HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Part 1 — Non-Tax Budget Measures

Balanced Budget and Ministerial Accountability Act

1 Section 1 (1) of the Balanced Budget and Ministerial Accountability Act, S.B.C. 2001, c. 28, is amended by adding the following definition:

"revenue minister" means the member of the Executive Council who is charged by order of the Lieutenant Governor in Council with the administration of the Income Tax Act.

2 Section 5 is amended

(a) in subsection (1) by striking out ", other than operating expenses referred to in subsection (2)" and by adding "subsection (2) and" after "subject to", and

(b) by repealing subsection (2) and substituting the following:

(2) Half of the 20% reduction in salary under section 3, for any period in a fiscal year when a member of the Executive Council was the revenue minister, becomes due and payable to that member on the next day after the public accounts for that fiscal year are made public, if

(a) the actual revenue from sources specified by regulation of Treasury Board is not less than an amount specified by regulation of Treasury Board, and

(b) any other conditions under this section applicable to that member during the period are satisfied for the fiscal year.

Budget Transparency and Accountability Act

3 Section 4.1 (9) of the Budget Transparency and Accountability Act, S.B.C. 2000, c. 23, is repealed and the following substituted:

(9) This section may be repealed by regulation of the Lieutenant Governor in Council.

Financial Administration Act

4 Section 56.1 of the Financial Administration Act, R.S.B.C. 1996, c. 138, is amended

(a) in subsection (2) by striking out "prepaid capital advance" and substituting "grant", and

(b) by repealing subsection (3).

5 Section 56.1 is repealed and the following substituted:

Grant for capital expenditures

56.1  The Minister of Finance may make from the consolidated revenue fund a grant to a government organization, as defined in the Budget Transparency and Accountability Act, for its capital expenditures.

Hospital District Act

6 Section 32 (2) (c) of the Hospital District Act, R.S.B.C. 1996, c. 202, is amended by striking out "by a prepaid capital advance under section 56.1 of the Financial Administration Act or".

Land Act

7 Section 109.1 of the Land Act, R.S.B.C. 1996, c. 245, is amended

(a) by renumbering the section as section 109.1 (1), and

(b) by adding the following subsection:

(2) The government is exempt from paying any fees payable under subsection (1).

Land Tax Deferment Act

8 Section 15 (1) of the Land Tax Deferment Act, R.S.B.C. 1996, c. 249, is amended by adding "from the consolidated revenue fund to" after "pay".

Land Title Act

9 Section 386 of the Land Title Act, R.S.B.C. 1996, c. 250, is amended by adding the following subsection:

(7.1) The government is exempt from paying any fees payable under this section.

10 Section 386.2 is amended by adding "sections 386 (7.1) and 386.1 (3) and" after "but subject to".

Special Accounts Appropriation and Control Act

11 Section 9 of the Special Accounts Appropriation and Control Act, R.S.B.C. 1996, c. 436, is amended

(a) in subsection (4) by adding the following paragraph:

(c) money accepted by the minister under subsection (6) and money from the disposition of securities or other property accepted by the minister under that subsection. , and

(b) by adding the following subsections:

(6) The minister, on behalf of the government, may accept money, securities or other prescribed property as contributions to the BC150 Cultural Fund.

(7) The minister may dispose of securities or other property accepted under subsection (6).

12 Section 9.4 (4) is repealed and the following substituted:

(4) Despite section 21 (3) of the Financial Administration Act, the minister responsible for the administration of this section may pay amounts out of the special account

(a) for the purpose of providing financial assistance in accordance with the regulations to students born on or after January 1, 2007 who are

(i) eligible in accordance with the regulations, and

(ii) enrolled in education programs that are eligible in accordance with the regulations, and

(b) to cover any investment losses of the special account.

13 Section 10 (2) is amended by adding the following paragraph:

(c) prescribing property for the purpose of section 9 (6) [contributions to BC150 Cultural Fund].

Non-Tax Budget Measures — Transitional and Other Provisions

Increase in balance of BC Timber Sales Account

14  The balance of the BC Timber Sales Account special account is increased by $300 million.

Transition — Balanced Budget and Ministerial Accountability Act

15  For the purposes of the 2008-2009 fiscal year, operating expenses referred to in section 5 of the Balanced Budget and Ministerial Accountability Act do not include

(a) operating expenses of the Ministry of Small Business and Revenue incurred prior to January 19, 2009, or

(b) operating expenses charged against the unexpended balance of the appropriation for the Ministry of Small Business and Revenue transferred to a member of the Executive Council by Order in Council 17/2009, 28/2009 or 45/2009.

Transition — section 56.1 of the Financial Administration Act

16  (1) All prepaid capital advances made out of the consolidated revenue fund under section 56.1 of the Financial Administration Act to an institution for its capital expenditures are conclusively deemed to have been grants validly made out of the consolidated revenue fund under that section to an institution for its capital expenditures.

(2) This section is retroactive to the extent necessary to give full force and effect to its provisions and must not be construed as lacking retroactive effect in relation to any matter by reason that it makes no specific reference to that matter.

