1994 Legislative Session: 3rd Session, 35th Parliament
FIRST READING


The following electronic version is for informational purposes only.
The printed version remains the official version.


HONOURABLE ELIZABETH CULL
MINISTER OF FINANCE AND
CORPORATE RELATIONS

BILL 44 1994

FINANCE AND CORPORATE RELATIONS STATUTES AMENDMENT ACT, 1994

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

 
Company Act

1 Section 326 (2) of the Company Act, R.S.B.C. 1979, c. 59, is amended by striking out "subsection (7)" and substituting "subsection (1)".

 
Cooperative Association Act

2 The Cooperative Association Act, R.S.B.C. 1979, c. 66, is amended by adding the following section:

Document imaging

55.4 The superintendent may have a document that is filed with the superintendent photocopied or otherwise reproduced, and the reproduction is, for all purposes, deemed to be the document photocopied or reproduced.

 
Financial Administration Act

3 Section 1 of the Financial Administration Act, S.B.C. 1981, c. 15, is amended

(a) by adding the following definition:

"chief investment officer" means the person appointed as the chief investment officer under the Public Service Act; , and

(b) by repealing the definition of "pension fund" and substituting the following:

"pension fund" means

(a) a pension fund established under the Legislative Assembly Allowances and Pension Act, Pension (College) Act, Pension (Municipal) Act, Pension (Public Service) Act, or Pension (Teachers) Act,

(b) any pension fund held in trust by the government or a public officer, and

(c) any prescribed pension fund that has been established for the benefit of employees of a government body; .

4 Section 36 is amended

(a) by repealing subsections (4) to (7) and substituting the following:

(4) Subject to subsection (6) and excepting money of the general fund, if the Minister of Finance has the authority to invest the money of a trust fund, special fund or other fund, other public money or the money of a government body or designated institution, the minister may invest or loan the money and in doing so shall exercise the care, diligence and skill that a person of ordinary prudence would exercise in dealing with the property of another person.

(5) Money of a trust fund must not be invested or loaned under subsection (4) unless the trust fund is specified by regulation under subsection (6).

(6) The Lieutenant Governor in Council may, on recommendation by the trustees of a trust fund, by regulation, specify the trust fund as one to which subsection (4) applies. , and

(b) in subsection (9) by striking out "and" at the end of paragraph (a) (ii), by adding ", and" at the end of paragraph (b) (ii) and by adding the following:

(c) where these sections or any other enactment gives the authority to make an investment, the authority shall be deemed to include the power to invest in securities that are obligations of or guaranteed by the government.

5 The following sections are added:

Functions of the chief investment officer

36.01 (1) The functions of the chief investment officer are to perform and exercise the following:

(a) investment powers, duties and functions of the Minister of Finance designated by the Lieutenant Governor in Council in respect of trust funds, funds of government bodies and funds of designated institutions;

(b) powers, duties and functions of the Minister of Finance that are delegated by the minister in respect of funds other than those funds referred to in paragraph (a).

(2) If a power, duty or function is designated under subsection (1), the power, duty or function may no longer be exercised or performed by the Minister of Finance.

Delegation by chief investment officer

36.02 The chief investment officer may delegate to persons employed or retained by the government, any powers, duties or functions given to the chief investment officer under this Part.

6 Section 36.1 is amended by adding the following subsection:

(3.1) The costs and expenses incurred by the Minister of Finance under section 36.2 (5) in operating or administering a pooled investment portfolio may be paid directly from the portfolio.

7 Section 36.2 is amended by adding the following subsection:

(12) Except with respect to powers, duties and functions designated under section 36.01 (1) (a), any delegation or direction issued by the Minister of Finance with respect to an investment or loan must be in writing, and in the case of a delegation or direction relating to an investment or loan of a trust fund, a copy of the delegation or direction must be provided to the trustees of that trust fund.

8 Section 68 is renumbered as section 68 (1) and the following subsection is added:

(2) Without limiting subsection (1), the Lieutenant Governor in Council may make regulations prescribing pension funds for the purpose of the definition of "pension fund" in section 1.

 
Hotel Room Tax Act

9 Section 11 (1) of the Hotel Room Tax Act, R.S.B.C. 1979, c. 183, is amended by striking out "or" at the end of paragraph (a.1), by adding "or" at the end of paragraph (b) and by adding the following:

(c) a determination of the director under section 16.1 (11), .

