Columbia to discuss these particular tariff charges. The Chamber which represents the shipping industry on the West Coast agrees in principle with this regulatory initiative.

Compliance and Enforcement

Section 45 of the Pilotage Act provides the enforcement mechanism for these Regulations in that a Pilotage Authority can inform a customs officer at any port in Canada to withhold clearance from any ship for which pilotage charges are outstanding and unpaid.

Contact

Mr. D. B. McLennan, President and Chief Executive Officer, Pacific Pilotage Authority, 1199 West Hastings Street, Suite 300, Vancouver, British Columbia V6E 4G9, (604) 666-6771 (Telephone), (604) 666-1647 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given, pursuant to subsection 34(1)(see footnote c) of the Pilotage Act, that the Pacific Pilotage Authority proposes, pursuant to subsection 33(1) of that Act, to make the annexed Regulations Amending the Pacific Pilotage Tariff Regulations.

Interested persons who have reason to believe that any charge in the proposed Regulations is prejudicial to the public interest, including, without limiting the generality thereof, the public interest that is consistent with the national transportation policy set out in section 5 of the Canada Transportation Act,(see footnote d) may file a notice of objection setting out the grounds therefor with the Canadian Transportation Agency within 30 days after the date of publication of this notice. The notice of objection should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to the Canadian Transportation Agency, Ottawa, Ontario K1A 0N9.

PACIFIC PILOTAGE AUTHORITY

D. B. MCLENNAN
Chief Executive Officer

REGULATIONS AMENDING THE PACIFIC PILOTAGE TARIFF REGULATIONS

AMENDMENTS

1. Sections 8(see footnote 2) and 8.1(see footnote 3) of the Pacific Pilotage Tariff Regulations(see footnote 4) are replaced by the following:

8. Despite sections 6 and 7, the total charges payable under those sections in respect of a ship are not less than $571.83.

PORT-TO-PORT CHARGES

8.1 When a ship leaves a wharf or anchorage in a port or harbour and goes directly to a wharf or anchorage in another port or harbour, a port-to-port charge of $900 per assignment is payable in addition to the charges prescribed in sections 6 to 8.

2. The portion of items 1 and 2 of Schedule 2 to the Regulations in column 3(see footnote 5) is replaced by the following:

Item	Column 3 Pilotage Charge ($)
1.	2.459
2.	4.918

3. The portion of item 1 of Schedule 3 to the Regulations in column 2(see footnote 6) is replaced by the following:

Item	Column 2 Time Charge ($)
1.	123.56

4. The portion of items 1 and 2 of Schedule 4 to the Regulations in column 2(see footnote 7) is replaced by the following:

Item	Column 2 Cancellation Charge ($)
1.	371.38
2.	123.56

5. The portion of items 1 to 3 of Schedule 5 to the Regulations in column 2 (see footnote 8) is replaced by the following:

Item	Column 2 Out-of-Region Charge ($) (per hour orpart of an hour)
1.	123.56
2.	123.56
3.	123.56

6. The portion of items 1 to 6 of Schedule 6 to the Regulations in column 2 (see footnote 9) is replaced by the following:

Item	Column 2 Transportation Charges ($)
1.	85
2.	126
3.	1,121
4.	336
5.	336
6.	85

7. Schedule 7(see footnote 10) to the Regulations is replaced by the following:

SCHEDULE 7
(Sections 12 and 13)

PILOT BOAT AND HELICOPTER CHARGES

Item	Column 1 Location	Column 2 Charge ($)	Column 3 Additional Charge	Column 4 Pilot Boat Replacement Charge ($)
1.	Brotchie Ledge	242	n/a	25
2.	Sand Heads	1,100	n/a	25
3.	Triple Islands	1,164	n/a	25
4.	Cape Beale	4,000	n/a	n/a
5.	English Bay	172	$43 for each period of 15 minutes that a pilot boat is detained on standby	n/a
6.	the entrance to Nanaimo Harbour	502	n/a	n/a
7.	any place other than a pilot boarding station	1,981	n/a	n/a

COMING INTO FORCE

8. These Regulations come into force on January 1, 2000.

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Footnote a

S.C. 1998, c. 19, s. 222

Footnote b

R.S., c. 1 (5th Supp.)

Footnote 1

C.R.C., c. 945

Footnote c

S.C. 1998, c. 10, s. 150

Footnote d

S.C. 1996, c. 10

Footnote 2

SOR/97-566

Footnote 3

SOR/99-199

Footnote 4

SOR/85-583

Footnote 5

SOR/97-566

Footnote 6

SOR/97-566

Footnote 7

SOR/99-199

Footnote 8

SOR/97-566

Footnote 9

SOR/97-566

Footnote 10

SOR/99-199

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