Part 2 — Tax-Related Budget Measures

Corporation Capital Tax Act

17 Section 7 (1) of the Corporation Capital Tax Act, R.S.B.C. 1996, c. 73, is amended by striking out "and" at the end of paragraph (b), by adding ", and" at the end of paragraph (c) and by adding the following paragraph:

(e) accumulated other comprehensive income.

Income Tax Act

18 Section 4.69 (a) of the Income Tax Act, R.S.B.C. 1996, c. 215, is amended by striking out "21%" and substituting "17%".

19 Section 4.721 is amended

(a) in subsection (1) in paragraph (d) of the definition of "BC flow-through mining expenditure" by striking out "2009" and substituting "2010", and

(b) in subsection (1.1) by striking out "2009" in both places and substituting "2010".

20 Section 8 is amended in the definition of "adjusted income" by striking out "and" at the end of paragraph (b) and by adding the following paragraphs:

(b.1) were included under section 56 (1) (q.1) [registered disability savings plan payments] of the federal Act,

(b.2) were deductible under section 60 (z) [repayment under the Canada Disability Savings Act] of the federal Act, and .

21 Sections 14 (2) and (3.1) (a), 16 (1) (b) and (2) (b) and 25 (2) are amended by striking out "11%" and substituting "10.5%".

22 Sections 14 (2) and (3.1) (a), 16 (1) (b) and (2) (b) and 25 (2) are amended by striking out "10.5%" and substituting "10%".

23 Section 25.1 (1) is amended in paragraph (f.2) of the definition of "excluded expense"

(a) in subparagraph (i) by striking out "January 1, 2009" and substituting "January 1, 2010", and

(b) in subparagraph (ii) by striking out "after December 31, 2008 and before January 1, 2010" and substituting "after December 31, 2009 and before January 1, 2011".

24 Section 34 is amended by adding "160.21," after "160.2,".

25 Section 80 is amended

(a) in subsection (1) (a) by adding "and" at the end of subparagraph (i), by striking out "and" at the end of subparagraph (ii) and by repealing subparagraph (iii),

(b) in subsection (5) (a) by striking out "and before April 1, 2013", and

(c) by repealing subsection (7) and substituting the following:

(7) For the purpose of determining the amount of the tax credit under subsection (6), the references to "March 31, 1998" in the definition of "BC labour expenditure" in section 79 (1) must be read as "December 31, 2007".

26 Section 80 (1) is amended

(a) in paragraph (c) by adding "for a production for which principal photography begins before January 1, 2009," before "the corporation is",

(b) by adding the following paragraph:

(c.1) for a production for which principal photography begins on or after January 1, 2009, the corporation is, throughout the taxation year in respect of which the tax credit is being claimed, an eligible production corporation, ,

(c) by repealing paragraph (f) (i) (A) and substituting the following:

(A) in the case of a production for which principal photography begins before January 1, 2009, a BC-controlled eligible production corporation related to the corporation, or in the case of a production for which principal photography begins on or after January 1, 2009, an eligible production corporation related to the corporation, and ,

(d) in paragraph (h) by striking out "treaty co-production," and substituting "treaty co-production and for which principal photography begins before January 1, 2009,",

(e) by adding the following paragraph:

(h.1) for a production that is an interprovincial co-production or a treaty
co-production and for which principal photography begins on or after January 1, 2009, the corporation, or an eligible production corporation that is related to the corporation, retains a share, acceptable to the certifying authority, of revenues from the exploitation of the production in non-Canadian markets, ,

(f) in paragraph (i) by striking out "interprovincial co-production," and substituting "interprovincial co-production and for which principal photography begins before January 1, 2009," , and

(g) by adding the following paragraph:

(i.1) for a production that is an interprovincial co-production and for which principal photography begins on or after January 1, 2009, more than 20% of the copyright in the production is owned by the corporation or by an eligible production corporation that is related to the corporation, .

27 Section 82.1 is amended

(a) in subsection (1) (a) by adding "and" at the end of subparagraph (i), by striking out "and" at the end of subparagraph (ii) and by repealing subparagraph (iii),

(b) in subsection (6) (a) by striking out "and before June 1, 2013", and

(c) by repealing subsection (8) and substituting the following:

(8) For the purpose of determining the amount of the tax credit under subsection (7), despite paragraph (a) in the definition of "accredited BC labour expenditure" in section 79 (1), the references to "March 31, 1998" in the definition of "BC labour expenditure" in section 79 (1) must be read as "December 31, 2007".

International Financial Activity Act

28 Section 1 of the International Financial Activity Act, S.B.C. 2004, c. 49, is amended by adding the following definition:

"permanent establishment" has the same meaning as in section 400 (2) of the Income Tax Regulations (Canada); .

29 Section 2 (1) is amended by repealing the definition of "non-resident person" and substituting the following:

"non-resident person" does not include

(a) a partnership unless all of the partners of the partnership are non-resident persons, or

(b) a person who carries on a business through a permanent establishment in Canada, but only in respect of that business.

