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Bill C-70

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    (b) by a board of trade, chamber of commerce, municipal or automobile association or similar organization to which it was supplied for no consideration, other than shipping and handling charges.

13. Property that is brought into a participating province by a charity or a public institution and that has been donated to the charity or the institution.

14. Property that is brought into a participating province by a person where it is supplied to the person for no consideration, other than shipping and handling charges, as a replacement part under a warranty in respect of tangible personal property.

15. Property that is brought into a participating province, the supply of which is included in any of Parts I to IV and VIII of Schedule VI.

16. Containers that are brought into a participating province where, because of regulations made under Note 11(c) to Chapter 98 of Schedule I to the Customs Tariff, they would, if they were imported, be imported free of customs duties under that Act.

17. Money or certificates or other documents evidencing a right that is a financial instrument.

18. Property that is brought into a participating province by a person after having been supplied to the person by another person in circumstances in which tax was payable in respect of the property by the person under subsection 165(2) or section 218.1 of the Act.

19. Property that a person brings at any time into a participating province and that at that time is being supplied in a non-participating province to the person by way of lease, licence or similar arrangement under which continuous possession or use of the property is provided for a period of more than three months and in circumstances in which tax under subsection 165(1) is payable by the person in respect of that supply.

20. Property that is brought into a participating province by a person after having been imported by the person in circumstances in which

    (a) tax was not payable under section 212 of the Act in respect of the property because of section 213 of the Act; or

    (b) tax was payable under section 212.1 of the Act and the person was not entitled to a rebate of that tax under section 261.2 of the Act.

21. Property that is brought into a participating province by a person after having been used in, and removed from, a participating province by the person and in respect of which the person was not entitled to claim a rebate under section 261.1.

22. Property, other than a returnable container (within the meaning assigned by subsection 226(1)) or a specified motor vehicle, that is brought into a participating province by a registrant (other than a registrant whose net tax is determined under section 225.1 of the Act or under Part IV or V of the Streamlined Accounting (GST) Regulations) for consumption, use or supply exclusively in the course of commercial activities of the registrant.

23. Prescribed property brought into a participating province in prescribed circumstances, subject to such terms and conditions as may be prescribed.

24. A specified motor vehicle that is brought into a participating province by a person after having been supplied to the person by way of sale in a non-participating province in circumstances in which tax was not payable under subsection 165(1) of the Act in respect of the supply.

25. A mobile home or a floating home that has been used or occupied in Canada as a place of residence for individuals.

26. Property referred to in subsection 178.3(1) or 178.4(1) of the Act where it is brought into a participating province by an independent sales contractor (within the meaning of section 178.1 of the Act) who is not a distributor in respect of whom an approval granted under subsection 178.2(4) on application made jointly with a direct seller is in effect.

PART II

NON-TAXABLE PROPERTY AND SERVICES FOR PURPOSES OF SUBDIVISION B

(Subsection 220.08(3))

1. A supply of property or a service to a registrant (other than a registrant whose net tax is determined under section 225.1 of the Act or under Part IV or V of the Streamlined Accounting (GST) Regulations) who is acquiring the property or service for consumption, use or supply exclusively in the course of commercial activities of the registrant.

2. A zero-rated supply.

3. A supply of a service (other than a custodial or nominee service in respect of securities or precious metals of the person) in respect of tangible personal property that is removed from the participating provinces as soon after the service is performed as is reasonable having regard to the circumstances surrounding the removal and is not consumed, used or supplied in the participating provinces after the service is performed and before the removal of the property.

4. A supply of a service rendered in connection with criminal, civil or administrative litigation outside the participating provinces, other than a service rendered before the commencement of such litigation.

5. A supply of a transportation service.

6. A supply of a telecommunication service.

7. A prescribed supply of property or a service where the property or service is acquired by the recipient of the supply in prescribed circumstances, subject to such terms and conditions as may be prescribed.

255. (1) The Act is amended in the manner and to the extent set out in the schedule.

(2) Subsection (1) comes into force on April 1, 1997.

PART III

TRANSITIONAL PROVISIONS

Deregistra-
tion of public service body

256. Where, under subsection 242(2) of the Excise Tax Act, the Minister of National Revenue receives a request from a public service body to cancel the registration of the body at any time in the two-year period commencing on April 23, 1996 and that registration was not one which had become effective in that period and for which an application under subsection 240(3) of that Act had been made by the body, paragraph 242(2)(b) of that Act does not apply in respect of the request and where the registration is cancelled at that time,

    (a) subsection 171(3) of that Act does not apply to deem the body to have, at or immediately before that time, made or received supplies of property of the body that was held by the body immediately before that time, to have collected tax or to have, immediately before that time, ceased to use such property in commercial activities;

    (b) paragraph 171(4)(b) of that Act does not apply for the purpose of determining the net tax of the body for the last reporting period of the body beginning before that time; and

    (c) in determining the input tax credits of the body for the first reporting period of the body ending after the body next becomes a registrant,

      (i) subsection 171(1) of that Act does not apply to any property referred to in paragraph (a), and

      (ii) paragraph 171(2)(a) of that Act does not apply to any tax that was included in determining an input tax credit of the body for a reporting period of the body ending before that first reporting period.

