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Statutes of Newfoundland 1994


CHAPTER R-6

CHAPTER R-6.1

AN ACT TO RATIFY, CONFIRM AND ADOPT AN AGREEMENT BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE PROVINCE RESPECTING RECIPROCAL
TAXATION OF THESE GOVERNMENTS AND THEIR AGENCIES

(Assented to December 16, 1994)

Analysis

1. Short title

2. Agreement defined

3. Agreement adopted

4. Effect of agreement

5. Commencement

Schedule

Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:


Short title

1. This Act may be cited as the Reciprocal Taxation Agreement Act, 1994.

Agreement defined

2. In this Act "agreement" refers to the agreement executed and delivered by and between the Government of Canada and the Government of the Province of Newfoundland dated January 18, 1994 and set out in the Schedule to this Act.

Agreement adopted

3. From January 1, 1994, the agreement is ratified, confirmed and adopted and declared to be valid and binding on the Crown and its agents.

Effect of agreement

4. (1) The agreement so far as it binds the Crown and its agents has the force and effect of law for all purposes as if expressly enacted in this Act.

(2) For the avoidance of doubt

(a) paragraph 13(1)(a) of the Gasoline Tax Act is not applicable in respect of Her Majesty in right of Canada while the agreement is in force; and

(b) the expression "tax" as defined in the Gasoline Tax Act includes amounts paid under the agreement instead of taxes or fees.

Commencement

5. This Act shall be considered to have come into force on January 1, 1994.

 

Schedule

Analysis

1. Interpretation

2. Application

3. Covenants by Canada

4. Covenants by the Province

5. Housing

6. Motor Vehicle Fleet
Management Services

7. Third Party Acquisitions

8. Equality of Treatment

9. Settlement of Disputes

10. Application of Provincial Acts to Federal Crown
Corporations and Agencies Listed in Schedule I to the Fiscal Arrangements Act

11. Application of the Federal Act to Provinces and
Provincial Agencies

12. Termination of Earlier Agreement

13. Effective Date

14. Duration

15. Amendment

16. Renewal

17. Undertaking to Inform

18. Saving

Schedule A

Schedule B

 

AGREEMENT

Memorandum of Agreement made this 18th day of January, 1994.

BETWEEN:

The Government of Canada (hereinafter referred to as "Canada"), as represented herein by the Minister of Finance (hereinafter referred to as "the Federal Minister")

OF THE FIRST PART;

AND

The Government of Newfoundland and Labrador (hereinafter referred to as "the Province"), as represented herein by the Minister of Finance and the Premier as Minister Responsible for Intergovernmental Affairs (hereinafter referred to as "the Provincial Minister")

OF THE SECOND PART.

WHEREAS the parties hereto wish to enter into an agreement under which each party will bear or pay the taxes and fees of the other party as specified herein.

AND WHEREAS the Federal Minister is authorized by section 32 of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, R.S.C. 1985, c. F-8 to enter into this agreement and the Provincial Minister has been authorized to enter into this agreement pursuant to Order-in-Council 93-882.

AND WHEREAS it is agreed that neither Canada nor the Province shall be deemed by reason of having entered into this agreement to have surrendered, abandoned or given over to the other any of the powers, rights, privileges, or authorities vested in it under the provisions of the Constitution of Canada, and any amendments thereto, or otherwise, or to have impaired any of such powers, rights, privileges or authorities.

