Third Session, 44th General Assembly
50 Elizabeth II, 2001
AN ACT TO AMEND THE TAXATION OF UTILITIES
Received and Read the First Time
HONOURABLE JOAN MARIE AYLWARD
Minister of Finance and President of Treasury Board
Ordered to be printed by the Honourable House of Assembly
The purpose of this Bill is to amend the Taxation of Utilities and Cable Television Companies Act at subclause 2(3) by adding a new subsection 6(9) to the Act which would prevent the double taxation of utilities in areas where a band council can collect a similar tax under the Indian Act (Canada).
The remainder of the Bill would increase the administrative inspection and auditing powers of the province with respect to the collection of the tax on utilities operating in areas governed by the province under section 6 of the Act.
AN ACT TO AMEND THE TAXATION OF UTILITIES AND CABLE TELEVISION COMPANIES ACT
1. S.2 Amdt.
2. S.6 Amdt.
3. Ss.6.1 to 6.13 Added
4. S.9 Amdt.
Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:
1. (1) Section 2 of the Taxation of Utilities and Cable Television Companies Act is amended by adding immediately after paragraph (d) the following:
(d.1) "department" means the department presided over by the minister;
(2) Section 2 of the Act is amended by adding immediately after paragraph (e) the following:
(e.1) "inspector" means an inspector appointed under section 6.1;
(e.2) "minister" means the minister appointed under the Executive Council Act to administer this Act;
2. (1) Subsection 6(2) of the Act is amended by deleting the date "February 1" and substituting the date "March 1".
(2) Section 6 of the Act is amended by adding immediately after subsection (5) the following:
(5.1) A utility shall keep and maintain in the province and make available in the province for inspection, examination and audit under section 6.2, books, records, financial statements and other documents relating to the operations of that utility or make other arrangements with an inspector that may be satisfactory to the inspector with respect to the books, records, financial statements and other documents that are necessary for the purpose of section 6.2.
(5.2) Where the books, records, financial statements and other documents kept by a utility are, in the opinion of an inspector, inadequate for the purpose of section 6.2, the inspector may, by written order, require the books and records to be kept by the utility, the nature of the entries to be made in the books and records and the utility shall, within a reasonable time that the inspector may stipulate in the order, begin keeping the books and records as required.
(5.3) Where an inspector makes an order under subsection (5.2), the utility to which the order is directed shall comply with the order and failure to comply with the order is an offence.
(3) Section 6 of the Act is amended by adding immediately after subsection (8) the following:
(9) Where a by-law approved under section 83 of the Indian Act (Canada) imposes a tax upon a utility that is similar to tax imposed under subsection (1), that utility is not liable to pay tax under subsection (1) in respect of its gross revenue attributable to the area to which that by-law applies.
3. The Act is amended by adding immediately after section 6 the following:
6.1 (1) The minister may appoint or designate persons or a class of persons as inspectors for the purpose of the administration and enforcement of section 6 and regulations made with respect to section 6.
(2) The minister may authorize a person employed in the department or those persons or class of persons designated under subsection (1) to perform and exercise those duties imposed and powers conferred by this Act upon the inspector that may, in the opinion of the minister, be conveniently performed or exercised by that person and the performance or exercise of those duties or powers by that authorized person shall be of the same effect as if they were performed or exercised by the minister.
6.2 An inspector may, at reasonable times, enter into the business premises of a utility or the place where the utility's business is carried on, any property is kept, anything is done in connection with a utility or any books or records are, or should be, kept under section 6 or regulations made in respect of section 6 and may
(a) audit or examine the books of account, records, financial statements or other documents that relate or may relate to
(i) the information that is or should be in the books, records, financial statements or other documents, or
(ii) the amount of tax payable;
(i) a person who is or may be liable to pay tax, or
(ii) in the case of a utility liable to pay tax, the president, manager, secretary or director, agent or representative or another individual on the premises or in the place,
to give the inspector reasonable help with his or her audit or examination and to answer all questions relating to the audit or examination;
(c) for the purpose of paragraph (b), require a person mentioned in that paragraph to attend at the premises or place with the inspector; and
(d) where, during the course of an audit or examination, the inspector believes on reasonable grounds that there has been a contravention of this Act, the inspector may with a warrant issued under section 6.3 seize and take away books of account, records, financial statements and other documents that may be required as evidence of a contravention and may retain those documents until the time they are required in a court proceeding.