10 Section 16.1 is amended

(a) in subsection (1) by repealing the definition of "associated corporation" and substituting the following:

"associated corporation" means a corporation that

(a) is associated with another corporation within the meaning of section 256 of the Income Tax Act (Canada), or

(b) is determined under subsection (11) to be associated with another corporation for the purposes of this section; , and

(b) by adding the following subsections:

(10) Where the director believes that one corporation is associated with another corporation within the meaning of section 256 of the Income Tax Act (Canada), the director may request one or both of the corporations to provide to the director the records and information required by the director to confirm or rebut that belief.

(11) The director may determine that the corporations are associated corporations for the purposes of this section where

(a) a corporation that has been requested to provide records or information to the director under subsection (10) fails or refuses to comply with that request within a period of time considered by the director to be reasonable in the circumstances, or

(b) the records or information provided to the director under this section confirm the director's belief that the corporations are associated.

(12) Immediately after a corporation is determined under this section to be associated with a person referred to in subsection (2) (a) (i) and (b) (i), the director

(a) must so notify the corporation in writing, and

(b) may register a lien under this section against the real and personal property of the corporation.

(13) The director may seize personal property against which a lien is registered under subsection (12) at any time after the registration of the lien but must not take any action to realize on those assets until the later of

(a) the date that is 90 days after the date on which the notice required under subsection (12) (a) was sent to the corporation, and

(b) if a notice of appeal is served on the minister in respect of the determination within the time provided by section 11 (1), the date on which the minister upholds the determination under that appeal.

(14) If, at any time, the director becomes convinced that the corporations were not associated within the meaning of section 256 of the Income Tax Act (Canada) at the time that the lien was registered under subsection (12) (b) or the minister or a court of competent jurisdiction upholds the corporation's appeal against the director's determination on the basis that the corporations were not associated at the time that the lien was registered, the director shall,

(a) if the director has not realized on any of the assets against which the lien was registered, promptly release the lien, and

(b) if the director has realized on some or all of the assets against which the lien was registered, promptly release the lien against the remaining assets and pay the proceeds realized from the sale of the realized assets minus any costs or expenses incurred in the sale

(i) to the corporation, or

(ii) where the director considers it appropriate to do so, into the Supreme Court under Rule 48 of the Rules of Court.

(15) The release of the lien under subsection (14) (a) or the release of the lien and payment of the applicable net sale proceeds under subsection (14) (b) shall be deemed to be full satisfaction of all claims any person, including the corporation, might have arising out of or in any way connected with the determination made under subsection (11), the registration of the lien or the seizure or sale of any or all of the assets against which the lien was registered.

11 Section 20 is amended

(a) in subsection (3) by striking out "is about to" and substituting "may", and

(b) by repealing subsection (6) and substituting the following:

(6) Unless a demand under this section is earlier satisfied, it continues in effect as follows:

(a) until 3 years after the demand is served, if it is made in respect of an outstanding legal claim or insurance claim that, if resolved in the taxpayer's favour, will result in money becoming available to the taxpayer;

(b) until 90 days after the demand is served, in any other case.

 
Income Tax Act

12 Section 3 (10) to (12) of the Income Tax Act, R.S.B.C. 1979, c. 190, is repealed.

13 The following section is added:

Refunds to mutual fund trusts

3.5 (1) In this section

"income earned in the taxation year in British Columbia", "income earned in the taxation year outside British Columbia", and "income for the year" have the same meanings as in section 3 (6);

"surtax" means the amount of the increase in tax referred to in section 3.4 (1).

(2) A mutual fund trust that is entitled to a refund under section 132 of the federal Act for a taxation year is entitled to receive, at the time and in the manner provided in section 132 of the federal Act for a refund under that section, a capital gains refund for the taxation year equal to

(a) where the trust had no income earned in the taxation year outside British Columbia, the product of the amount of the refund for the taxation year under section 132 of the federal Act multiplied by the percentage to be used under section 3 (5) of this Act in computing the tax payable by the trust under section 3 of this Act for the taxation year, or

(b) where the trust had income earned in the taxation year outside British Columbia, that proportion of the amount that would be determined under paragraph (a), if all income earned in the taxation year by the trust had been earned in British Columbia, that the income earned by it in the taxation year in British Columbia is of its total income for the year.

(3) A mutual fund trust that is entitled to a capital gains refund under subsection (2) for a taxation year and that has paid or is liable to pay surtax for the taxation year is entitled to receive an additional refund for the taxation year equal to the amount by which the surtax would be reduced, if the refund for the taxation year under subsection (2) was deducted from the tax on which the surtax was calculated.

(4) Where a mutual fund trust is entitled to a capital gains refund under subsection (2) and is liable or about to become liable to make a payment under this Act, the minister

(a) may apply all or part of the amount that would otherwise be refunded under subsection (2), and under subsection (3) if applicable, to the liability and pay to the trust the balance, if any, of the refund not so applied, and

(b) shall notify the trust of the amount so applied.

 
Motor Fuel Tax Act

14 Section 1 of the Motor Fuel Tax Act, S.B.C. 1985, c. 76, is amended in the definition of "collector" by adding ", 22.01 (2)" after "22 (1)".

15 The following section is added:

Prohibition against relabelling

22.01 (1) No person, other than a collector, shall sell any substance as a type of fuel unless that person purchased that substance as that type of fuel.

(2) For the purposes of this section, the director may, on conditions the director specifies, appoint a person as a collector.

16 Section 22.1 is amended

(a) in subsection (1) by adding ", 22.01 (2)" after "22 (1) (a)", and

(b) in subsection (2) (b) (iii) by adding "22.01 (2) or" after "section".

17 Section 53 (1) is amended by adding "22.01 (1)," after "22 (2),".

 
Public Sector Employers Act

18 Section 1 of the Public Sector Employers Act, S.B.C. 1993, c.65, is amended in paragraph (d) of the definition of "public sector employer" by adding "and the University of Northern British Columbia" after "University Act".

19 The following section is added to Division 1 of Part 3:

Application of the Society Act to employers' associations

8.1 (1) Sections 7 (1), 24 (1) and 31 of the Society Act do not apply to an employers' association.

(2) A member of an employers' association has the votes and may vote in the manner set out in the association's bylaws.

(3) The government may appoint to the board of directors of an employers' association the number of directors provided for in the bylaws of the association and the members of the association may in accordance with those bylaws nominate, elect or appoint the remaining directors.

(4) A director of an employers' association may be removed from office, and another director may be elected or appointed to serve during the balance of the term, in the manner provided for in the association's bylaws.

(5) A reference in the Society Act to a special resolution is, when read in relation to an employers' association established under this Act, to be read as a reference to

(a) a special resolution as defined in the association's bylaws, or

(b) if those bylaws do not define a special resolution, a special resolution as defined in the Society Act.

(6) If there is a conflict between a provision of this Act and a provision of the Society Act, the provision of this Act prevails.

 
Social Service Tax Act

20 Section 1 of the Social Service Tax Act, R.S.B.C. 1979, c.388, is amended

(a) in subsection (1) in the definition of "taxable service" by striking out "alter," wherever it appears, and

(b) by adding the following subsection:

(1.1) For the purposes of the definition of "fixture" in subsection (1) "apparatus" means a complex machine or device designed to accomplish a specific purpose and consisting of an integrated assembly of parts each having a definite function.

21 Section 2 is amended by adding the following subsection:

(4.016) A person who does not reside, ordinarily reside or carry on business in the Province who brings or sends into the Province or receives delivery in the Province of tangible personal property shall immediately report the matter in writing to the commissioner, supply to the commissioner all pertinent information required by the commissioner in respect of the tangible personal property and pay to Her Majesty in right of the Province tax on the purchase price of the tangible personal property at a rate established under subsection (1) or (1.02), as the case may be, if

(a) that person

(i) owns, or leases under a lease having a term of not less than 12 months, real property in the Province,

(ii) owns, or leases under a lease having a term of not less than 12 months, a site in the Province at which a boat may be moored,

(iii) has acquired a right to moor a boat at one or more sites in the Province, which right continues in effect throughout a period of not less than 12 months,

(iv) leases, under a lease having a term of not less than 12 months, a site in the Province at which a recreational vehicle may be parked or otherwise situated, or

(v) has acquired a right to park or otherwise situate a recreational vehicle at one or more sites in the Province, which right continues in effect throughout a period of not less than 12 months, and

(b) the tangible personal property brought, sent or delivered into the Province is, for the 12 month period following its entry into the Province, to be used or consumed primarily in the Province and to be used or consumed primarily by that person or by any other person or persons

(i) for whom that person acts as agent, or

(ii) whose use or consumption of the tangible personal property is at the expense of that person or at the expense of a principal for whom that person acts as agent.