NOW THEREFORE this agreement witnesseth that Canada and the Province covenant and agree as follows:

Interpretation

1. In this agreement,

(a) "Federal Act", means the Excise Tax Act, R.S.C. 1985, c. E-15, as amended, and all regulations made thereunder, as amended,

(b) "federal tax", means all taxes and excises imposed or levied under the Federal Act, other than the Goods and Services Tax,

(c) "Fiscal Arrangements Act", means the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, R.S.C. 1985, c. F-8, as amended,

(d) "Goods and Services Tax", means the tax imposed or levied under Part IX of the Federal Act,

(e) "Provincial Sales Tax", means a tax as defined under The Retail Sales Act, R.S.N., Chapter R-15, 1990 as amended,

(f) "provincial tax or fee", means a tax or fee, other than Provincial Sales Tax, that is a provincial tax or fee as defined for the purposes of Part VII of the Fiscal Arrangements Act and, for greater certainty, includes any such tax or fee which is imposed or levied under any of the following statutes:

- The Gasoline Tax Act, R.S.N., Chapter G-1, 1990

- The Highway Traffic Act, R.S.N., Chapter H-3, 1990

- The Tobacco Tax Act, R.S.N., Chapter T-5, 1990

- The Motorized Snow Vehicles and All-Terrain Vehicles Act, R.S.N., Chapter M-20, 1990

Application

2. This agreement is binding on Canada and the Province and their respective agents.

Covenants by Canada

3. (1) Canada covenants that, where, in respect of any transaction, matter or thing, any provincial tax or fee is imposed or levied that would be payable by Canada if that tax or fee were applicable to Canada, Canada shall pay that tax or fee.

(2) Canada covenants that, where, in respect of any transaction, matter or thing, the Provincial Sales Tax or any provincial tax or fee is imposed or levied and would be payable by a corporation or agency listed in Schedule I to the Fiscal Arrangements Act if the Provincial Sales Tax or the provincial tax or fee were applicable to that corporation or agency, the corporation or agency shall pay the Provincial Sales Tax or the provincial tax or fee, as the case may be, where it would be required to do so if that law were applicable to it, and furthermore, that in respect thereof, Canada covenants to take such actions or measures, as Canada deems necessary, for the purposes of implementing this covenant.

(3) Canada covenants that, where, in respect of the sale of goods or services by Canada to its employees, members of the Canadian Forces, and the public at large, the Provincial Sales Tax or any provincial tax or fee Canada would be required to collect under the law of the Province if that law were applicable to Canada, it will collect the Provincial Sales Tax or the provincial tax or fee, as the case may be, and shall remit all the amounts so collected to the Province in the manner and at the times provided for in the applicable Provincial law.

(4) Canada covenants:

(a) to pay interest, in respect of the Provincial Sales Tax or any provincial tax or fee collectible by Canada in accordance with this clause, where such interest would be payable by Canada if the law under which the Provincial Sales Tax or the provincial tax or fee is imposed or levied were applicable to Canada; and

(b) to pay any other amounts equivalent to the Provincial Sales Tax or the provincial tax or fee that would have been collected by Canada under a law of the Province, but for the failure by Canada to so collect and remit same to the Province.

(5) Canada covenants to introduce legislation, pass or amend the required regulations and to develop the administrative procedures, as Canada deems necessary, to give effect to this agreement.

(6) Canada covenants to include in any similar agreement with any other province a provision similar to subclause 9(4).

Covenants by the Province

4. (1) The Province covenants that, where, in respect of any transaction, matter or thing, any federal tax is imposed or levied, and that tax would be payable by the Province if that tax were applicable to the Province, the Province shall pay that tax in accordance with the Federal Act.

(2) The Province covenants that, where, in respect of any transaction, matter or thing, the Goods and Services Tax is imposed or levied and would be payable by a corporation or agency of the Province if the Goods and Services Tax were applicable to such corporation or agency, the corporation or agency, except for those corporations or agencies listed in Schedule A, shall pay the Goods and Services Tax where it would be required to do so if that law were applicable to it, and furthermore, that in respect thereof, the Province covenants to take such actions or measures, as the Province deems necessary, for the purposes of implementing this covenant.

(3) The Province covenants that, where, in respect of any transaction, matter or thing, any federal tax is imposed or levied and would be payable by a corporation or agency of the Province if the federal tax were applicable to such corporation or agency, the corporation or agency shall pay the federal tax where it would be required to do so if that law were applicable to it, and furthermore, that in respect thereof, the Province covenants to take such actions or measures, as the Province deems necessary, for the purposes of implementing this covenant.