30 Section 9 (1) (b) is repealed and the following substituted:

(b) the corporation must have a permanent establishment in British Columbia; .

31 Section 10 (2) (a) is amended by adding "or within a later period approved by the commissioner" after "within 90 days of the date of amalgamation".

Motor Fuel Tax Act

32 Section 1 of the Motor Fuel Tax Act, R.S.B.C. 1996, c. 317, is amended by repealing the definition of "fuel" and substituting the following:

"fuel" means

(a) any gas or liquid for use for generating power by means of an internal combustion engine, or

(b) hydrogen for use in a fuel cell vehicle; .

Social Service Tax Act

33 Section 1 of the Social Service Tax Act, R.S.B.C. 1996, c. 431, is amended by renumbering the section as section 1 (1) and by adding the following subsections:

(2) For the purposes of this Act, a person who, for the use or consumption of another person, acquires at a sale, leases as lessee, utilizes, brings or sends into British Columbia, or receives delivery of in British Columbia, tangible personal property

(a) is deemed to have done so at the first person's expense, or

(b) if the first person acts on behalf of or as an agent for a principal, is deemed to have done so at the expense of the principal,

unless the other person acquires the tangible personal property at a sale or is given the right to use the tangible personal property under a lease.

(3) For the purposes of this Act, a person who, for the benefit or use of another person, agrees to pay or is otherwise obliged to pay consideration for a service or right referred to in subsection (4)

(a) is deemed to have done so at the first person's expense, or

(b) if the first person acts on behalf of or as an agent for a principal, is deemed to have done so at the expense of the principal,

unless the other person agrees to pay or is otherwise obliged to pay consideration for the service or right.

(4) Subsection (3) applies with respect to the following services and rights:

(a) legal services;

(b) parking rights;

(c) taxable services;

(d) telecommunication services.

34 Section 71 (b) is repealed and the following substituted:

(b) medicaments, when

(i) sold on the prescription of a practitioner as defined under the Pharmacists, Pharmacy Operations and Drug Scheduling Act, or

(ii) provided as part of a promotional distribution by a pharmaceutical company to a practitioner as defined under the Pharmacists, Pharmacy Operations and Drug Scheduling Act;

(b.1) drugs specified in Schedule I or IA of the Drug Schedules Regulation, B.C. Reg. 9/98;

(b.2) vaccines specified in Schedule II of the Drug Schedules Regulation or Schedule A of the Veterinary Drug and Medicated Feed Regulation, B.C. Reg. 47/82; .

35 Section 138 is amended

(a) in subsection (1) (q) (vi) by striking out "parts" wherever it appears and substituting "parts or materials",

(b) by repealing subsection (3), and

(c) by adding the following subsection:

(5) If made before December 31, 2009, regulations made under subsection (1) (q) may be made retroactive to a date on or after February 22, 2006, and if made retroactive are deemed to have come into force on the date specified in the regulation.

Tobacco Tax Act

36 Section 2 (2) and (3) of the Tobacco Tax Act, R.S.B.C. 1996, c. 452, is amended by striking out "17.9" and substituting "18.5".

Tax-Related Budget Measures — Transitional and Other Provisions

Application — Social Service Tax Act

37  Subject to section 80 of the Social Service Tax Act, no refund is payable under that Act of taxes paid on or after July 31, 2001 and before February 22, 2006, and no exemption may be claimed for that period, for or in respect of machinery or equipment, purchased or leased by a manufacturer, as defined in section 13.1 of the Social Service Tax Act Regulations, B.C. Reg. 84/58, used in the generation of heat, unless the following conditions are met:

(a) the heat was generated as one step in

(i) fabricating or manufacturing tangible personal property to create a new product that is substantially different from the material or property from which it was made,

(ii) processing tangible personal property by performing a series of operations or a complex operation that results in a substantial change in the form or other physical or chemical characteristics of the tangible personal property, or

(iii) extracting or processing minerals, petroleum or natural gas;

(b) the activity described in paragraph (a) (i), (ii) or (iii) took place at one of the following locations:

(i) a manufacturing site as described in section 13.2 (2) of the Social Service Tax Act Regulations, B.C. Reg. 84/58,

(ii) a mine site as described in section 13.2 (3) of the Social Service Tax Act Regulations, or

(iii) a well site, processing plant or refinery as described in section 13.2 (4) of the Social Service Tax Act Regulations.

Transition — Corporation Capital Tax Act

38  Section 7 (1) (e) of the Corporation Capital Tax Act, as enacted by this Act, applies to taxation years beginning on or after October 1, 2006.

Transition — Motor Fuel Tax Act

39  If made before December 31, 2009, regulations made under section 71 (2) (i), (o.1) and (o.2) of the Motor Fuel Tax Act may be made retroactive to a date on or after February 18, 2009, and if made retroactive are deemed to have come into force on the date specified.

Commencement

40  The provisions of this Act referred to in column 1 of the following table come into force as set out in column 2 of the table: