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SOR/2012-191 September 20, 2012

EXCISE TAX ACT

Regulations Amending Various GST/HST Regulations, No. 3

P.C. 2012-1127 September 20, 2012

His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to sections 236.01 (see footnote a), 277 (see footnote b) and 277.1 (see footnote c) of the Excise Tax Act (see footnote d), makes the annexed Regulations Amending Various GST/HST Regulations, No. 3.

REGULATIONS AMENDING VARIOUS GST/HST REGULATIONS, NO. 3

PART 1

BRITISH COLUMBIA HST REGULATIONS

1. Sections 1 to 4 of the British Columbia HST Regulations (see footnote 1) are replaced by the following:

Definition of “Act”

1. In these Regulations, “Act” means the Excise Tax Act.

TAX RATE

Tax rate for British Columbia

2. For the purposes of paragraph (a) of the definition “tax rate” in subsection 123(1) of the Act, the prescribed rate for British Columbia is 0%.

TRANSITIONAL RULES

Basic tax content — property in British Columbia

3. (1) For the purposes of determining, at any time on or after February 17, 2012, the basic tax content of real property that is situated in British Columbia or of tangible personal property that is ordinarily situated in that province, no tax under subsection 165(2) or section 212.1 or 218.1 of the Act or Division IV.1 of Part ⅠX of the Act is to be included in determining, in respect of the property, the value of A or B in paragraph (a) of the definition “basic tax content” in subsection 123(1) of the Act or the value of J or K in paragraph (b) of that definition.

Basic tax content — selected listed financial institutions

(2) For the purposes of determining, at any time on or after February 17, 2012, the basic tax content of property of a person that is, or was at any time, a selected listed financial institution, in applying in respect of British Columbia the formula in subparagraph (v) of the description of A in paragraph (a) of the definition “basic tax content” in subsection 123(1) of the Act or the formula in subparagraph (vi) of the description of J in paragraph (b) of that definition, the description of F in paragraph (a) of that definition and the description of O in paragraph (b) of that definition are adapted to be read as “is 0%, and”.

Basic tax content — real property

(3) Subsections (1) and (2) do not apply for the purposes of applying section 193 or 257 of the Act in respect of a taxable supply of real property if

  • (a) the supply is made by a particular person to another person, the particular person and the other person deal with each other at arm’s length and are not associated with each other and tax in respect of the supply becomes payable before April 1, 2013; or

  • (b) the supply is deemed to have been made under section 191 of the Act and tax in respect of the supply is deemed under that section to have been paid before April 1, 2013.

Exception

(4) If a particular person is entitled to claim, in respect of a supply of real property referred to in paragraph (3)(a), an input tax credit under section 193 of the Act or a rebate under section 257 of the Act, if the amount of the input tax credit or rebate exceeds the amount of the input tax credit or rebate, as the case may be, that would be determined in the absence of that paragraph and if, within one year of the time at which tax becomes payable in respect of the supply, the particular person, or another person that does not deal at arm’s length with the particular person or with which the particular person is associated, acquires an interest in the property, then the particular person is deemed, to the extent of that excess, to have never been entitled to claim the input tax credit or rebate.

New housing transition tax

4. The tax in respect of real property under Part 2 of the New Housing Transition Tax and Rebate Act, S.B.C. 2012, c. 31 is prescribed for the purposes of section 154 of the Act.

Employee and shareholder benefits — 2013

5. (1) In applying subsection 173(1) of the Act in respect of a supply made to an individual or a person related to the individual, the description of A in the formula in clause 173(1)(d)(vi)(B) of the Act is adapted to be read as “is 5.75%,” if

  • (a) a particular amount in respect of the supply 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 for the individual’s 2013 taxation year and the last establishment of the employer at which the individual ordinarily worked or to which the individual ordinarily reported in 2013 in relation to that office or employment is located in British Columbia; or

  • (b) a particular amount in respect of the supply is required under subsection 15(1) of the Income Tax Act to be included in computing the individual’s income for the individual’s 2013 taxation year and the individual is resident in British Columbia at the end of 2013.

Exception

(2) Subsection (1) does not apply in respect of a supply if section 37 of the New Harmonized Value-added Tax System Regulations, No. 2 applies for the purpose of determining an amount of tax under subparagraph 173(1)(d)(vi) of the Act in respect of an amount that includes the particular amount referred to in subsection (1) in respect of the supply.

Performance bonds

6. If a supply is deemed under subparagraph 184.1(2)(a)(i) of the Act to have been made in British Columbia by a surety as a result of the surety carrying on a particular construction of real property situated in that province as full or partial satisfaction of the surety’s obligation under a bond, if a contract payment (within the meaning of paragraph 184.1(2)(a) of the Act) in respect of the particular construction becomes due or is paid without having become due before April 1, 2013 and if another contract payment 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, then, in applying subsection 184.1(2) of the Act in respect of the particular construction, the formula and descriptions in clause 184.1(2)(d)(i)(A) of the Act are adapted to be read as follows:

(A × B) + (C × D)

where

A is 12%,

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 April 1, 2013 or that are paid before that day without having become due,

C is 5%, and

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 April 1, 2013, without having been paid before that day or that are paid on or after that day without having become due

Subsection 218.1(1.2) of Act

7. The tax payable by a person under subsection 218.1(1.2) of the Act for the specified year (as defined in section 217 of the Act) of the person that includes April 1, 2013 and for British Columbia is equal to the amount determined by the formula

A × (B⁄C)

where

A is the amount that, in the absence of this section, would be the tax payable by the person under subsection 218.1(1.2) of the Act for the specified year and for British Columbia;

B is the number of days in the specified year before April 1, 2013; and

C is the number of days in the specified year.

2013 — subsection 253(1) of Act

8. (1) Despite subsections 39(1) to (6) of the New Harmonized Value-added Tax System Regulations, No. 2, in determining the amount of a rebate in respect of property or a service that is payable under subsection 253(1) of the Act for the 2013 calendar year, if the tax referred to in paragraph 253(1)(b) of the Act includes tax under subsection 165(2) or section 212.1 or 218.1 of the Act or Division IV.1 of Part ⅠX of the Act calculated at the tax rate for British Columbia, the percentage is 1.75% for the purposes of the following descriptions:

  • (a) the description of F in paragraph (b) of the description of A in subsection 253(1) of the Act;

  • (b) the description of H in paragraph (c) of the description of A in subsection 253(1) of the Act;

  • (c) the description of E in clause (B) of the description of A in subparagraph 253(2)(a)(ii) of the Act;

  • (d) the description of G in clause (C) of the description of A in subparagraph 253(2)(a)(ii) of the Act;

  • (e) the description of E in clause (B) of the description of A in subparagraph 253(2)(c)(ii) of the Act; and

  • (f) the description of G in clause (C) of the description of A in subparagraph 253(2)(c)(ii) of the Act.

Years after 2013 — subsection 253(1) of Act

(2) Despite subsections 39(1) to (6) of the New Harmonized Value-added Tax System Regulations, No. 2, in determining the amount of a rebate in respect of property or a service that is payable under subsection 253(1) of the Act for a calendar year after 2013, if the tax referred to in paragraph 253(1)(b) of the Act includes tax under subsection 165(2) or section 212.1 or 218.1 of the Act or Division IV.1 of Part ⅠX of the Act calculated at the tax rate for British Columbia, the percentage is 0% for the purposes of the following descriptions:

  • (a) the description of F in paragraph (b) of the description of A in subsection 253(1) of the Act;

  • (b) the description of H in paragraph (c) of the description of A in subsection 253(1) of the Act;

  • (c) the description of E in clause (B) of the description of A in subparagraph 253(2)(a)(ii) of the Act;

  • (d) the description of G in clause (C) of the description of A in subparagraph 253(2)(a)(ii) of the Act;

  • (e) the description of E in clause (B) of the description of A in subparagraph 253(2)(c)(ii) of the Act; and

  • (f) the description of G in clause (C) of the description of A in subparagraph 253(2)(c)(ii) of the Act.

Rebate for pension entities

9. For the purposes of determining the provincial pension rebate amount for a claim period of a pension entity (as those terms are defined in Part ⅠX of the Act) that includes April 1, 2013, the description of C in paragraph (a) of the definition “provincial pension rebate amount” in subsection 261.01(1) of the Act is to be read as follows if the participating province referred to in that paragraph is British Columbia:

C is the percentage determined by the formula

7% × (C1⁄C2)

where

C1 is the number of days in the claim period before April 1, 2013, and

C2 is the number of days in the claim period, and

ANTI-AVOIDANCE

Application

10. Sections 11 and 12 apply despite any provision of the Act.

Wind-down — variation of agreement

11. If

  • (a) at any time before April 1, 2013, 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, if applicable, the other persons are not dealing with each other at arm’s length at the time the agreement referred to in paragraph (a) is entered into or at the later time,

  • (d) tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part ⅠX of the Act in respect of the supply referred to in paragraph (a) would have been, in the absence of the variation, alteration or termination of the agreement, calculated at the rate of 7% on all or part of the value of the consideration for the supply attributable to the property or service,

  • (e) tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part ⅠX of the Act in respect of the supply made under the varied or altered agreement or made under any of the new agreements, in the absence of this section, would not apply to any part of the value of the consideration for the supply, attributable to any part of the property or service, on which tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part ⅠX of the Act in respect of the supply referred to in paragraph (a) would have been, in the absence of the variation, alteration or termination of the agreement, calculated at the rate of 7%, 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, directly or indirectly, reduce, avoid or defer tax or any other amount payable under Part ⅠX of the Act or benefit in any manner from the wind-down of the new harmonized value-added tax system in British Columbia,

tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part ⅠX of the Act in respect of the supply made under the varied or altered agreement or made under any of the new agreements is to be calculated at the rate of 7% on any part of the value of the consideration, referred to in paragraph (e), attributable to any part of the property or service.

Definitions

12. (1) The following definitions apply in this section.

“person”
« personne »

“person” does not include a consumer.

“tax benefit”
« avantage fiscal »

“tax benefit” means a reduction, an avoidance or a deferral of tax or other amount payable under Part ⅠX of the Act or an increase in a refund or rebate of tax or other amount under that Part.

“transaction”
« opération »

“transaction” has the same meaning as in subsection 274(1) of the Act.