(4) The Province covenants to satisfy any tax exigible under Parts III, IV or VI of the Federal Act on goods imported by the Province to the same extent as Canada is required to pay the said tax on any importation of goods.

(5) The Province covenants that it shall neither apply for, nor claim the benefit of, any refund of federal tax paid under Parts II.I, III, IV or VI of the Federal Act, or any payment in respect of such tax, for which provision is made in sections 68.14 or 68.19 of the Federal Act, and further, that the Province agrees that no refund or payment in respect of tax paid under the aforesaid Parts shall be granted under sections 68.14 or 68.19 to a manufacturer, producer, wholesaler, licensee, jobber or other dealer as the case may be.

(6) The Province covenants that, in respect of a supply of goods or services by the Province to its employees or the public at large, the Province will collect and remit the Goods and Services Tax in accordance with the Federal Act.

(7) The Province covenants:

(a) to pay interest, in respect of any tax imposed or levied under the Federal Act due or collectible by the Province in accordance with this clause, where such interest would be payable by the Province if the Federal Act were applicable to the Province; and

(b) to pay any other amounts equivalent to any tax imposed or levied under the Federal Act collectible and remittable under that Act in accordance with this agreement, but for the failure by the Province to so collect and remit same to Canada.

(8) The Province covenants to introduce legislation, pass or amend the required regulations and develop the administrative procedures, as the Province deems necessary, to give effect to this agreement.

Housing

5. In respect of any corporation or agency of the Province listed in Schedule B, the following rules shall apply:

(a) the corporation or agency shall pay the federal tax and the Goods and Services Tax in accordance with subclause 4(2);

(b) for purposes of section 259 of the Federal Act, the corporation or agency will be designated a municipality in respect of activities of the corporation or agency relating to the construction and delivery of social housing; and,

(c) where property or service is acquired or imported by any such corporation or agency for consumption, use or supply in the course of a commercial activity of the corporation or agency, the corporation or agency may claim an input tax credit in accordance with The Federal Act in respect of such property or service; and,

(d) rebates of the Goods and Services Tax paid by any such corporation or agency on expenditures relating to administration and overhead may be claimed under section 261 of the Federal Act.

Motor Vehicle Fleet Management Services

6. Where a supply is made to Canada of a motor vehicle fleet management maintenance service that is provided by a third party independent contractor to Canada under an agreement in writing regarding motor vehicle maintenance and repair pursuant to which agreement the contractor

(a) agrees to accept the liability for payment for goods provided and services rendered to maintain motor vehicles owned by Canada

(b) maintains and provides to Canada on a regular and periodic basis information regarding the maintenance history and expected needs of motor vehicles owned by Canada, and

(c) provides to Canada on a regular and periodic basis a single consolidated invoice of all payments made by the contractor for goods provided and services rendered to maintain motor vehicles owned by Canada

the payments made by the contractor in satisfaction of the liability assumed under paragraph (a) shall be deemed to be a payment made by Canada in respect of a supply received by Canada and, therefore, not subject to Provincial Sales Tax at point of purchase.

Third Party Acquisitions

7. (1) The Province covenants to pay the Goods and Services Tax in respect of all supplies of property or of services acquired by or on behalf of the Province where such supplies are acquired other than in the name of the Province and are;

(a) acquired by employees of the Province in the course of employment related travel including supplies of transportation, meals, accommodation, taxi services, incidental travel related expenses; or,

(b) purchased out of petty cash.

(2) The Province covenants that it shall neither apply for, nor claim the benefit of, any input tax credit, refund, rebate or remission of any amount paid, by reason of subsection (1), as or on account of the Goods and Services Tax.

(3) For the purposes of subclauses (1) and (2), "Province" includes the corporations and agencies listed in Schedule A.