22 Section 13 (1) is amended by striking out "or" at the end of paragraph (c), by adding "or" at the end of paragraph (d) and by adding the following:

(e) disputes a determination of the commissioner under section 18.1 (11), .

23 Section 18.1 is amended

(a) in subsection (1) by repealing the definition of "associated corporation" and substituting the following:

"associated corporation" means a corporation that

(a) is associated with another corporation within the meaning of section 256 of the Income Tax Act (Canada), or

(b) is determined under subsection (11) to be associated with another corporation for the purposes of this section; , and

(b) by adding the following subsections:

(10) Where the commissioner believes that one corporation is associated with another corporation within the meaning of section 256 of the Income Tax Act (Canada), the commissioner may request one or both of the corporations to provide to the commissioner the records and information required by the commissioner to confirm or rebut that belief.

(11) The commissioner may determine that the corporations are associated corporations for the purposes of this section where

(a) a corporation that has been requested to provide records or information to the commissioner under subsection (10) fails or refuses to comply with that request within a period of time considered by the commissioner to be reasonable in the circumstances, or

(b) the records or information provided to the commissioner under this section confirm the commissioner's belief that the corporations are associated.

(12) Immediately after a corporation is determined under this section to be associated with a person referred to in subsection (2) (a) (i) and (b) (i), the commissioner

(a) must so notify the corporation in writing, and

(b) may register a lien under this section against the real and personal property of the corporation.

(13) The commissioner may seize personal property against which a lien is registered under subsection (12) at any time after the registration of the lien but must not take any action to realize on those assets until the later of

(a) the date that is 90 days after the date on which the notice required under subsection (12) (a) was sent to the corporation, and

(b) if a notice of appeal is served on the minister in respect of the determination within the time provided by section 13 (1), the date on which the minister upholds the determination under that appeal.

(14) If, at any time, the commissioner becomes convinced that the corporations were not associated within the meaning of the section 256 of the Income Tax Act (Canada) at the time that the lien was registered under subsection (12) (b) or the minister or a court of competent jurisdiction upholds the corporation's appeal against the commissioner's determination on the basis that the corporations were not associated at the time that the lien was registered, the commissioner shall,

(a) if the commissioner has not realized on any of the assets against which the lien was registered, promptly release the lien, and

(b) if the commissioner has realized on some or all of the assets against which the lien was registered, promptly release the lien against the remaining assets and pay the proceeds realized from the sale of the realized assets minus any costs or expenses incurred in the sale

(i) to the corporation, or

(ii) where the commissioner considers it appropriate to do so, into the Supreme Court under Rule 48 of the Rules of Court.

(15) The release of the lien under subsection (14) (a) or the release of the lien and payment of the applicable net sale proceeds under subsection (14) (b) shall be deemed to be full satisfaction of all claims any person, including the corporation, might have arising out of or in any way connected with the determination made under subsection (11), the registration of the lien or the seizure or sale of any or all of the assets against which the lien was registered.

24 Section 22 is amended

(a) in subsection (3) by striking out "is about to" and substituting "may", and

(b) by repealing subsection (6) and substituting the following:

(6) Unless a demand under this section is earlier satisfied, it continues in effect as follows:

(a) until 3 years after the demand is served, if it is made in respect of an outstanding legal claim or insurance claim that, if resolved in the taxpayer's favour, will result in money becoming available to the taxpayer;

(b) until 90 days after the demand is served, in any other case.

25 Section 37 (2) is amended by adding the following paragraph:

(o) prescribing formulas for calculating the proportion of the amount of tax otherwise payable under section 2 that is payable by motor dealers on motor vehicles purchased by them primarily for resale or lease and used in a prescribed manner before resale or lease.

 
Taxation (Rural Area) Act

26 Section 29 of the Taxation (Rural Area) Act, R.S.B.C. 1979, c. 400, is amended

(a) in subsection (2) by adding "registration or" after "of the taxes or by", and

(b) by adding the following subsection:

(3) If the collector considers it appropriate to do so, the collector may register the lien or charge created by this section by registering a lien form against the property in the appropriate land title office in the same manner as a charge is registered under the Land Title Act.