Search and seizure
6.3 (1) A Provincial Court judge, who is satisfied by information upon oath or affirmation that there are reasonable grounds for believing that there is on premises or at a place where a business is carried on anything that will give evidence with respect to a contravention of section 6, may issue a warrant authorizing an inspector or other person named in the warrant to enter and search those premises or that place and to make inquiries and copies of books of account, records, financial statements and other documents that are considered necessary, subject to those conditions that may be specified in the warrant.
(2) The utility or person in charge of the premises or place referred to in this section and persons found in the premises or place shall give an inspector or other person reasonable help to enable the inspector to carry out his or her duties and functions under this section and shall provide the information that the inspector may reasonably require.
(3) Notwithstanding section 6.2, an inspector may exercise the power of search referred to in that section without a warrant issued under subsection (1) where the conditions for obtaining the warrant exist but because of urgent circumstances it would not be practical to obtain the warrant.
(4) For the purpose of subsection (3), urgent circumstances include circumstances in which the delay necessary to obtain the warrant would result in danger to human life or safety or the loss or destruction of evidence.
Copies of documents
6.4 Where a document is seized, inspected, examined or provided under this Act for the purpose of enforcement of section 6, the person by whom it is seized, inspected or examined or to whom it is provided or a person authorized by the minister may make one or more copies of it, and a document purporting to be certified by the person by whom it is seized, inspected or examined or to whom it was provided or by a person authorized by the minister to be a copy is evidence of the nature and content of the original document and has the same probative force as the original document would have if it had been proven in the ordinary way.
Proceedings against inspectors
6.5 Where a court before which a proceeding is taken against an inspector for anything done by him or her under this Act or the regulations is satisfied that there was probable cause for the action of the inspector, and that his or her action was not malicious, a verdict or judgment shall not be given against the inspector for more than $0.05 for damages or for costs of suit.
6.6 (1) Where
(a) the statement of a utility is not, in the opinion of the inspector, substantiated by books and records of the utility; or
(b) upon inspection or examination of a statement and other books, records and documents, it appears to the satisfaction of the inspector that tax payable by a utility under section 6 in respect of a particular period has not been paid,
the inspector may make an assessment of the amount of tax payable by the utility in respect of that month or period, and the amount assessed shall be considered to be the amount of tax payable by the employer in respect of that month or period.
(a) the books, records, financial statements and other documents kept by a utility are, in the opinion of the inspector, inadequate for the purpose of section 6;
(b) after being requested by the inspector to produce his or her books, records, financial statements and other documents a utility fails or refuses to produce his or her books, records, financial statements and other documents for examination for the purpose of section 6; or
(c) a utility alleges that its books, records, financial statements or other documents have been lost or destroyed,
the inspector may make an assessment of the tax payable by the utility in respect of a particular period on the basis of the inspector's valuation of the amount taxable of the utility, and the amount assessed shall be considered to be the amount of tax payable by the utility in respect of that period.
(3) Where the inspector has made an assessment, the inspector is not, because of the assessment, prevented or prohibited from making a further assessment of the amount of tax payable by the utility in respect of that period.
(4) Where it appears from an inspection, audit or examination of the books of account, records, financial statements or other document of a utility that section 6 has not been complied with, the inspector making the inspection, audit or examination shall calculate the tax payable by the utility in a manner and form and by a procedure that the inspector considers necessary, and the inspector shall assess the amount of the tax payable by the utility.
(5) An inspector may serve personally or by registered mail a notice of an assessment on the utility and may require the utility to pay, or otherwise account, to the inspector for the assessed tax payable within 30 days after service of the notice of assessment.
(6) A utility that is served with a notice of assessment shall pay, or otherwise account for, the assessed tax payable within 30 days after the day on which the notice of assessment is served, whether or not an appeal is taken from, or an objection is made to, the assessment.
(7) The notice of assessment mentioned in subsection (5) is admissible in evidence, without proof of the office or signature of the person appearing to have signed the notice, as, in the absence of evidence to the contrary, proof that the amount stated in the notice is due.
