2021 Bill 15

	15


First Session, 50th General Assembly 70 Elizabeth II, 2021
BILL 15
AN ACT TO AMEND THE INCOME TAX ACT, 2000 NO. 2
Received and Read the First Time................................................................
Second Reading............................................................................................
Committee.....................................................................................................
Third Reading...............................................................................................
Royal Assent.................................................................................................
HONOURABLE SIOBHAN COADY Minister of Finance and President of Treasury Board
Ordered to be printed by the Honourable House of Assembly

EXPLANATORY NOTES

This Bill would amend the Income Tax Act, 2000 to

· introduce a physical activity tax credit; and

· amend the dividend tax credit.

A BILL

AN ACT TO AMEND THE INCOME TAX ACT, 2000 NO. 2

Analysis

1. S.17.5 Added
Physical activity tax credit

2. S.20 R&S

Dividend tax credit

3. Commencement

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

SNL2000 cI-1.1
as amended

1. The Income Tax Act, 2000 is amended by adding immediately after section 17.4 the following:

Physical activity tax credit

17.5 (1) In this section

(a) "eligible fitness expense" means the amount of a fee paid to a qualifying entity to the extent that the fee is attributable to the cost of registration of the individual in an eligible program of physical activity or membership in an eligible organization and, for the purposes of this section, that cost includes

(i) the cost to the qualifying entity of the program in respect of its administration, instruction, rental of required facilities and uniforms and equipment, if any, that are not available to be acquired by a participant in the program for an amount less than their fair market value at the time they are acquired,

but does not include

(ii) the cost of accommodation, travel, food or beverages, or

(iii) any amount deductible under section 63 of the federal Act in computing any person's income for any taxation year;

(b) "eligible program of physical activity" means

(i) a program of physical activity in which all or substantially all of the activities include a significant amount of physical activity, or

(ii) a program offered by an organization in circumstances where a participant may select from a variety of activities offered as a part of the program and

(A) at least 50% of those activities include a significant amount of physical activity, or

(B) at least 50% of the time scheduled for those activities offered is for activities that include a significant amount of physical activity;

(c) "membership in an eligible organization" means membership in an organization where a member may select from a variety of activities offered as a part of the membership and

(i) at least 50% of those activities include a significant amount of physical activity, or

(ii) at least 50% of the time scheduled for those activities offered is for activities that include a significant amount of physical activity;

(d) "physical activity" means an activity, other than an activity where an individual rides on or in a motorized vehicle as an essential component of that activity, that contributes to cardio-respiratory endurance and to one or more of the following:

(i) muscular strength,

(ii) muscular endurance,

(iii) flexibility, and

(iv) balance;

(e) "qualifying entity" means a person or partnership that offers one or more programs of physical activity; and

(f) "return of income" means in respect of an individual who is resident in the province at the end of the taxation year, the individual's return of income, other than a return of income under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4) of the federal Act, that is required to be filed for the taxation year or that would be required to be filed if the individual had tax payable under that Act for the taxation year.

(2) An individual who

(a) is resident in the province at the end of the taxation year;

(b) files a return of income for a taxation year; and

is considered to have paid, at the end of the year, on account of tax payable under this section for the year, an amount equal to the amount determined by the formula

A x B

where

A is the appropriate percentage for the year;

B is the total of all amounts each of which is, in respect of an individual for the year, the lesser of $2,000 and the amount determined by the formula

C - D

where

C is the total of all amounts each of which is an amount paid in the taxation year by the individual or by the individual's spouse or common-law partner, that is an eligible fitness expense in respect of

(i) the individual or the individual's spouse or common-law partner, or

(ii) a child of the individual or child of the individual's spouse or common-law partner, if the child was less than 18 years of age at the end of the taxation year; and

D is the total of all amounts that any individual is or was entitled to receive, each of which relates to an amount included in computing the value of C in respect of the individual that is the amount of a reimbursement, allowance or any other form of assistance, other than an amount that is included in computing the income for any taxation year of that individual and that is not deductible in computing the taxable income of that individual.

(3) Where more than one individual is entitled to make a claim under this section for a taxation year for an amount paid in the taxation year by the individual or by the individual's spouse or common-law partner in respect of

(a) the individual or the individual's spouse or common law partner; or

(b) a child of the individual or child of the individual's spouse or common-law partner, if the child was less than 18 years of age at the end of the taxation year,

the total of all amounts considered to have been paid shall not exceed the maximum amount that could be considered to have been paid for the year by any one of those individuals if that individual were the only individual entitled to claim an amount for the year under this section.

(4) Where the individuals referred to in subsection (3) cannot agree as to what portion of the maximum amount each can claim, the minister may fix the portions.

(5) An individual who becomes bankrupt in a calendar year is entitled to claim, for each taxation year that ends in the calendar year, only the amounts that the individual is entitled to claim for the taxation year, except that the sum of all amounts that may be claimed under this section for all taxation years of the individual ending in the calendar year shall not exceed the total amount that the individual would have been entitled to claim in respect of the calendar year if the individual had not become bankrupt.

(6) An individual who is resident in Canada for only part of a taxation year is entitled to claim for the year only the amount the individual would be entitled to claim for the year under this section that can reasonably be considered wholly applicable to any period in the year throughout which the individual was resident in Canada, computed as though that period were the whole taxation year, except that the amount that may be claimed under this section shall not exceed the amount that the individual would have been entitled to claim under this section if the individual had been resident in Canada throughout the year.

(7) For the purposes of paragraph (1)(a), an amount paid to an individual who is, at the time the amount is paid, the individual’s parent, spouse or common-law partner or an individual who is under 18 years of age is not considered an eligible fitness expense.

(8) For the purposes of paragraph (1)(d), horseback riding is considered to be an activity that contributes to cardio-respiratory endurance and to one or more of muscular strength, muscular endurance, flexibility and balance.

2. Section 20 of the Act is repealed and the following substituted:

Dividend tax credit

20. For the purpose of computing the tax payable under this Part for a taxation year by an individual who was resident in the province on the last day of the taxation year, there may be deducted an amount equal to the total of

(a) 3.2% of the total of the amount required under paragraph 82(1)(a) and subparagraph 82(1)(b)(i) of the federal Act to be included in computing the individual's income for the year; and

(b) 6.3% of the total of the amount required under paragraph 82(1)(a.1) and subparagraph 82(1)(b)(ii) of the federal Act to be included in computing the individual's income for the year.

Commencement

3. (1) Section 1 is considered to have come into force on January 1, 2021.

(2) Section 2 comes into force on January 1, 2022.