Small supplier divisions of a public service body

257. Where at any time in the two-year period commencing on April 23, 1996 a branch or division of a public service body that is a registrant becomes a small supplier division within the meaning of subsection 129(1) of the Excise Tax Act,

    (a) subsection 129(6) of that Act does not apply to deem the body to have, immediately before that time, made a supply of any property that was held by the body immediately before that time for consumption, use or supply in the course of activities engaged in by the body through the branch or division or to have collected tax in respect of the property;

    (b) any consumption, use or supply of the property in the course of activities engaged in by the body through the branch or division during the period beginning at that time and ending at the time the branch or division ceases to be a small supplier division is deemed, for the purposes of subsections 129.1(4) to (6) of that Act, not to be in the course of activities engaged in through a small supplier division; and

    (c) paragraph 129(7)(e) of that Act does not apply for the purpose of determining the net tax of the body for its reporting period that includes that time.

Charities and change in use caused by enactment

258. Where, because of the enactment of a provision of this Act amending the Excise Tax Act, a charity (within the meaning assigned by subsection 123(1) of that Act, as amended by subsection 1(1)), is deemed under subsection 200(2), 203(2) or 206(4) or (5) of that Act to have made a supply of property and to have collected, at any time, tax in respect of the supply, for the purpose of determining the amount of tax that is deemed under that subsection to have been collected or paid at that time, the amount of tax calculated on the fair market value of the property at that time is deemed to be equal to zero.

Application of subsection 334(1) of the Excise Tax Act

259. Subsection 334(1) of the Excise Tax Act does not apply for the purposes of subsections 1(15) to (17) and (19) to (21), 23(5), 24(2), 33(12), 59(13), 60(4), 62(4), 64(6) and (8), 69(11), 76(2), 86(2), 88(3), 89(2), 116(5) and (6) and 145(2).

Application to imported goods

260. Where a provision of the Excise Tax Act, as enacted or amended by this Act, applies to goods imported on or after a particular day, that provision also applies to goods imported before that day that were not accounted for under section 32 of the Customs Act before that day.

PART IV

R.S., c. F-8, R.S., cc. 22, 39, 44 (1st Supp.); cc. 7, 15, 26, 28 (2nd Supp.); cc. 9, 11, 31 (3rd Supp.); cc. 7, 33, 35, 46 (4th Supp.); 1990, c. 39; SOR/91-40; 1991, cc. 9, 10, 38, 51; 1992, cc. 1, 10; 1993, cc. 28, 34; 1994, c. 2; 1995, cc. 17, 24, 28, 29; 1996, c. 8, 11, 18

FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS ACT

261. Subsection 2(1) of the Federal-Provincial Fiscal Arrangements Act is amended by adding the following in alphabetical order:

``sales tax harmoniza-
tion agreement''
« accord d'harmoni-
sation de la taxe de
vente »

``sales tax harmonization agreement'' means an agreement or arrangement entered into by the Minister on behalf of the Government of Canada and authorized, or ratified and confirmed, under Part III.1 including any amendments or variations to the agreement or arrangement that are authorized, or ratified and confirmed, under that Part;

262. The Act is amended by adding the following after section 8.1:

PART III.1

SALES TAX HARMONIZATION AGREEMENTS

Definition of ``sales taxes''

8.2 (1) In this Part, ``sales taxes'' means the taxes imposed under Part IX of the Excise Tax Act and taxes levied under Acts of the legislature of a province in respect of supplies of property or services.

Meanings in Part IX to apply

(2) In this Part, ``property'', ``service'' and ``supply'' have the meanings assigned by subsection 123(1) of the Excise Tax Act.

Sales tax harmoniza-
tion agreement

8.3 (1) The Minister, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into an agreement or arrangement with the government of a province respecting sales taxes and, without restricting the generality of the foregoing, respecting

    (a) the integration of sales taxes applicable in the province into taxes collected, administered and enforced under a single Act of Parliament;

    (b) the collection of taxes applicable in the province, whether imposed under an Act of Parliament or levied under an Act of the legislature of the province, and the administration and enforcement of the Acts imposing the taxes;

    (c) the provision to the Government of Canada by the government of the province, or to the government of the province by the Government of Canada, of information acquired in the administration and enforcement of Acts imposing taxes, Acts relating to the disclosure, displaying or advertisement of prices for property or services and Acts providing for rebates, refunds or reimbursements of sales taxes, paid or payable, or of amounts paid or payable as or on account of sales taxes, in respect of the supply, bringing into the province or importation of certain property or services;

    (d) the accounting for taxes collected in accordance with the agreement;

    (e) the implementation of the system of integration of the sales taxes contemplated under the agreement and the transition from the system of taxation administered before the agreement to the system of taxation contemplated under the agreement;

    (f) payments, and the eligibility for payments, by the Government of Canada to the government of the province in respect of the revenues from, and the transitional costs incurred in converting to, the system of taxation contemplated under the agreement and to which the province is entitled under the agreement, the time when such payments will be made, and the remittance by the government of the province to the Government of Canada of any overpayments by the Government of Canada or the right of the Government of Canada to set off any overpayments against other amounts payable by the Government of Canada to the government of the province, whether under the agreement or any other agreement or arrangement or any Act of Parliament;

    (g) the payment by the Government of Canada and its agents and subservient bodies, and by the government of the province and its agents and subservient bodies, of the sales taxes payable under the system of taxation contemplated under the agreement and the accounting for the sales taxes so paid;

    (h) the compliance by the Government of Canada and its agents and subservient bodies, and by the government of the province and its agents and subservient bodies, with the Act of Parliament under which the system of taxation is administered and regulations made under that Act;

    (i) the enactment, administration and enforcement of laws respecting the disclosure, display and advertisement of the prices for property and services in respect of the supply of which sales taxes are payable under the system of taxation contemplated under the agreement;

    (j) the administration and enforcement of Acts of Parliament or the legislature of the province respecting the rebate, refund or reimbursement of sales taxes paid in respect of the supply, bringing into the province or importation of certain property or services; and

    (k) other matters that relate to, and that are considered advisable for the purposes of implementing or administering, the system of taxation contemplated under the agreement.

Amending agreements

(2) The Minister, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into an agreement with the government of a province amending or varying an agreement or arrangement with the province entered into under subsection (1) or this subsection or ratified and confirmed under section 8.7.

Payments to province

8.4 Where the Government of Canada has entered into a sales tax harmonization agreement with the government of a province, the federal Minister who, pursuant to the agreement, is responsible for the administration and enforcement of the system of taxation contemplated under the agreement may pay to a province out of the Consolidated Revenue Fund

    (a) amounts determined in accordance with the agreement as provided, and at such times as are specified, in the agreement; and

    (b) subject to the regulations, advances in respect of the amounts referred to in paragraph (a).

Payments to other persons

8.5 (1) Subject to subsection (2), where, under a sales tax harmonization agreement, a federal Minister is responsible for the administration and enforcement of an Act of the legislature of a province respecting the refund, rebate or reimbursement to persons of sales taxes paid or payable by the persons, or of amounts paid or payable as or on account of sales taxes, in respect of the supply, bringing into the province or importation of certain property or services, that Minister may pay out of the Consolidated Revenue Fund to a person an amount on account of any amount that is payable to the person under that Act in accordance with the agreement.

Advances from Consolidated Revenue Fund

(2) Where no amount is held on behalf of a province from which payment under subsection (1) may be made in accordance with a sales tax harmonization agreement with the province, or the amount of the payment exceeds the amount so held, payment under subsection (1) may be made as a recoverable advance from the Consolidated Revenue Fund if the repayment of the amount or excess by the government of the province is provided for in the sales tax harmonization agreement.

Statutory authority to make payments

8.6. Notwithstanding any other Act, the payments paid under a sales tax harmonization agreement under the authority of section 8.4 or 8.5 may be made without any other or further appropriation or authority.

Confirmation of past agreements, etc.

8.7 Agreements and arrangements that were entered into by the Minister after March 29, 1996, and that, if section 8.3 had been in force on and after that day, could have been authorized under that section, are, for greater certainty, ratified and confirmed and are deemed to have been entered into under that section and approved by the Governor in Council, and all actions taken and payments made under those agreements and arrangements after that day and before this Act is assented to are ratified and confirmed.

263. Section 32 of the Act is amended by adding the following after paragraph (b):

    (c) for the payment by Her Majesty in right of Canada to that province or the assignees of that province of amounts determined under the agreement in respect of amounts paid by Her Majesty in right of that province and amounts paid by persons identified in the agreement as or on account of any tax imposed under the Excise Tax Act;

1992, c. 10, s. 7(1)

264. (1) Paragraph 40(b) of the Act is replaced by the following:

    (b) providing for the payment to a province of advances on account of any amount that may become payable to the province under this Act, an administration agreement, a reciprocal taxation agreement or a sales tax harmonization agreement, the adjustment, by way of reduction or set off, of other payments to the province because of those advances and the recovery of overpayments;

1992, c. 10, s. 7(2)

(2) Paragraphs 40(d) and (e) of the Act are replaced by the following:

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