Commencement

27 (1) Sections 3 to 8 come into force by regulation of the Lieutenant Governor in Council.

(2) Sections 18 and 19 are deemed to have come into force on November 30, 1993 and are retroactive to the extent necessary to give them effect on and after that date.

 
Explanatory Notes

 
Company Act

SECTION 1: corrects a wrong reference.

 
Cooperative Association Act

SECTION 2: allows documents filed with the Superintendent of Cooperatives to be imaged.

 
Financial Administration Act

SECTION 3:

(a) adds definition of "chief investment officer";

(b) repeals and replaces the definition of "pension fund" to add the capacity to add pension funds by regulation.

SECTION 4:

(a) amends section 36 to provide a "prudent person" standard for the investment of funds other than the general fund of the consolidated revenue fund and provides that the prudent person standard will not apply to a trust fund unless a regulation is made on the recommendation of the trustees of the trust fund;

(b) amends section 36 to allow the minister to invest funds in government bonds and notes.

SECTION 5: allows for investment powers to be given directly to the chief investment officer by the Lieutenant Governor in Council in respect of certain funds and allows for investment powers to be delegated by the Minister with respect of other funds. The new section 36.02 will allow for subdelegation by the chief investment officer.

SECTION 6: allows the costs of operating or administering pooled investment portfolios to be paid directly from the portfolio.

SECTION 7: requires delegations or directions by the Minister of Finance regarding investments and loans to be in writing.

SECTION 8: is consequential to the amendment to the definition of "pension fund".

 
Hotel Room Tax Act

SECTION 9: permits an appeal to be made against a determination by the director that 2 corporations are associated.

SECTION 10: permits the director to determine that 2 corporations are associated for the purpose of placing a lien against and seizing and selling the assets of a corporation associated with a tax debtor corporation.

SECTION 11:

(a) permits the director to issue a demand against any person who may owe money to a tax debtor, whether or not the payment of that money is imminent;

(b) provides that a demand made by the director to a person who may owe money to a tax debtor under an outstanding legal or insurance claim will remain in effect for a period of 3 years.

 
Income Tax Act

SECTIONS 12 and 13:repeal and replace the trust refund provisions to make them accord with the Income Tax Act (Canada) as required by the federal/Provincial tax collection agreement.

 
Motor Fuel Tax Act

SECTION 14: is consequential to section 22.01 of the Motor Fuel Tax Act enacted by this Bill.

SECTION 15: prohibits any person who has not been appointed as a collector from selling a substance as a type of fuel unless that person purchased that substance as that type of fuel.

SECTION 16: is consequential to section 22.01 of the Motor Fuel Tax Act enacted by this Bill.

SECTION 17: makes it an offence to contravene section 22.01 of the Motor Fuel Tax Act enacted by this Bill.

 
Public Sector Employers Act

SECTION 18: includes the University of Northern British Columbia within the definition of "public sector employer" in the Public Sector Employers Act.

SECTION 19: provides to employers' associations established under the Public Sector Employers Act limited exceptions to provisions of the Society Act that are inappropriate for those associations.

 
Social Service Tax Act

SECTION 20: is self explanatory.

SECTION 21: amends section 2 of the Social Service Tax Act to require a non-resident who brings tangible personal property into the Province to pay tax on the purchase price of that tangible personal property if the non-resident has a substantial connection with the Province, by lease or ownership of property or other property rights in the Province, and the tangible personal property is to be used or consumed in the Province for a period of at least 12 months.

SECTION 22: permits an appeal to be made against a determination by the commissioner that 2 corporations are associated.

SECTION 23: permits the commissioner to determine that 2 corporations are associated for the purpose of placing a lien against and seizing and selling the assets of a corporation associated with a tax debtor corporation.

SECTION 24:

(a) permits the commissioner to issue a demand against any person who may owe money to a tax debtor, whether or not the payment of that money is imminent;

(b) provides that a demand made by the commissioner to a person who may owe money to a tax debtor under an outstanding legal or insurance claim will remain in effect for a period of 3 years.

SECTION 25: permits regulations to be made respecting the calculation of the proportion of tax that is payable by motor dealers on inventory purchased and used by them.

 
Taxation (Rural Area) Act

SECTION 26: authorizes the registration of liens for delinquent taxes in order to ensure that the Province has the status of a secured creditor under the Bankruptcy and Insolvency Act (Canada).


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