Wind-down — transactions

(2) If

  • (a) a transaction, or a series of transactions, involving property is made between two or more persons, all of whom are not dealing with each other at arm’s length at the time any of those transactions are made,

  • (b) the transaction, any of the transactions in the series of transactions or the series of transactions would in the absence of this section result directly or indirectly in a tax benefit to one or more of the persons involved in the transaction or series of transactions, and

  • (c) it may not reasonably be considered that the transaction, or the series of transactions, has been undertaken or arranged primarily for bona fide purposes other than to obtain a tax benefit, arising from the wind-down of the new harmonized value-added tax system in British Columbia, for one or more of the persons involved in the transaction or series of transactions,

the amount of tax, net tax, input tax credit, rebate or other amount payable by, or refundable to, any of those persons under Part ⅠX of the Act, or any other amount that is relevant for the purposes of computing that amount, is to be determined as is reasonable in the circumstances in order to deny the tax benefit to any of those persons.

Denying tax benefit on transactions

(3) A tax benefit is only to be denied under subsection (2) through an assessment, reassessment or additional assessment under Part ⅠX of the Act.

Request for adjustments

(4) If, with respect to a transaction, a notice of assessment, reassessment or additional assessment involving the application of subsection (2) with respect to the transaction has been sent to a person, any person (other than a person to whom such a notice has been sent) is entitled, within 180 days after the day on which the notice was sent, to request in writing that the Minister make an assessment, a reassessment or an additional assessment, applying subsection (2) with respect to that transaction.

Duties of Minister

(5) On receipt of a request by a person under subsection (4), the Minister must, with all due dispatch, consider the request and, despite subsections 298(1) and (2) of the Act, assess, reassess or make an additional assessment under Part ⅠX of the Act with respect to the person, except that the assessment, reassessment or additional assessment may be made only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection (4).

2. Section 4 of the Regulations, as enacted by section 1, is repealed.

PART 2

GAMES OF CHANCE (GST/HST) REGULATIONS

3. (1) Subclause (i)(A)(III) of the description of E3 in subsection 7(7) of the Games of Chance (GST/HST) Regulations (see footnote 2) is repealed.

(2) The description of E4 in subsection 7(7) of the Regulations is amended by striking out “and” at the end of clause (A) and by adding the following after clause (A):

  • (A.1) despite clause (A), if the benefit amount is required to be included under paragraph 6(1)(a) or (e) of the Income Tax Act and the last establishment at which the individual ordinarily worked or to which the individual ordinarily reported in the previous calendar year in relation to the individual’s office or employment with the authority is located in British Columbia, 5.75%, and

(3) The description of E 4 in subsection 7(7) of the Regulations, as amended by subsection (2), is amended by adding “and” at the end of clause (A) and by repealing clause (A.1).

4. (1) The description of A in section 8 of the Regulations is amended by striking out “or” at the end of paragraph (a), by replacing “and” with “or” at the end of paragraph (b) and by adding the following after paragraph (b):

  • (c) an amount that is required under section 236.01 of the Act to be added in determining the authority’s net tax for the particular period, but only to the extent that the authority would not be restricted from including the amount under the description of B as a consequence of subsection 9(1); and

(2) Paragraph (a) of the description of B in section 8 of the Regulations is amended by striking out “or” at the end of subparagraph (i), by adding “or” at the end of subparagraph (ii) and by adding the following after subparagraph (ii):

  • (iii) an amount that may be deducted under section 236.01 of the Act in determining the authority’s net tax for the particular period,

5. Subsection 9(6) of the Regulations is replaced by the following:

Application

(6) Sections 231 to 236.01 of the Act do not apply for the purpose of determining the net tax of a provincial gaming authority except as otherwise provided in this Part.

PART 3

TAXES, DUTIES AND FEES (GST/HST) REGULATIONS

6. The definition “general sales tax rate” in subsection 2(1) of the Taxes, Duties and Fees (GST/HST) Regulations (see footnote 3) is amended by adding the following after paragraph (c):

  • (c.1) for British Columbia, the rate of tax set out in subsection 34(1) of the Provincial Sales Tax Act, S.B.C. 2012, c. 35,

PART 4

PUBLIC SERVICE BODY REBATE (GST/HST) REGULATIONS

7. (1) Subparagraph 5(a)(iv) of the Public Service Body Rebate (GST/HST) Regulations (see footnote 4) is repealed.

(2) Clause 5(c)(i)(D) of the Regulations is repealed.

(3) Subparagraph 5(c)(ii) of the Regulations is amended by adding “and” at the end of clause (A), by striking out “and” at the end of clause (B) and by repealing clause (C).

(4) Subparagraph 5(c)(iii) of the Regulations is amended by adding “and” at the end of clause (A), by striking out “and” at the end of clause (B) and by repealing clause (C).

(5) Subparagraph 5(c)(iv) of the Regulations is amended by adding “and” at the end of clause (A), by striking out “and” at the end of clause (B) and by repealing clause (C).

(6) Clause 5(c)(v)(D) of the Regulations is repealed.

(7) Subparagraph 5(c)(vi) of the Regulations is replaced by the following:

  • (vi) in the case of a person referred to in subparagraph (b)(vi) that is resident in Ontario, 87%.

8. Subsection 5.4(2) of the Regulations is amended by adding “and” at the end of paragraph (h), by striking out “and” at the end of paragraph (i) and by repealing paragraph (j).

9. (1) Paragraphs 7(1)(a) to (d) of the Regulations are replaced by the following:

  • (a) the threshold amount for the person’s fiscal year that includes the claim period does not exceed $1,000,000;

  • (b) if the person’s fiscal quarter that includes the claim period is not the first fiscal quarter in the fiscal year, the threshold amount for the fiscal quarter does not exceed $1,000,000;

  • (c) the purchase threshold for the fiscal year does not exceed $4,000,000; and

  • (d) it is reasonable to expect at the beginning of the claim period that the purchase threshold for the person’s next fiscal year will not exceed $4,000,000.

(2) Paragraphs 7(2)(a) to (c) of the Regulations are replaced by the following:

  • (a) if the threshold amount for a fiscal year of the person exceeds $1,000,000, the end of the first fiscal quarter in that fiscal year,

  • (b) if the threshold amount for the second or third fiscal quarter in a fiscal year of the person exceeds $1,000,000, the end of the first fiscal quarter in that year for which the threshold amount exceeds $1,000,000, and

  • (c) if the purchase threshold for a fiscal year of the person exceeds $4,000,000, the end of the first fiscal quarter in that fiscal year.

PART 5

AGRICULTURE AND FISHING PROPERTY (GST/HST) REGULATIONS

10. The long title of the Agriculture and Fishing Property (GST/HST) Regulations (see footnote 5) is replaced by the following:

AGRICULTURE AND FISHING PROPERTY (GST/HST) REGULATIONS

11. Section 1 of the Regulations and the heading before it are repealed.

12. Subparagraph 2(1)(c)(iv) of the schedule to the Regulations is replaced by the following:

  • (iv) in the case of commercial fishing in Yukon, the Northwest Territories or Nunavut, a commercial fishing licence that was issued to the person by the Department of Fisheries and Oceans, and

PART 6

STREAMLINED ACCOUNTING (GST/HST) REGULATIONS

13. (1) Clause 15(5)(a)(i)(C) of the Strea m lined Accounting (GST/HST) Regulations (see footnote 6) is repealed.

(2) Clause 15(5)(a)(ii)(C) of the Regulations is repealed.

(3) Subparagraph 15(5)(a)(iii) of the Regulations is repealed.

(4) Clause 15(5)(a)(iv)(C) of the Regulations is repealed.

(5) Clause 15(5)(b)(i)(C) of the Regulations is repealed.

(6) Clause 15(5)(b)(ii)(C) of the Regulations is repealed.

(7) Subparagraph 15(5)(b)(iii) of the Regulations is repealed.

(8) Clause 15(5)(b)(iv)(C) of the Regulations is repealed.

14. (1) Paragraph 16(1)(b) of the Regulations is replaced by the following:

  • (b) the total threshold amount for the reporting period does not exceed $400,000, and

(2) Paragraphs 16(2)(b) and (c) of the Regulations are replaced by the following:

  • (b) the fiscal year of the registrant immediately before the first fiscal year of the registrant that is a reporting period of the registrant for which the total threshold amount exceeds $400,000,

    (c) the first fiscal quarter of the registrant that includes a reporting period of the registrant for which the total threshold amount exceeds $400,000, and

15. Paragraph (e) of the description of C in subsection 17(1) of the Regulations is repealed.

16. (1) Clause 19(3)(a)(i)(C) of the Regulations is repealed.

(2) Clause 19(3)(a)(ii)(C) of the Regulations is repealed.

(3) Clause 19(3)(a)(iii)(C) of the Regulations is repealed.

(4) Subparagraph 19(3)(a)(iv) of the Regulations is repealed.

(5) Clause 19(3)(a)(v)(C) of the Regulations is repealed.

(6) Clause 19(3)(b)(i)(C) of the Regulations is repealed.

(7) Clause 19(3)(b)(ii)(C) of the Regulations is repealed.

(8) Clause 19(3)(b)(iii)(C) of the Regulations is repealed.

(9) Subparagraph 19(3)(b)(iv) of the Regulations is repealed.

(10) Clause 19(3)(b)(v)(C) of the Regulations is repealed.

(11) Subclause 19(3)(c)(i)(A)(III) of the Regulations is repealed.

(12) Subclause 19(3)(c)(i)(B)(III) of the Regulations is repealed.

(13) Subclause 19(3)(c)(i)(C)(III) of the Regulations is repealed.

(14) Clause 19(3)(c)(i)(D) of the Regulations is repealed.

(15) Subclause 19(3)(c)(i)(E)(III) of the Regulations is repealed.

(16) Subclause 19(3)(c)(ii)(A)(III) of the Regulations is repealed.

(17) Subclause 19(3)(c)(ii)(B)(III) of the Regulations is repealed.

(18) Subclause 19(3)(c)(ii)(C)(III) of the Regulations is repealed.

(19) Clause 19(3)(c)(ii)(D) of the Regulations is repealed.

(20) Subclause 19(3)(c)(ii)(E)(III) of the Regulations is repealed.

(21) Clause 19(3)(d)(i)(C) of the Regulations is repealed.

(22) Clause 19(3)(d)(ii)(C) of the Regulations is repealed.

(23) Clause 19(3)(d)(iii)(C) of the Regulations is repealed.

(24) Subparagraph 19(3)(d)(iv) of the Regulations is repealed.

(25) Clause 19(3)(d)(v)(C) of the Regulations is repealed.

(26) The portion of subparagraph 19(3)(e)(i) of the Regulations before clause (A) is replaced by the following:

  • (i) if the registrant makes the particular sup ply through a permanent establishment of the registrant in Ontario,

(27) Clause 19(3)(e)(i)(C) of the Regulations is repealed.

(28) Clause 19(3)(e)(ii)(C) of the Regulations is repealed.

(29) Clause 19(3)(e)(iii)(C) of the Regulations is repealed.

(30) Clause 19(3)(e)(iv)(C) of the Regulations is repealed.

(31) Clause 19(3)(e)(v)(C) of the Regulations is repealed.

17. (1) Paragraphs 21.2(1)(a) to (d) of the Regulations are replaced by the following:

  • (a) the threshold amount for the fiscal year of the registrant that includes the reporting period does not exceed $1,000,000;

  • (b) if the fiscal quarter of the registrant that includes the reporting period is not the first fiscal quarter in the fiscal year, the threshold amount for the fiscal quarter does not exceed $1,000,000;

  • (c) the purchase threshold for the fiscal year does not exceed $4,000,000;

  • (d) if the registrant is a public service body, it is reasonable to expect at the beginning of the reporting period that the purchase threshold for the registrant’s next fiscal year will not exceed $4,000,000; and

(2) Paragraphs 21.2(2)(a) to (d) of the Regulations are replaced by the following:

  • (a) if the threshold amount for the second or third fiscal quarter in a fiscal year of the registrant exceeds $1,000,000, the end of the first fiscal quarter in that fiscal year for which the threshold amount exceeds $1,000,000,

  • (b) if the threshold amount for a fiscal year of the registrant exceeds $1,000,000, the end of the first fiscal quarter in that fiscal year,

  • (c) if the registrant is not a public service body and the purchase threshold of the registrant for a particular day exceeds $4,000,000, the end of the immediately preceding day,

  • (d) if the registrant is a public service body and the purchase threshold for a fiscal year of the registrant exceeds $4,000,000, the end of the first fiscal quarter in that fiscal year, and

PART 7

FEDERAL BOOK REBATE (GST/HST) REGULATIONS

18. The schedule to the Federal Book Rebate (GST/HST) Regulations (see footnote 7) is amended by adding the following in alphabetical order:

A Book of My Own Literacy Campaign

COMQUAT Inc.

PART 8

AUTOMOBILE OPERATING EXPENSE BENEFIT (GST/HST) REGULATIONS

19. (1) The portion of paragraph 2(c) of the Automobile Operating Expense Benefit (GST/HST) Regulations (see footnote 8) before subparagraph (i) is replaced by the following:

  • (c) 3.5% if

(2) Paragraph 2(c) of the Regulations, as amended by subsection (1), is repealed.

PART 9

DEDUCTION FOR PROVINCIAL REBATE (GST/HST) REGULATIONS

20. (1) The definitions “aircraft fuel”, “diesel fuel”, “gasoline” and “motor fuel” in section 1 of the Deduction for Provincial Rebate (GST/HST) Regulations (see footnote 9) are repealed.

(2) Paragraph (d) of the definition “provincial schedule” in section 1 of the Regulations is repealed.

21. Schedule 4 to the Regulations is repealed.

PART 10

NEW HARMONIZED VALUE-ADDED TAX SYSTEM REGULATIONS

22. The New Harmonized Value-added Tax System Regulations (see footnote 10) are amended by adding the following after section 33:

Specified motor vehicle

33.1 If a supply by way of sale of a specified motor vehicle is made and the supplier maintains evidence satisfactory to the Minister that, on or before the day that is seven days after the day on which the vehicle was delivered or made available in a participating province to the recipient of the supply, the vehicle was registered, otherwise than temporarily, under the laws of another province relating to the registration of motor vehicles by or on behalf of the recipient, the supply is made in that other province.

Screening services

33.2 A supply of a service of screening made by a screening contractor to the Authority (as those terms are defined in section 2 of the Canadian Air Transport Security Authority Act) is made in a province if all or substantially all of the service is performed at an airport situated in the province.

PART 11

NEW HARMONIZED VALUE-ADDED TAX SYSTEM REGULATIONS, NO. 2

23. Section 8 of the New Harmonized Value-added Tax System Regulations, No. 2 (see footnote 11) is replaced by the following:

Specified provincial tax — Ontario

8. For the purposes of paragraph (d) of the definition “specified provincial tax” in section 220.01 of the Act, in the case of a vehicle registered in the province of Ontario, a prescribed tax is the tax imposed under the Retail Sales Tax Act, R.S.O. 1990, c. R.31, as amended from time to time.

24. The portion of paragraph 10(b) of the French version of the Regulations before subparagraph (i) is replaced by the following:

  • b) le total des montants, dont chacun représente un montant de taxe qui, en l’absence du présent alinéa et des alinéas 11b) et 15b), deviendrait payable par la personne en vertu de la section IV.1 de la partie ⅠX de la Loi et à l’égard duquel le paragraphe 220.09(3) de la Loi ne s’appliquerait pas si cette taxe devenait payable par la personne, correspond à 25 $ ou moins au cours du mois civil qui comprend :

25. Paragraph 11(b) of the French version of the Regulations is replaced by the following:

  • b) le total des montants, dont chacun représente un montant de taxe qui, en l’absence du présent alinéa et des alinéas 10b) et 15b), deviendrait payable par l’acquéreur en vertu de la section IV.1 de la partie ⅠX de la Loi et à l’égard duquel le paragraphe 220.09(3) de la Loi ne s’appliquerait pas si cette taxe devenait payable par l’acquéreur, correspond à 25 $ ou moins au cours du mois civil qui comprend le jour où le bien est livré à l’acquéreur dans la province ou y est mis à sa disposition.

26. The portion of paragraph 23(g) of the English version of the Regulations before subparagraph (i) is replaced by the following:

  • (g) property that is brought into a participating province at a particular time by a person after having been used in and, at another time, removed from any participating province (in this paragraph referred to as the “specified province”) by the person if

27. (1) The definition “recapture rate” in section 26 of the Regulations is replaced by the following:

“recapture rate”
« taux de récupération »

“recapture rate” applicable at a time in respect of a specified provincial input tax credit means

  • (a) in the case of a specified provincial input tax credit that is a British Columbia recapture amount,
    • (i) in the case of a time that is on or after July 1, 2010 and before April 1, 2013, 100%, or

    • (ii) in the case of a time that is on or after April 1, 2013, 0%; and
  • (b) in any other case,
    • (i) in the case of a time that is on or after July 1, 2010 and before July 1, 2015, 100%,

    • (ii) in the case of a time that is on or after July 1, 2015 and before July 1, 2016, 75%,

    • (iii) in the case of a time that is on or after July 1, 2016 and before July 1, 2017, 50%,

    • (iv) in the case of a time that is on or after July 1, 2017 and before July 1, 2018, 25%, and

    • (v) in the case of a time that is on or after July 1, 2018, 0%.

(2) Section 26 of the Regulations is amended by adding the following in alphabetical order:

“British Columbia recapture amount”
« montant de récupération de la Colombie-Britannique »

“British Columbia recapture amount” means a specified provincial input tax credit in respect of

  • (a) the acquisition in British Columbia of property;

  • (b) the bringing into British Columbia of property; or

  • (c) the acquisition of a service for consumption or use in British Columbia.

“specified time”
« moment déterminé »

“specified time” means in respect of a specified provincial input tax credit of a person that is attributable to tax in respect of a supply, importation or bringing into a province of a specified property or service that becomes payable by the person, that is paid by the person without having become payable or that would have become payable by the person if the rules described in paragraphs 29(1)(a) to (g) applied in respect of that supply, importation or bringing in or if subsection 29(2) applied in respect of that bringing in,

  • (a) in the case where that tax would have only become payable by the person if the rules described in paragraphs 29(1)(a) to (g) applied in respect of that supply, importation or bringing in or if subsection 29(2) applied in respect of that bringing in, the day on which that tax would have become payable by the person; and

  • (b) in any other case, the earlier of
    • (i) the day on which that tax becomes payable by the person, and

    • (ii) the day that is the later of July 1, 2010 and the day on which that tax is paid by the person.

28. Subsection 27(11) of the Regulations is replaced by the following:

Ceasing to be a large business — addition

(11) For the purposes of the definition “large business” in subsection 236.01(1) of the Act, a person is a prescribed person at the time prescribed by section 30 or 32 in respect of a specified provincial input tax credit of the person in respect of a specified property or service if the person ceased to be a large business

  • (a) before that time; and

  • (b) after
    • (i) in the case of a qualifying motor vehicle in respect of which section 32 applies, the time when the person first uses the qualifying motor vehicle otherwise than exclusively for the purpose referred to in subparagraph 28(2)(g)(i), and

    • (ii) in any other case, the specified time in respect of the specified provincial input tax credit.

29. (1) The portion of section 30 of the Regulations before paragraph (a) is replaced by the following:

Prescribed time

30. If a person acquires or imports a specified property or service or brings it into a specified province and tax under subsection 165(2) or section 212.1 or 218.1 of the Act or Division IV.1 of Part ⅠX of the Act in respect of the supply, importation or bringing in becomes payable by the person, is paid by the person without having become payable or would have become payable by the person if the rules described in paragraphs 29(1)(a) to (g) applied in respect of that supply, importation or bringing in or if subsection 29(2) applied in respect of that bringing in, for the purposes of subsection 236.01(2) of the Act, the prescribed time in respect of a specified provincial input tax credit of the person in respect of the specified property or service is

(2) Paragraphs 30(c) and (d) of the Regulations are replaced by the following:

  • (c) in the case where that tax would have only become payable by the person if the rules described in paragraphs 29(1)(a) to (g) applied in respect of that supply, importation or bringing in or if subsection 29(2) applied in respect of that bringing in, the day that is
    • (i) the particular day on which that tax would have become payable by the person if
      • (A) the reporting period of the person is a fiscal year,

      • (B) the reporting period of the person is a fiscal quarter and either
        • (I) the particular day is in a fiscal month that is not the last fiscal month of the fiscal quarter, or

        • (II) the particular day is in the last fiscal month of the fiscal quarter and the person has added an amount to its net tax in respect of the specified provincial input tax credit for the reporting period of the person that includes the particular day, or
      • (C) the reporting period of the person is a fiscal month and the person has added an amount to its net tax in respect of the specified provincial input tax credit for the reporting period of the person that includes the particular day, and
    • (ii) otherwise, the first day of the reporting period following the reporting period that includes the day on which that tax would have become payable by the person; and
  • (d) in any other case, the earlier of
    • (i) the day that is
      • (A) the particular day on which that tax be-comes payable by the person if
        • (I) an input tax credit in respect of that tax is claimed in the return under Division V of Part ⅠX of the Act filed for the reporting period that includes the particular day,
        • (II) the reporting period of the person is a fiscal year,
        • (III) the reporting period of the person is a fiscal quarter and either
          1. 1. the particular day is in a fiscal month that is not the last fiscal month of the fiscal quarter, or
          2. 2. the particular day is in the last fiscal month of the fiscal quarter and the person has added an amount to its net tax in respect of the specified provincial input tax credit for the reporting period of the person that includes the particular day, or
        • (IV) the reporting period of the person is a fiscal month and the person has added an amount to its net tax in respect of the specified provincial input tax credit for the reporting period of the person that in-cludes the particular day, and
      • (B) otherwise, the first day of the reporting period following the reporting period that includes the day on which that tax becomes payable by the person, and
    • (ii) the day that is the later of July 1, 2010 and
      • (A) the particular day on which that tax is paid by the person if
        • (I) an input tax credit in respect of that tax is claimed in the return under Division V of Part IX of the Act filed for the reporting period that includes the particular day,
        • (II) the reporting period of the person is a fiscal year,
        • (III) the reporting period of the person is a fiscal quarter and either
          1. 1. the particular day is in a fiscal month that is not the last fiscal month of the fiscal quarter, or
          2. 2. the particular day is in the last fiscal month of the fiscal quarter and the person has added an amount to its net tax in respect of the specified provincial input tax credit for the reporting period of the person that includes the particular day, or
        • (IV) the reporting period of the person is a fiscal month and the person has added an amount to its net tax in respect of the specified provincial input tax credit for the reporting period of the person that in-cludes the particular day, and
      • (B) otherwise, the first day of the reporting period following the reporting period that includes the day on which that tax is paid by the person.

30. (1) The description of B in subsection 31(2) of the Regulations is replaced by the following:

B is the recapture rate applicable at the specified time in respect of the specified provincial input tax credit.

(2) The description of B in subsection 31(3) of the Regulations is replaced by the following:

B is the recapture rate applicable at the specified time in respect of the specified provincial input tax credit.

(3) The description of B in subsection 31(4) of the Regulations is replaced by the following:

B is the recapture rate applicable at the specified time in respect of the specified provincial input tax credit.

(4) The description of B in subsection 31(5) of the Regulations is replaced by the following:

B is the recapture rate applicable at the specified time in respect of the specified provincial input tax credit.

31. The description of B in subparagraph 32(b)(ii) of the Regulations is replaced by the following:

B is the recapture rate applicable on the last day of the fiscal year in respect of the specified provincial input tax credit.

32. The Regulations are amended by adding the following after section 34:

Restriction

34.1 Section 34 does not apply in respect of a supply of a qualifying motor vehicle by a person made after March 31, 2013 or a removal of a qualifying motor vehicle by a person from British Columbia after that day, if the person added an amount under subsection 236.01(2) of the Act in respect of the last acquisition or bringing in of the qualifying motor vehicle by the person and that amount was in respect of a British Columbia recapture amount.

33. (1) The portion of subsection 36(1) of the Regulations before the formula is replaced by the following:

Effect of election

36. (1) For the purposes of paragraph 236.01(4)(a) of the Act and despite sections 31 and 32, if an election made under subsection 35(1) by a person is in effect during an instalment period, the amount to be added to the net tax of the person for each particular reporting period of the person during which the person is a large business that ends at a time in the instalment period when the election is in effect is the total of all amounts each of which is determined, for a specified provincial input tax credit, by the formula

(2) The portion of the description of A in subsection 36(1) of the Regulations before paragraph (a) is replaced by the following:

A is all or part of the specified provincial input tax credit that would have been required to be added under subsection 236.01(2) of the Act for each reporting period of the person ending in the last fiscal year of the person that ends before the first day of the instalment period if

(3) The description of D in subsection 36(1) of the Regulations is replaced by the following:

D is the recapture rate applicable on the last day of the particular reporting period in respect of the specified provincial input tax credit.

34. (1) The portion of subsection 41(3) of the Regulations before the formula is replaced by the following:

Rebate in British Columbia

(3) If an individual is entitled to claim a rebate under subsection 254(2) of the Act in respect of a residential complex that is a single unit residential complex, or a residential condominium unit, acquired for use in British Columbia as the primary place of residence of the individual or of a relation of the individual, or the individual would be so entitled if the total consideration (within the meaning of paragraph 254(2)(c) of the Act) in respect of the complex were less than $450,000, for the purposes of subsection 256.21(1) of the Act, the individual is a prescribed person and the amount of the rebate in respect of the complex under that subsection is equal to the lesser of $42,500 and the amount determined by the formula

(2) Subsection 41(3) of the Regulations, as amended by subsection (1), is repealed.

(3) Subsections 41(4) and (5) of the Regulations are replaced by the following:

Application for rebate

(4) For the purposes of subsection 256.21(2) of the Act, an application for a rebate, the amount of which is determined under subsection (2), must be filed within two years after the day on which ownership of the complex is transferred to the individual.

Restriction

(5) The Minister shall pay a rebate in respect of a complex to an individual under subsection 256.21(1) of the Act, the amount of which is determined under subsection (2), only if the individual does not make an application for a rebate in respect of the complex under subsection 256(2) of the Act.

(4) Paragraph 41(6)(b) of the Regulations is replaced by the following:

  • (b) an individual who is a prescribed person under subsection (2) in respect of the complex is an individual of a prescribed class; and

(5) Subparagraph 41(6)(c)(ii) of the Regulations is replaced by the following:

35. Section 42 of the Regulations is amended by adding “and” at the end of paragraph (c) and by repealing paragraph (d).

36. (1) Subsection 43(2) of the Regulations is replaced by the following:

Rebate in British Columbia

(2) If an individual is entitled to claim a rebate under subsection 254.1(2) of the Act in respect of a building or part of it in which a residential unit forming part of a residential complex in British Columbia is situated, or would be so entitled if the fair market value of the complex, at the time possession of the complex is given to the individual under the agreement for the supply of the complex to the individual, were less than $504,000, for the purposes of subsection 256.21(1) of the Act, the individual is a prescribed person and the amount of the rebate in respect of the complex under that subsection is equal to the lesser of $42,500 and 4.47% of the total consideration (within the meaning of paragraph 254.1(2)(h) of the Act) in respect of the complex.

(2) Subsection 43(2) of the Regulations, as enacted by subsection (1), is repealed.

(3) Subsection 43(3) of the Regulations is replaced by the following:

Application for rebate

(3) For the purposes of subsection 256.21(2) of the Act, an application for a rebate, the amount of which is determined under subsection (1), must be filed within two years after the day on which possession of the complex is transferred to the individual.

(4) Paragraph 43(4)(b) of the Regulations is replaced by the following:

  • (b) an individual who is a prescribed person under subsection (1) in relation to the complex is an individual of a prescribed class; and

(5) Subparagraph 43(4)(c)(ii) of the Regulations is replaced by the following:

  • (ii) the builder agrees to pay to, or to credit to or in favour of, the individual any rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection (2), that is payable to the individual in respect of the complex,

37. Section 44 of the Regulations is amended by adding “and” at the end of paragraph (c) and by repealing paragraph (d).

38. (1) The portion of subsection 45(3) of the Regulations before paragraph (a) is replaced by the following:

Rebate in British Columbia

(3) For the purposes of subsection 256.21(1) of the Act, an individual is a prescribed person and the amount of the rebate under that subsection in respect of a share of the capital stock of a cooperative housing corporation is equal to the lesser of $42,500 and 4.47% of the total consideration referred to in paragraph (c), if

(2) Subsection 45(3) of the Regulations, as amended by subsection (1), is repealed.

(3) Subsection 45(4) of the Regulations is replaced by the following:

Application for rebate

(4) For the purposes of subsection 256.21(2) of the Act, an application for a rebate, the amount of which is determined under subsection (2), must be filed within two years after the day on which ownership of the share is transferred to the individual.

Application for rebate

(5) For the purposes of subsection 256.21(2) of the Act, an application for a rebate, the amount of which is determined under subsection (3), must be filed within two years after the day on which ownership of the share is transferred to the individual but not later than March 31, 2017.

(4) Subsection 45(5) of the Regulations, as enacted by subsection (3), is repealed.

39. (1) Paragraphs 46(3)(c) and (d) of the Regulations are replaced by the following:

  • (c) if tax under subsection 165(2) of the Act is payable in respect of the supply by way of sale to the individual of the land that forms part of the complex or an interest in the land, the lesser of $42,500 and 71.43% of the total tax in respect of the province, or
  • (d) otherwise, the lesser of $28,475 and 71.43% of the total tax in respect of the province.

(2) Subsection 46(3) of the Regulations, as amended by subsection (1), is repealed.

(3) Subsection 46(4) of the Regulations is replaced by the following:

Homes occupied before substantial completion

(4) If an individual acquires an improvement in respect of the residential complex referred to in subsection (2) and tax in respect of the improvement becomes payable by the individual more than two years after the day on which the complex is first occupied as described in subparagraph 256(2)(d)(i) of the Act, that tax shall not be included under paragraph (2)(b) in determining, for the complex, the total tax in respect of the province.

(4) Paragraphs 46(5)(a) to (c) of the Regulations are replaced by the following:

  • (a) the particular individual at a particular time purchases, imports or brings into Ontario the mobile home or floating home and at the particular time the home has never been used or occupied by any individual as a place of residence or lodging in Canada;

  • (b) the particular individual does not file with the Minister or submit to the supplier an application for a rebate in respect of the home under section 254 or 254.1 of the Act or for a rebate in respect of the home under section 256.21 of the Act the amount of which is determined under subsection 41(2) or 43(1);

  • (c) the particular individual is acquiring, importing or bringing into Ontario the mobile home or floating home for use as the primary place of residence of the particular individual or of a relation of the particular individual; and

(5) Subsection 46(6) of the Regulations is replaced by the following:

Application for rebate

(6) For the purposes of subsection 256.21(2) of the Act, an application for a rebate in relation to a residential complex, the amount of which is determined under subsection (2) or (3), must be filed on or before

  • (a) the day (in this subsection referred to as the “due date”) that is the earliest of
    • (i) the day that is four years after the day on which the complex is first occupied as described in subparagraph 256(2)(d)(i) of the Act,

    • (ii) the day that is two years after the day on which ownership is transferred as described in subparagraph 256(2)(d)(ii) of the Act, and

    • (iii) the day that is two years after the day on which construction or substantial renovation of the complex is substantially completed;
  • (b) any day after the due date allowed by the Minister under paragraph 256(3)(b) of the Act in respect of a rebate under section 256 of the Act in relation to the residential complex; or

  • (c) if paragraph (b) does not apply, any day after the due date that is set out in a written request filed with the Minister by the individual referred to in subsection (2) or (3), as the case may be, and that is satisfactory to the Minister.

(6) The portion of subsection 46(6) of the Regulations before paragraph (a), as enacted by subsection (5), is replaced by the following:

Application for rebate

(6) For the purposes of subsection 256.21(2) of the Act, an application for a rebate in relation to a residential complex, the amount of which is determined under subsection (2), must be filed on or before

(7) Paragraph 46(6)(c) of the Regulations, as enacted by subsection (5), is replaced by the following:

  • (c) if paragraph (b) does not apply, any day after the due date that is set out in a written request filed with the Minister by the individual referred to in subsection (2) and that is satisfactory to the Minister.

40. (1) The portion of subsection 47(4) of the Regulations before the formula is replaced by the following:

Land and building — British Columbia

(4) Subject to subsections (13) to (15), if a person is entitled to claim a rebate under subsection 256.2(3) of the Act in respect of a residential complex, an interest in a residential complex or an addition to a multiple unit residential complex, situated in British Columbia, or the person would be so entitled if the fair market value of the complex or addition were less than $450,000, for the purposes of subsection 256.21(1) of the Act, the person is a prescribed person and the amount of the rebate under that subsection in respect of the complex, interest or addition, as the case may be, is equal to the total of all amounts each of which is an amount, in respect of each residential unit that forms part of the complex or addition and that is a qualifying residential unit of the person at the specified time — being the time at which the tax in respect of the complex, interest or addition, as the case may be, first becomes payable in respect of the purchase from the supplier (within the meaning of subparagraph 256.2(3)(a)(i) of the Act) or is deemed to have been paid by the person in respect of the deemed purchase (within the meaning of subparagraph 256.2(3)(a)(ii) of the Act) — equal to the lesser of $42,500 and the amount determined by the formula

(2) Subsection 47(4) of the Regulations, as amended by subsection (1), is repealed.

(3) The portion of the description of A in subsection 47(6) of the Regulations before the formula is replaced by the following:

A is the lesser of $42,500 and the amount determined by the formula

(4) Subsection 47(6) of the Regulations, as amended by subsection (3), is repealed.

(5) The portion of the description of A in subsection 47(8) of the Regulations before the formula is replaced by the following:

A is the lesser of $42,500 and the amount determined by the formula

(6) Subsection 47(8) of the Regulations, as amended by subsection (5), is repealed.

(7) The portion of paragraph 47(10)(a) of the Regulations before subparagraph (i) is replaced by the following:

  • (a) in the case of a supply of a site in a residential trailer park or in an addition to a residential trailer park, the lesser of $14,025 multiplied by the total number of sites in the park or addition, as the case may be, and

(8) The portion of paragraph 47(10)(b) of the Regulations before subparagraph (i) is replaced by the following:

  • (b) in any other case, the lesser of $14,025 and

(9) Subsection 47(10) of the Regulations, as amended by subsections (7) and (8), is repealed.

(10) Subsection 47(11) of the Regulations is replaced by the following:

Application for rebate

(11) For the purposes of subsection 256.21(2) of the Act, an application for a rebate, the amount of which is determined under subsection (3), (5), (7) or (9), must be filed within two years after,

  • (a) in the case of a rebate in respect of a residential unit the amount of which is determined under subsection (3) or (5), the end of the month in which tax first becomes payable by the person, or is deemed to have been paid by the person, in respect of the unit or interest in the unit or in respect of the residential complex or addition, or interest therein, in which the unit is situated, as the case may be;

  • (b) in the case of a rebate the amount of which is determined under subsection (7), the end of the month in which the person makes the exempt supply referred to in that subsection; and

  • (c) in the case of a rebate the amount of which is determined under subsection (9), the end of the month in which the person is deemed to have paid the tax referred to in that subsection.

Application for rebate

(11.1) For the purposes of subsection 256.21(2) of the Act, an application for a rebate, the amount of which is determined under subsection (4), (6), (8) or (10), must be filed

  • (a) in the case of a rebate in respect of a residential unit the amount of which is determined under subsection (4) or (6), within two years after the end of the month in which tax first becomes payable by the person, or is deemed to have been paid by the person, in respect of the unit or interest in the unit or in respect of the residential complex or addition, or interest therein, in which the unit is situated, as the case may be;

  • (b) in the case of a rebate the amount of which is determined under subsection (8), within two years after the end of the month in which the person makes the exempt supply referred to in that subsection but not later than March 31, 2017; and

  • (c) in the case of a rebate the amount of which is determined under subsection (10), within two years after the end of the month in which the person is deemed to have paid the tax referred to in that subsection.

(11) Subsection 47(11.1) of the Regulations, as enacted by subsection (10), is repealed.

(12) Section 47 of the Regulations is amended by adding the following after subsection (12):

Application of subsection 256.2(9) of Act

(12.1) If, in the absence of this subsection, a rebate under subsection 256.21(1) of the Act in respect of real property would not be payable to a person only because all or part of the tax included in determining the amount of a particular rebate in respect of the real property under section 256.2 of the Act would otherwise be included in determining the amount of a rebate of the person under section 259 of the Act, for the purpose of applying this section in respect of the real property, the person is deemed to be entitled to claim the particular rebate.

Restriction

(12.2) If a person is entitled to include an amount of tax in determining, under this section, the amount of a particular rebate payable under subsection 256.21(1) of the Act in respect of real property and the person includes all or part of the amount of tax in determining the amount of a rebate of the person under section 259 of the Act that is claimed by the person at any time, for the purpose of applying section 256.21 of the Act in respect of the real property, the person is deemed to have never been entitled to include the amount of tax in determining the amount of the particular rebate.

(13) Subsection 47(15) of the Regulations is replaced by the following:

Exception — prescribed person

(15) If, in the absence of this subsection, a person would be, under subsection (3), a prescribed person for the purposes of subsection 256.21(1) of the Act in respect of a qualifying residential unit (other than a unit located in a multiple unit residential complex) and, within one year after the unit is first occupied as a place of residence after the construction or last substantial renovation of the unit was substantially completed, the person makes a supply by way of sale (other than a supply deemed under section 183 or 184 of the Act to have been made) of the unit to a purchaser who is not acquiring the unit for use as the primary place of residence of the purchaser or of a relation of the purchaser, the person is deemed never to have been a prescribed person under subsection (3) for the purposes of subsection 256.21(1) of the Act in respect of the qualifying residential unit.

41. (1) Section 52 of the Regulations is amended by adding the following after subsection (1):

Exception

(1.1) For the purpose of applying paragraph (1)(e) in respect of a taxable supply of a residential condominium unit made in British Columbia, the reference in that paragraph to “at the earlier of the time ownership of the unit is transferred to the person and the time possession of the unit is transferred to the person under the agreement, tax under Division II of Part ⅠX of the Act” is to be read as a reference to “at the time tax under Division II of Part ⅠX of the Act is payable in respect of the particular taxable supply, tax under that Division”.

(2) Subsection 52(1.1) of the Regulations, as enacted by subsection (1), is repealed.

42. (1) Section 57 of the Regulations is amended by adding the following after subsection (4):

Restriction

(5) A person is not entitled to claim a rebate in respect of a residential complex situated in British Columbia under subsection 256.21(1) of the Act, the amount of which is determined under subsection (4), in circumstances in which tax under subsection 165(1) of the Act has not become payable by the person in respect of a supply of the complex.

(2) Subsection 57(5) of the Regulations, as enacted by subsection (1), is repealed.

43. The Regulations are amended by adding the following after section 75:

PART 11

WIND-DOWN — BRITISH COLUMBIA

76. Despite Part 10,

  • (a) subsection 51(1) does not apply in respect of a taxable supply by way of sale of a single unit residential complex made in British Columbia if tax in respect of the supply becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (b) subsection 51(2) does not apply in respect of an agreement described in paragraph 51(1)(a) in respect of a single unit residential complex situated in British Columbia if tax in respect of the taxable supply by way of sale of the single unit residential complex made under the agreement becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (c) subsection 51(4) does not apply in respect of a first resale, referred to in subsection 51(3), of a single unit residential complex made in British Columbia if tax in respect of the first resale becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (d) subsection 51(5) does not apply in respect of a particular taxable supply by way of sale, referred to in that subsection, of a single unit residential complex made in British Columbia if tax in respect of the supply becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (e) subsection 51(7) does not apply in respect of a subsequent resale, referred to in subsection 51(6), of a single unit residential complex made in British Columbia if tax in respect of the subsequent resale becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (f) subsection 52(1) does not apply in respect of a taxable supply by way of sale of a residential condominium unit made in British Columbia if tax in respect of the supply becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (g) subsection 52(2) does not apply in respect of an agreement described in paragraph 52(1)(a) in respect of a residential condominium unit situated in British Columbia if tax in respect of the taxable supply by way of sale of the residential condominium unit made under the agreement becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (h) subsection 52(4) does not apply in respect of a first resale, referred to in subsection 52(3), of a residential condominium unit made in British Columbia if tax in respect of the first resale becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (i) subsection 52(5) does not apply in respect of a particular taxable supply by way of sale, referred to in that subsection, of a residential condominium unit made in British Columbia if tax in respect of the supply becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (j) subsection 52(7) does not apply in respect of a subsequent resale, referred to in subsection 52(6), of a residential condominium unit made in British Columbia if tax in respect of the subsequent resale becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (k) subsection 53(1) does not apply in respect of a taxable supply by way of sale of a condominium complex made in British Columbia if tax in respect of the supply becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (l) subsection 53(2) does not apply in respect of an agreement described in paragraph 53(1)(a) in respect of a condominium complex situated in British Columbia if tax in respect of the taxable supply by way of sale of the condominium complex made under the agreement becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (m) subsection 53(4) does not apply in respect of a first resale, referred to in subsection 53(3), of a condominium complex, or any residential condominium unit located in a condominium complex, made in British Columbia if tax in respect of the first resale becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (n) subsection 53(5) does not apply in respect of a particular taxable supply by way of sale, referred to in that subsection, of a condominium complex, or any residential condominium unit located in a condominium complex, made in British Columbia if tax in respect of the supply becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (o) subsection 53(7) does not apply in respect of a subsequent resale, referred to in subsection 53(6), of a condominium complex, or any residential condominium unit located in a condominium complex, made in British Columbia if tax in respect of the subsequent resale becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (p) subsection 53(9) does not apply in respect of a subsequent resale, referred to in subsection 53(8), of a residential condominium unit located in a condominium complex made in British Columbia if tax in respect of the subsequent resale becomes payable because of subsection 168(5) of the Act after March 31, 2013; and

  • (q) section 57 does not apply in respect of a specified residential complex situated in British Columbia if tax in respect of the first taxable supply of the complex made by the builder referred to in paragraph 57(1)(a) becomes payable because of subsection 168(5) of the Act, or is deemed under section 191 of the Act to have been paid, on or after April 1, 2013, unless an application for a rebate, the amount of which is determined under subsection 57(4), is filed with the Minister before February 17, 2012.

PART 12

REGULATIONS AMENDING VARIOUS GST/HST REGULATIONS

44. Section 13 of the Regulations Amending Various GST/HST Regulations (see footnote 12) is replaced by the following:

13. Until December 31, 2011, the children’s car seats referred to in the Deduction for Provincial Rebate (GST/HST) Regulations, as amended by sections 9 to 11, may, instead of conforming to the requirements of the Motor Vehicle Restraint Systems and Booster Seats Safety Regulations, conform to the requirements of the Motor Vehicle Restraint Systems and Booster Cushions Safety Regulations as they read on May 11, 2010 and as they were modified in their application by the Order Modifying the Operation of the Motor Vehicle Restraint Systems and Booster Cushions Safety Regulations and the Motor Vehicle Safety Regulations, which came into effect on May 1, 2009 and was published in the Canada Gazette, Part Ⅰ, on May 9, 2009.

PART 13

APPLICATION

45. Section 2 of the British Columbia HST Regulations, as enacted by section 1, applies

  • (a) for the purposes of calculating tax in respect of any supply (other than a supply by way of sale of real property) made before April 1, 2013, but only in respect of the portion of the tax that
    • (i) becomes payable after March 31, 2013, without having been paid before April 1, 2013, or

    • (ii) is paid after March 31, 2013 without having become payable;
  • (b) for the purposes of calculating tax in respect of any supply by way of sale of real property made before April 1, 2013, in respect of which tax becomes payable because of subsection 168(5) of the Act after March 31, 2013;

  • (c) for the purposes of applying section 172.1 of the Act in respect of a fiscal year of a person that ends after March 31, 2013, except that in respect of the fiscal year of a person that includes April 1, 2013
    • (i) if the person is a participating employer of a pension plan (as those terms are defined in Part ⅠX of the Act) that acquires property or a service for the purpose of making a supply of all or part of the property or service to a pension entity (as defined in that Part) of the pension plan before April 1, 2013, the amount determined for B for British Columbia in the formula in paragraph 172.1(5)(c) of the Act in respect of a taxable supply of all or part of the property or service that is deemed to have been made under paragraph 172.1(5)(a) of the Act is to be determined as if the tax rate for British Columbia on the last day of the fiscal year were 7%, and

    • (ii) the amount determined for B for British Columbia in the formula in paragraph 172.1(6)(c) or (7)(c) of the Act in respect of a taxable supply deemed to have been made under paragraph 172.1(6)(a) or (7)(a) of the Act, as the case may be, is to be determined as if the tax rate for British Columbia on the last day of the fiscal year were the rate determined by the formula
    • 7% × (A⁄B)

    • where
    • A is the number of days in the fiscal year that are before April 1, 2013, and
    • B is the number of days in the fiscal year;
  • (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 after March 31, 2013;

  • (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 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 after March 31, 2013, by reason of the person carrying on the construction;

  • (f) for the purposes of the description of A in paragraph 202(4)(b) of the Act in respect of a taxation year of a registrant that ends after March 31, 2013, except that in respect of the taxation year of the registrant that includes April 1, 2013 the amount determined for A is to be determined as if the tax rate for British Columbia on the last day of the taxation year were 1.75%; and

  • (g) for the purposes of determining the tax rate for British Columbia in determining the amount for that province that, under subsection 225.2(2) of the Act, is required to be added to, or may be deducted from, the net tax for a reporting period of a financial institution that ends after March 31, 2013.

46. Sections 3 and 5 to 9 of the British Columbia HST Regulations, as enacted by section 1, subsection 42(1) and section 43 are deemed to have come into force on February 17, 2012.

47. Section 10 of the British Columbia HST Regulations, as enacted by section 1, is deemed to have come into force on August 26, 2011.

48. Section 11 of the British Columbia HST Regulations, as enacted by section 1, applies to any agreement varied, altered or terminated on or after August 26, 2011 and to any new agreement entered into on or after that day.

49. Section 12 of the British Columbia HST Regulations, as enacted by section 1, applies to any transaction made on or after August 26, 2011.

50. Section 2 comes into force on April 1, 2015.

51. Subsections 3(1) and (3) apply in respect of any reporting period of a provincial gaming authority that begins after February 28, 2014.

52. Subsection 3(2) applies in respect of a reporting period of a provincial gaming authority that includes February 28, 2014.

53. Sections 4 and 5, the definition “specified time” in section 26 of the New Harmonized Value-added Tax System Regulations, No. 2, as enacted by subsection 27(2), and sections 28 to 30 apply in respect of any reporting period of a person that ends on or after July 1, 2010.

54. Sections 6, 20 21, 23 and 32 and subsections 41(2) and 42(2) come into force on April 1, 2013.

55. Sections 7 and 8 apply for the purpose of determining a rebate under section 259 of the Act of a person for any claim period ending after March 31, 2013, except that the rebate is to be determined as if those sections had not come into force for the purpose of determining a rebate of a person for the claim period of the person that includes April 1, 2013 in respect of

  • (a) an amount of tax that became payable by the person before April 1, 2013;

  • (b) an amount that is deemed to have been paid or collected by the person before April 1, 2013; or

  • (c) an amount that is required to be added in determining the person’s net tax as a result of
    • (i) a branch or division of the person becoming a small supplier division before April 1, 2013, or

    • (ii) the person ceasing to be a registrant before April 1, 2013.

56. Section 9 applies for the purpose of determining a rebate under section 259 of the Act for any claim period beginning after 2012.

57. Section 12 is deemed to have come into force on April 1, 1999.

58. Section 13 applies for the purpose of determining the net tax of a registrant for reporting periods ending after March 31, 2013, except that the quick-method rate of the registrant for the reporting period of the registrant that includes April 1, 2013 and that applies in respect of a supply is, in respect of consideration for the supply that is paid or becomes due before April 1, 2013, the quick-method rate of the registrant for that reporting period that would apply if that section had not come into force.

59. Sections 14 and 17 apply for the purpose of determining the net tax of a registrant for reporting periods beginning after 2012.

60. Section 15 applies for the purpose of determining the net tax of a registrant for reporting periods ending after March 31, 2013, other than in respect of the portion of the registrant’s net specified supplies (within the meaning of subsection 15(5.1) of the Streamlined Accounting (GST/HST) Regulations) for the reporting period of the registrant that includes April 1, 2013 that is attributable to supplies that are made before April 1, 2013 through a permanent establishment of the registrant in British Columbia.

61. Section 16 applies for the purpose of determining the net tax of a registrant for reporting periods ending after March 31, 2013, except that the special quick-method rate of the registrant for the reporting period of the registrant that includes April 1, 2013 and that applies in respect of a supply is, in respect of consideration for the supply that is paid or becomes due before April 1, 2013, the special quick-method rate of the registrant for that period that would apply if that section had not come into force.

62. Section 18 is deemed to have come into force

  • (a) with respect to A Book of My Own Literacy Campaign, on March 30, 2012; and

  • (b) with respect to COMQUAT Inc., on the day that is four years before the day on which these Regulations are published in the Canada Gazette.

63. Subsection 19(1) applies in respect of amounts that are required to be included in computing an individual’s income for the purposes of the Income Tax Act for the individual’s 2013 taxation year.

64. Subsection 19(2) applies in respect of amounts that are required to be included in computing an individual’s income for the purposes of the Income Tax Act for the individual’s 2014 and subsequent taxation years.

65. Section 33.1 of the New Harmonized Value-added Tax System Regulations, as enacted by section 22, applies in respect of a supply by way of sale of a specified motor vehicle made

  • (a) on or after the day on which these Regulations are published in the Canada Gazette ; or

  • (b) on or after July 1, 2010 and before the day on which these Regulations are published in the Canada Gazette if
    • (i) the vehicle was delivered or made available in a participating province and was registered under the laws of another province, and

    • (ii) the supplier,
      • (A) in the case where the other province is a participating province, charged or collected an amount as or on account of tax under subsection 165(2) of the Act in respect of the supply calculated at the tax rate for the other province, and

      • (B) in the case where the other province is not a participating province, neither charged nor collected an amount as or on account of tax under subsection 165(2) of the Act in respect of the supply.

66. Section 33.2 of the New Harmonized Value-added Tax System Regulations, as enacted by section 22, applies in respect of any supply made

  • (a) on or after January 1, 2012; or

  • (b) on or after May 1, 2010 and before January 1, 2012 unless the supplier charged or collected tax under subsection 165(2) of the Act in respect of the supply at a rate of 8% on the value of the consideration for the supply.

67. Sections 26 and 44 are deemed to have come into force on July 1, 2010.

68. Subsection 34(1) applies in respect of a supply of a residential complex in respect of which tax becomes payable because of subsection 168(5) of the Act after March 31, 2012.

69. Subsections 34(2) to (5) apply in respect of a supply of a residential complex in respect of which tax becomes payable because of subsection 168(5) of the Act after March 31, 2013.

70. Section 35 and subsections 36(2) to (5) apply in respect of a building, or a part of a building, in which a residential unit forming part of a residential complex is situated if the builder of the complex is deemed under section 191 of the Act to have made a supply of the complex after March 31, 2013.

71. Subsection 36(1) applies in respect of a building, or a part of a building, in which a residential unit forming part of a residential complex is situated if the builder of the complex is deemed under section 191 of the Act to have made a supply of the complex after March 31, 2012.

72. Section 37 and subsection 38(2) apply in respect of a supply made by a cooperative housing corporation to an individual of a share of the capital stock of the corporation if tax in respect of the supply, referred to in paragraph 255(2)(a) of the Act, of the complex to the corporation becomes payable because of subsection 168(5) of the Act, or is deemed under section 191 of the Act to have been paid, after March 31, 2013.

73. Subsection 38(1) applies in respect of a supply made by a cooperative housing corporation to an individual of a share of the capital stock of the corporation if tax in respect of the supply, referred to in paragraph 255(2)(a) of the Act, of the complex to the corporation becomes payable because of subsection 168(5) of the Act, or is deemed under section 191 of the Act to have been paid, after March 31, 2012.

74. Subsections 38(4) and 40(11) come into force on April 1, 2017.

75. Subsection 39(1) applies to any rebate that is in respect of a residential complex in respect of which the construction or substantial renovation is substantially completed after March 31, 2012 and for which an application is filed with the Minister of National Revenue after that day.

76. Subsections 39(2) to (4), (6) and (7) apply to any rebate in respect of a residential complex for which an application is filed with the Minister of National Revenue after March 31, 2017.

77. Subsection 40(1) applies in respect of a residential complex, an interest in a residential complex or an addition in respect of which the particular time referred to in paragraph 256.2(3)(b) of the Act is after March 31, 2012.

78. Subsections 40(2) and (13) apply in respect of a residential complex, an interest in a residential complex or an addition in respect of which the particular time referred to in paragraph 256.2(3)(b) of the Act is after March 31, 2013.

79. Subsection 40(3) applies in respect of a residential complex or addition in respect of which the particular time referred to in paragraph 256.2(4)(c) of the Act is after March 31, 2012.

80. Subsection 40(4) applies in respect of a residential complex or addition in respect of which the particular time referred to in paragraph 256.2(4)(c) of the Act is after March 31, 2013.

81. Subsection 40(5) applies in respect of a residential unit included in a residential complex if tax in respect of the supply, referred to in subparagraph 256.2(5)(a)(i) or (ii) of the Act, of the complex becomes payable because of subsection 168(5) of the Act, or is deemed under section 191 of the Act to have been paid, after March 31, 2012.

82. Subsection 40(6) applies in respect of a residential unit included in a residential complex if tax in respect of the supply, referred to in subparagraph 256.2(5)(a)(i) or (ii) of the Act, of the complex becomes payable because of subsection 168(5) of the Act, or is deemed under section 191 of the Act to have been paid, after March 31, 2013.

83. Subsections 40(7) and (8) apply in respect of an exempt supply of land made by a person that results in the person being deemed to have made the taxable supply of the land referred to in subparagraph 256.2(6)(a)(ii) and to have paid tax after March 31, 2012 in respect of that supply.

84. Subsection 40(9) applies in respect of an exempt supply of land made by a person that results in the person being deemed to have made the taxable supply of the land referred to in subparagraph 256.2(6)(a)(ii) and to have paid tax after March 31, 2013 in respect of that supply.

85. Subsection 40(12) is deemed to have come into force on July 1, 2010, except that, if a person has filed an application for a rebate under section 259 of the Act before April 1, 2013 and, in determining the amount of that rebate, the person has included all or part of the amount of tax that the person would otherwise be entitled to include in determining the amount of a particular rebate under subsection 256.21(1) of the Act in respect of real property, the following rules apply:

  • (a) subsection 47(12.2) of the New Harmonized Value-added Tax System Regulations, No. 2, as enacted by subsection 40(12), does not apply in respect of the particular rebate;

  • (b) the person may, despite subsections 47(11) and (11.1) of those Regulations, file an application for the particular rebate before April 1, 2013;

  • (c) if, in the absence of this paragraph, the particular rebate would not be payable to the person only because of the application of subsection 256.2(7) of the Act in relation to another rebate under section 256.2 of the Act in respect of the real property, for the purpose of applying any of subsections 47(3) to (10) of those Regulations in respect of the real property, the person is deemed to be entitled to claim the other rebate; and

  • (d) any part of a rebate under section 259 of the Act claimed by the person that is attributable to the tax included in determining the amount of the particular rebate is to be deducted from the amount of the particular rebate.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issue and objectives

On August 26, 2011, following the provincial referendum on the elimination of the harmonized sales tax (HST) in British Columbia (B.C.), the Government of B.C. announced that it would seek to eliminate the HST in B.C. and return to the application of a provincial sales tax (PST) in the province by April 1, 2013.

Transitional rules are required to facilitate B.C.’s decision to exit the HST in order to set out how and when the HST will cease to apply to various transactions that straddle the March 31, 2013, HST end-date in B.C. Details of these transitional rules were released on February 17, 2012, in a Department of Finance news release. The Regulations Amending Various GST/HST Regulations, No. 3 (the Regulations) formalize and give legal effect to this previous announcement.

In addition, on February 17, 2012, B.C. announced its intention to enhance its new housing rebates in respect of the B.C. component of the HST from April 1, 2012, to March 31, 2013. These Regulations are therefore also required to implement this element of provincial tax policy flexibility under the Comprehensive Integrated Tax Co-ordination Agreement between Canada and B.C.

In addition to the above previously announced rules relating to B.C.’s exit from the HST, the Regulations include other previously announced amendments to the regulations under the Excise Tax Act (ETA). The Regulations also implement two new HST place of supply rules and make technical housekeeping amendments to ensure the proper operation of certain goods and services tax (GST)/HST regulations.

All of the provisions contained in the Regulations are amendments to existing GST/HST regulations.

Description and rationale

With the passage of the Provincial Choice Tax Framework Act on December 15, 2009, Parliament approved mechanisms to facilitate the application of the harmonized value-added tax system by way of regulations.

These Regulations contain rules relating to the harmonized value-added tax system, as well as the GST. Specifically, the Regulations include amendments to the following regulations:

  • British Columbia HST Regulations;
  • Games of Chance (GST/HST) Regulations;
  • Taxes, Duties and Fees (GST/HST) Regulations;
  • Public Service Body Rebate (GST/HST) Regulations;
  • Agriculture and Fishing Property (GST/HST) Regulations;
  • Streamlined Accounting (GST/HST) Regulations;
  • Federal Book Rebate (GST/HST) Regulations;
  • Automobile Operating Expense Benefit (GST/HST) Regulations;
  • Deduction for Provincial Rebate (GST/HST) Regulations;
  • New Harmonized Value-added Tax System Regulations;
  • New Harmonized Value-added Tax System Regulations, No. 2; and
  • Regulations Amending Various GST/HST Regulations.

British Columbia HST Regulations

On May 25, 2011, B.C. announced that the provincial component of the HST rate would be reduced by one percentage point (to 6%) on July 1, 2012, and be further reduced (to 5%) on July 1, 2014, if the result of the referendum on the HST in B.C. provided for retaining the HST in B.C. Since the result of the referendum was in favour of eliminating the HST in B.C., these Regulations never applied. The provisions contained in these Regulations are therefore replaced by transitional rules for the elimination of the HST in B.C., which specify how and when the 7% provincial component of the HST for B.C. ceases to apply to transactions that straddle the March 31, 2013, HST end date in B.C. Details of the transitional rules were released by the Department of Finance on February 17, 2012.

One refinement to the rules released for consultation on February 17, 2012, is included in these Regulations and relates to the fact that the B.C. component of HST is not to be included in calculating the basic tax content of real property or tangible personal property situated in B.C. as of that date. The basic tax content of property is an amount that is used to determine tax liability or rebates in respect of the property in various circumstances. This amount generally represents the tax paid in respect of the property reduced by a percentage of depreciation based on the fair market value of the property. Under the refined rule, for the purposes of determining an amount to be included in determining a rebate or input tax credit in respect of real property, the provincial component of HST for B.C. would generally remain part of the basic tax content of the property where there is a sale of the property that is subject to HST on or prior to the March 31, 2013, HST end date. The Regulations also exclude B.C.’s 2% transition tax, imposed in respect of certain new housing under B.C.’s New Housing Transition Tax and Rebate Act, from the GST/HST base.

Finally, the Regulations set out rules to prevent persons from improperly taking advantage of the wind-down of the HST in B.C. The anti-avoidance rules in these Regulations apply where persons not dealing at arm’s length with each other enter into transactions to obtain a tax benefit as a result of the elimination of the 7% provincial component of HST for B.C. and not primarily for bona fide purposes other than to obtain the tax benefit. In these circumstances, the Regulations allow the Minister of National Revenue to assess the participants in the transactions in order to deny the tax benefit.

Games of Chance (GST/HST) Regulations

These Regulations set out special rules under which provincial gaming authorities (e.g. provincial lottery and casino corporations) compute their GST/HST remittances.

These Regulations are amended consequential to B.C.’s decision to exit the HST by amending the rules that require a provincial gaming authority to remit HST on taxable benefits provided to an employee of the authority that reports to work in B.C. For 2013, provincial gaming authorities would remit HST at transitional rates in respect of such benefits. For 2014 and later years, provincial gaming authorities would remit GST only in respect of such benefits.

These Regulations are also amended to clarify that, in accordance with previous announcements, a provincial gaming authority that qualifies as a large business is required to recapture provincial input tax credits in certain circumstances and may deduct previously recaptured provincial input tax credits in respect of certain motor vehicles that the authority sells or removes from Ontario or B.C.

Taxes, Duties and Fees (GST/HST) Regulations

These Regulations exclude certain provincial taxes from the GST/HST base. The main exclusions are provincial land transfer taxes, general PSTs and certain specific ad valorem provincial taxes that are imposed on a property or service in lieu of a general PST.

The Regulations are amended to add a reference to B.C.’s Provincial Sales Tax Act to the list of exclusions from the GST/HST base consequential to the elimination of the HST in B.C. and the implementation of a PST in B.C.

Public Service Body Rebate (GST/HST) Regulations

Under the GST/HST, public service bodies (PSBs) such as hospitals, schools, universities, public colleges, municipalities, charities and substantially government-funded non-profit organizations are entitled to claim full or partial rebates of the tax paid on their purchases of property and services for use in non-commercial activities. The GST/HST legislation sets out the rules relating to these rebates and provides the authority to prescribe the rebate rates applicable to the provincial component of the HST for each class of PSB, the property and services in respect of which rebates are disallowed and rules for calculating the rebates. The Regulations contain these prescribed rates and rules.

The Regulations are amended to remove the rebate rates relating to the provincial component of HST for B.C. PSBs consequential to B.C.’s decision to exit the HST.

The Regulations are also amended to implement a measure announced in Budget 2012 to double the existing thresholds under which small businesses and PSBs qualify to elect to use streamlined accounting methods which simplify GST/HST compliance. Under this amendment, eligible PSBs with annual taxable sales of $1 million or less (currently, $500,000 or less) and annual taxable purchases of $4 million or less (currently, $2 million or less) may use a simplified method for calculating their PSB rebate entitlement.

Agriculture and Fishing Property (GST/HST) Regulations

These Regulations have the effect of relieving the purchase of certain items from the GST/HST. The list of tax-free items is limited to major items acquired exclusively by farmers and fishers. This includes the supply of a fishing vessel if the recipient provides the number of their fishing licence. The Regulations state that, in the case of commercial fishing in the Yukon Territory or the Northwest Territories, a valid license for this purpose is any commercial fishing licence that was issued to the recipient by the Department of Fisheries and Oceans.

This provision predates the creation of Nunavut on April 1, 1999, and had not been updated since that time. A housekeeping amendment is made to the Regulations to add a reference to the Territory of Nunavut, retroactive to the creation of Nunavut, to reflect the original intent of the Regulations.

Streamlined Accounting (GST/HST) Regulations

These Regulations provide small businesses and eligible PSBs optional simplified methods of calculating their GST/HST remittances. The Quick and Special Quick methods allow the business or PSB to remit an amount of tax that is a percentage (the “remittance rate”) of its eligible GST/HST-included sales. This allows the entity to avoid having to keep track of the GST/HST paid on purchases and collected on sales separately. Certain extraordinary transactions are excluded from these rules (e.g. the sale or purchase of real property). In such cases, the tax must be accounted for separately under the normal GST/HST rules. Currently, most small businesses with annual GST/HST-included taxable sales of $200,000 or less may use the Quick Method for calculating their net GST/HST remittance. Under the Special Quick Method that PSBs can generally elect to use, no sales threshold restriction applies.

These Regulations also provide the Streamlined Input Tax Credit Method, which provides a simplified process of determining input tax credits and is available for most businesses and PSBs with $500,000 or less in annual taxable sales and $2 million or less in annual taxable purchases.

The Regulations are amended to implement a measure announced in Budget 2012 to double the existing $200,000, $500,000 and $2-million thresholds under which small businesses and PSBs qualify to use the Quick Method and Streamlined Input Tax Credit Method to $400,000, $1 million and $4 million respectively. The Regulations are also amended to change the remittance rates relating to B.C. under the Quick and Special Quick methods consequential to B.C.’s decision to exit the HST.

Federal Book Rebate (GST/HST) Regulations

These Regulations prescribe charities and qualifying non-profit organizations whose primary purpose is the promotion of literacy that are eligible for a 100% rebate of the GST or federal portion of the HST paid on printed books, audio recordings of printed books, and printed versions of religious scriptures.

The Regulations are amended to add A Book of My Own Literacy Campaign and COMQUAT Inc. to the list of charities and qualifying non-profit organizations that are prescribed for the purposes of the rebate. These and other charities and qualifying non-profit organizations on the list may also qualify for the GST rebate for books to be given away for free that was announced in Budget 2012 and passed as part of the Jobs, Growth and Long-term Prosperity Act.

Automobile Operating Expense Benefit (GST/HST) Regulations

These Regulations prescribe the rates of GST/HST applicable to the value of an automobile operating expense benefit, which is the personal portion of automobile operating expenses paid by employers or corporations, reported as income for income tax purposes by an employee or shareholder.

The Regulations are amended by updating the prescribed rates consequential to B.C.’s decision to exit the HST.

Deduction for Provincial Rebate (GST/HST) Regulations

These Regulations facilitate the delivery of point-of-sale rebates of the provincial component of the HST that are provided by provinces that participate in the harmonized value-added tax system.

These Regulations are amended consequential to B.C.’s decision to exit the HST by removing B.C.’s listed point-of-sale rebates.

New Harmonized Value-added Tax System Regulations

These Regulations contain various rules that relate to the harmonized value-added tax system under the ETA, including HST place of supply rules. The HST place of supply rules generally specify whether, and at what rate, the provincial component of the HST is required to be charged in respect of a supply made in Canada. These Regulations are amended to add two new HST place of supply rules.

The first rule provides that motor vehicles that are delivered or made available in an HST province and are registered in another province within seven days of delivery are considered to have been supplied in the other province provided that the supplier maintains evidence supporting that registration. As a result of this change, automobile dealers in HST provinces would not be required to collect the provincial component of the HST on their sales of vehicles when the vehicles are to be registered in non-HST provinces.

The second rule provides that a supply of an airport screening service made to the Canadian Air Transport Security Authority is considered to have been made in a province if all or substantially all of the service is performed at an airport situated in the province.

New Harmonized Value-added Tax System Regulations, No. 2

These Regulations also contain various rules that relate to the harmonized value-added tax system under the ETA. Among other things, these Regulations include rules providing for the recapture of the provincial component of input tax credits in certain circumstances, rebates for the provincial component of HST on purchases of newly constructed or substantially renovated housing, rental housing and land rented for residential use, transitional rules for real property transactions relating to the implementation of the HST in Ontario and B.C., rules relating to the movement of goods and services between an HST province and another province and various other rules that ensure the proper operation of the harmonized value-added tax system.

The Regulations are amended to implement enhancements to B.C.’s new housing rebates that were announced by B.C. on February 17, 2012, and generally effective from April 1, 2012, until the end of the HST in B.C. on March 31, 2013.

The Regulations are also amended consequential to B.C.’s decision to exit the HST by

  • removing the reference to B.C.’s provincial tax on private sales of vehicles from the list of “specified provincial taxes” prescribed under the Regulations, which is used to establish the value of a vehicle for the purposes of applying the B.C. component of the HST when a vehicle is brought into B.C. from outside the province;
  • permitting large businesses and financial institutions using an instalment method for the recapture of the provincial component of input tax credits in certain circumstances to recalculate and potentially reduce their instalments so that the instalments are not based on previous amounts of B.C. recaptured input tax credits for reporting periods ending after the March 31, 2013, HST end date in B.C.; and
  • winding down B.C.’s new housing rebates in respect of the B.C. component of the HST, as well as the transitional new housing tax and transitional new housing rebates that were implemented as part of the transitional rules for B.C. harmonization.

The Regulations are also amended to allow monthly and quarterly GST/HST filers that, in certain circumstances, are required to recapture the provincial component of input tax credits an additional reporting period to account for such amounts in accordance with draft legislative proposals released by the Department of Finance on October 31, 2011.

The Regulations also include clarifying amendments to ensure that a PSB that builds or purchases new rental housing has the choice of claiming, where applicable, either an Ontario or B.C. new residential rental property rebate or an Ontario or B.C. PSB rebate in respect of the provincial component of the HST in line with announcements by Ontario and B.C., respectively made on November 18 and 19, 2009. Amendments are also made to provide for rules applicable to situations where both rebates are claimed.

Finally, minor housekeeping amendments ensure the ongoing proper operation of the Regulations.

Regulations Amending Various GST/HST Regulations

These Regulations included, among other things, amendments to the Deduction for Provincial Rebate (GST/HST) Regulations to implement the provincial point-of-sale rebates for Ontario and B.C.

To ensure the proper operation of a mechanism facilitating the delivery of the point-of-sale rebate for children’s car seats, an amendment to a transitional provision of these Regulations is made consequential to Transport Canada’s decision to allow a further 12 months (to December 31, 2011) for manufacturers to complete the testing, research and certification of car seats as required under new regulations made under the Motor Vehicle Safety Act. Until that date, manufacturers had the option of producing car seats that meet either the new regulations or the previous regulatory requirements.

As a result, the point-of-sale rebate in respect of the provincial component of HST for Ontario and B.C. would apply to children’s car seats sold between January 1 and December 31, 2011, that comply with either set of regulatory requirements.

Consultation

Most of the Regulations deal with B.C.’s exit from the HST and were developed in consultation with the Government of B.C. The Canada Revenue Agency was also consulted on the Regulations. The Regulations were also designed to reflect previous GST/HST announcements of rules made on various dates, on which stakeholders have had the opportunity to comment.

Contacts

Rob Ives
Sales Tax Division
Department of Finance
140 O’Connor Street
Ottawa, Ontario
K1A 0G5
Telephone: 613-943-0619

Marcel Boivin
Excise and GST/HST Rulings Directorate
Canada Revenue Agency
320 Queen Street
Ottawa, Ontario
K1A 0L5
Telephone: 613-954-3772

Footnote a
S.C. 2009, c. 32, s. 23(1)

Footnote b
S.C. 1993, c. 27, s. 125(1)

Footnote c
S.C. 2009, c. 32, s. 37(1)

Footnote d
R.S., c. E-15

Footnote 1
SOR/2011-121

Footnote 2
SOR/91-28; SOR/98-440; SOR/2011-56

Footnote 3
SOR/91-34; SOR/2006-280

Footnote 4
SOR/91-37; SOR/2010-152

Footnote 5
SOR/91-39; SOR/2000-68

Footnote 6
SOR/91-51; SOR/2006-162

Footnote 7
SOR/98-351

Footnote 8
SOR/99-176

Footnote 9
SOR/2001-65 

Footnote 10
SOR/2010-117

Footnote 11
SOR/2010-151

Footnote 12
SOR/2010-152