(4) Canada covenants to pay the Provincial Sales Tax in respect of property or of a service acquired by or on behalf of Canada where such property or service is acquired other than in the name of Canada and is;

(a) acquired by employees of Canada in the course of employment related travel including supplies of transportation, meals, accommodation, taxi services, incidental travel related expenses; or,

(b) purchased out of petty cash.

(5) Canada covenants that it shall neither apply for, nor claim the benefit of, any input tax credit, refund, rebate or remission of any amount paid, by reason of subsection (4), as or on account of the Provincial Sales Tax.

(6) For purposes of subclauses (4) and (5), "Canada" includes all corporations and agencies of Canada, other than the corporations and agencies listed in Schedule I of the Fiscal Arrangements Act.

Equality of Treatment

8. (1) Either party undertakes not to discriminate against the other party in the levying or the imposition of any tax or fee herein, and, without limiting the generality of the foregoing, each party agrees not to discriminate against the other party in the establishment, maintenance or administration of an exemption from, or an arrangement for, any rebate or credit of any tax.

(2) The Province undertakes to make all reasonable efforts to enter into agreements with other provinces in order to avoid, wherever possible, the multiple imposition of any tax on Canada in respect of any sale, rental, consumption or use of tangible personal property or services.

(3) For the purpose of this agreement and any relevant Provincial legislation, the parties agree that:

(a) any vessel operated by Canada shall be deemed to be a cargo or passenger vessel operated for the purposes of trade and commerce, and

(b) any aircraft operated by Canada shall be deemed to be operated according to a regular flight schedule for the purposes of trade and commerce, and

any tax levied in respect of the sale, rental, consumption or use of any such vessel or aircraft shall be determined accordingly.

Settlement of Disputes

9. (1) Subject to clauses 10 and 11, if the parties hereto fail to agree on the interpretation or application of any provisions of this agreement, either party shall have the right to refer the matter in dispute to a Board of Commissioners constituted in accordance with subclause (2).

(2) Any Board of Commissioners (hereafter referred to as the "Board") shall consist of three members; one member shall be selected by Canada, one member by the Province, and the third member by the two members already selected. If the two selected members fail to agree, the third member of the Board shall be selected by the Chief Justice of the Federal Court of Canada or, in the event of the absence or inability to so select of the Chief Justice, or of there being no Chief Justice, the Acting Chief Justice of the Federal Court of Canada.

(3) The parties agree to facilitate the constitution and functioning of the Board and to supply promptly any information required by the Board.

(4) Canada agrees:

(a) to inform the Province of any dispute arising under an agreement similar to this agreement with another province at least thirty days before the selection of a Board under any provision of the similar agreement similar to subclause (2), and

(b) that any other province that enters into an agreement similar to this agreement shall be an interested party, for all purposes, in any proceeding before a Board selected under subclause (2) and have the right to intervene and to make representations in the same manner as the parties hereto.

(5) The Board shall review any matter in dispute, and the report of the majority of the Board, including any findings and recommendations shall be submitted, as soon as possible, to the parties and to the Federal Minister, who shall within a reasonable time thereafter forward the report to the Governor in Council and all other provinces who have entered into similar agreements. Upon submission of the report the Board shall thereupon be dissolved.

(6) Within a reasonable period of time from the receipt by the Governor in Council of the report, the Governor in Council shall render a decision in respect of the matter in dispute.

(7) The Board shall determine its own rules of procedure.

(8) All reasonable expenses incurred by the Board, which expenses shall not be limited to the Commissioners' remuneration, witness fees, travel expenses and any other administrative costs, shall, in the first instance, be paid by Canada. In the report of the Board made under subclause (5), these expenses shall be apportioned by the board, in its sole discretion, between the parties hereto and amongst any other parties which may have made any representations to the Board.