Review to minister
6.7 (1) Where a utility disputes the amount of an assessment made under section 6.6, the utility may directly, or by its agent, within 60 days after receiving the notice of the assessment, serve a notice of review upon the minister.
(2) The notice of review served under subsection (1) shall be in writing and shall set out clearly the reasons for the review and the facts relative to the review.
(3) Upon receipt of a notice served under subsection (1), the minister shall consider the matter being reviewed and may affirm, rescind or amend the assessment and shall send by registered mail to the utility or serve upon the utility notice of his or her decision.
Appeal to Trial Division
6.8 (1) Where a utility is dissatisfied with the decision of the minister given under section 6.7, the utility may appeal from that decision to the Trial Division.
(2) An appeal under subsection (1) shall be made by filing in the Trial Division, within 60 days after the date on which the notice of the decision reviewed was sent by registered mail or served under subsection 6.7(3), or a further period that a judge of the court may on application allow, a statement of claim naming the Crown as the defendant and setting out the grounds of the appeal.
(3) Upon a statement of claim being filed under subsection (2), the proceeding shall continue in the same manner as other proceedings in the Trial Division unless the court otherwise orders, and a party to the proceeding may apply to a judge of the Trial Division for directions as to the conduct of or steps to be taken in the proceeding and a judge of the Trial Division may make the order that he or she thinks advisable respecting the conduct of the proceeding and steps to be taken.
(4) Upon an appeal under this section, the court may affirm, set aside or vary the decision appealed and may, in delivering judgment disposing of the appeal, order payment or repayment of the tax, interest and penalties, or costs, by the utility or the government.
Irregularity in estimates
6.9 An assessment of tax made by the minister and confirmed or amended under section 6.7 shall not be varied or disallowed because of an irregularity, informality, omission or error on the part of a person in the observation of a directory provision of this Act or the regulations up to the date of the issuing of the notice of the estimate.
Effect of delay
6.10 Neither the giving of a notice of appeal by a person nor a delay in the hearing of that appeal
(i) the due date of a tax or part of a tax imposed under section 6 that is the subject matter of an appeal,
(ii) the interest or fines provided by this Act in respect of a tax as due, or
(iii) liability for payment of a tax provided by this Act; or
(b) delays the collection of a tax,
but where the tax is set aside or reduced on appeal, the minister shall refund to the person entitled to the refund the excess of tax paid and of an additional fine or interest paid on the tax.
6.11 (1) Notwithstanding another Act, the minister may remit a fine or interest imposed under this Act with respect to a tax imposed under section 6.
(2) A remission under this section may be total or partial, conditional or unconditional, and may be granted whether before or after or pending a suit or proceeding for the recovery of a fine or interest and before or after a payment of the fine or interest has been made or enforced by process or execution.
Application of Financial Administration Act
6.12 Subsections 19(3) and (4) of the Financial Administration Act apply, with the modifications that the circumstances require, to remissions under section 6.11.
6.13 (1) Where a utility pays to the minister an amount that exceeds the amount of tax required to be paid under section 6, the minister may refund to that utility the amount of the overpayment, together with interest, at the rate and in the manner that is prescribed.
(2) Notwithstanding subsection (1), where a utility owes money to the Crown under this or another Act, the minister shall deduct the amount owing from the refund and shall inform the utility of the set-off.
(3) Notwithstanding subsection (1), the minister shall not make a payment under this section unless the overpayment is disclosed to or by the minister within 3 years from the date on which that overpayment was made.
(4) Notwithstanding subsection (1), refund and interest payments under this section may be restricted or denied as prescribed by regulation.
(5) Money paid under this section shall be paid out of the Consolidated Revenue Fund and shall be accounted for as a reduction of revenues under this Act.
4. Section 9 of the Act is amended by deleting the word "and" at the end of paragraph (e), by deleting the period at the end of paragraph (f) and substituting a semi-colon, and by adding immediately after paragraph (f) the following:
(g) prescribing the circumstances under which refunds and interest may be granted or denied and setting restrictions on the granting or denying of refunds and interest;
(h) prescribing rates and methods of calculating interest, the documents, times and manner of paying refunds, interest and the making of other payments; and
(i) generally to give effect to the purpose of this Act.
©Earl G. Tucker, Queen's Printer