Application of Provincial Acts to Federal Crown Corporations and Agencies Listed in Schedule I to the Fiscal Arrangements Act

10. (1) In respect of any corporation or agency listed in Schedule I to the Fiscal Arrangements Act, where notwithstanding clause 9 a difference arises as to whether any Provincial Sales Tax or provincial tax or fee is payable, or the extent to which, any tax or fee imposed or levied by the Province is a provincial tax or fee, or as to the amount payable in respect of any tax, the procedures established for the purposes of the Provincial Sales Tax or the provincial tax or fee, as the case may be, shall apply.

(2) The Province will not issue any execution based upon any determination, declaration or judgement made or issued against any corporation or agency listed in Schedule I to the Fiscal Arrangements Act, arising from any judicial proceeding taken and commenced in accordance with subclause (1).

Application of the Federal Act to Provinces and Provincial Agencies

11. (1) Notwithstanding clause 9, where any difference arises as to whether any tax is payable by Her Majesty the Queen in right of the Province, Her agencies, Provincial Crown Corporations, or any manufacturers, producers, wholesalers, licensees, registrants, jobbers or other dealers or what rate or amount of tax is payable under the Federal Act, the procedures established under the Federal Act shall apply.

(2) Canada shall not issue any execution based upon any determination, declaration or judgement made or issued against Her Majesty the Queen in right of the Province, arising from any judicial proceeding taken or commenced in accordance with subclause (1).

Termination of Earlier Agreement

12. The agreement effective the 1st day of January, 1991 between Canada and the Province regarding the payment by one party of the consumption or sales taxes or fees of the other party is hereby terminated.

Effective Date

13. This agreement shall be effective as of the 1st day of January, 1994.

Duration

14. (1) Subject to subclause (2), this agreement shall remain in effect until the 31st day of December, 1998.

(2) Either party may terminate the agreement by giving six months notice in writing to the other party.

(3) The termination of this agreement shall not affect any rights or obligations which may have accrued to either party up to the date of termination.

Amendment

15. (1) Subject to subclause (2), upon the agreement of the parties, this agreement may be amended, altered or changed at any time and any such amendment, alteration or change shall be effected by an exchange of letters between the Federal Minister and the Provincial Minister.

(2) Upon the agreement of the parties, the Schedules to this agreement may be amended, altered or changed at any time and any such amendment, alteration or change may be effected by an exchange of letters between, in the case of Canada, to

The Director
Sales Tax Division
Department of Finance
Government of Canada
Ottawa, Ontario
K1A 0G5

and, in case of the Province, to

The Assistant Deputy Minister
Fiscal and Tax Policy Branch
Department of Finance
P.O. Box 8700
St. John's, Newfoundland
A1B 4J6

Renewal

16. The parties agree that before the 1st day of July 1998 they shall commence discussions with each other for the purpose of entering into another agreement similar to this agreement.

Undertaking to Inform

17. (1) Canada agrees to furnish the Province with notice of and information relating to:

(a) all agreements similar to this agreement entered into between Canada and other provinces, including any amendments and administrative procedures relating thereto;

(b) all amendments to the Federal Act, including any regulations, rules, or administrative procedures relating thereto; and,

(c) all findings or decisions and recommendations of any Board established pursuant to clause 9 (or under similar provisions of agreements or arrangements entered into for purposes similar to that of this agreement with other provinces) and any decision of the Governor in Council regarding a matter in dispute reviewed by the Board under that clause (or a similar provision of an agreement or arrangement entered into for purposes similar to that of this agreement or arrangement with other provinces).

(2) The Province agrees to furnish Canada with notice of and all information relating to:

(a) all amendments to the Provincial Sales Tax or any provincial tax or fee, including any regulations, rules or administrative procedures relating thereto;

(b) all agreements with any other provinces of Canada for the purpose set out in subclause 8(2); and

(c) all decisions of any Provincial court respecting the Provincial Sales Tax or a provincial tax or fee, in which one of the parties thereto is a corporation or agency listed in Schedule I to the Fiscal Arrangements Act.

(3) Any notice which may be given by a party to this agreement, pursuant to this agreement, shall be given to the other party in writing and shall be addressed, in the case of Canada, to

The Director
Sales Tax Division
Department of Finance
Government of Canada
Ottawa, Ontario
K1A 0G5

and, in case of the Province, to

The Assistant Deputy Minister
Fiscal and Tax Policy Branch
Department of Finance
P.O. Box 8700
St. John's, Newfoundland
A1B 4J6

Saving

18. It is understood that neither Canada nor the Province shall be deemed, by reason of having entered into this agreement, to have surrendered or abandoned any of its powers, rights, privileges or authorities under the Constitution of Canada, and any amendments thereto, or to have impaired any such powers, rights, privileges, or authorities.

IN WITNESS WHEREOF the Honourable Paul Martin, Minister of Finance of Canada, has hereunto set his hand on behalf of Canada, and the Honourable Clyde K. Wells, Premier and Minister Responsible for Intergovernmental Affairs of Newfoundland and Labrador and the Honourable Winston Baker, Minister of Finance of Newfoundland and Labrador have hereunto set their hand on behalf of the Province.

Signed on behalf of Canada
by the Honourable Paul Martin, Minister of Finance of Canada, in the presence of:

___________________
(Sgd.)

 

 

 

 


________________________
(Sgd.) Paul Martin
Minister of Finance of Canada

 

 

 

 

 

 

Signed on behalf of the Province by the Honourable Clyde K. Wells, Premier and Minister Responsible for Intergovernmental Affairs of Newfoundland and Labrador, in the presence of:

 

____________________
(Sgd.) Patricia Sheehan

 

 

 

___________________
(Sgd.) F. G. Way
Approved Pursuant to the Intergovernmental Affairs Act by the Premier as Minister Responsible for Intergovernmental Affairs or the Secretary to Cabinet for Intergovernmental Affairs for Newfoundland and Labrador

 

and by

The Honourable Winston
Baker, Minister of Finance of Newfoundland and Labrador, in the presence of:

____________________
(Sgd.) Myrtle Ingerman

 

 

 

____________________
(Sgd.) Winston Baker,
Minister of Finance of Newfoundland and Labrador

 

SCHEDULE A
(Subclause 4(2))

ENTITIES OF THE PROVINCE ELIGIBLE TO USE TAX
EXEMPTION CERTIFICATES

Agricultural Products Marketing Board
Board of Commissioners of Public Utilities
C.A. Pippy Park Commission
Advisory Council on the Economy
Economic Recovery Commission
Enterprise Newfoundland and Labrador Corporation
Enterprise Network
Farm Development Loan Board
Fisheries Loan Board of Newfoundland
Heritage Foundation of Newfoundland and Labrador
Human Rights Commission
Integrated Education Council
Labour Relations Board
Labour Standards Board
Livestock Owners Compensation Board
Newfoundland and Labrador Arts Council
Newfoundland and Labrador Cancer Treatment and Research Foundation Newfoundland and Labrador Computer Services Limited
Newfoundland and Labrador School Trustees Association
Newfoundland and Labrador Science and Technology Advisory Council Newfoundland and Labrador Youth Advisory Council
Newfoundland Crop Insurance Agency
Newfoundland Government Sinking Fund
Newfoundland Industrial Development Corporation
Newfoundland Legal Aid Commission
Newfoundland Liquor Licensing Board
Newfoundland Medical Care Commission
Newfoundland Municipal Financing Corporation
Pentecostal Education Council
Province of Newfoundland Pooled Pension Fund
Provincial Advisory Council on the Status of Women
Public Accountants Licensing Board
Public Libraries Board
Registrar of the Supreme Court of Newfoundland
Roman Catholic Education Council
School Insurance Committee
Workers Compensation Commission

 

SCHEDULE B
(Clause 5)

Newfoundland and Labrador Housing Corporation.

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