ARCHIVED — Vol. 147, No. 2 — January 16, 2013

Registration

SI/2013-1 January 16, 2013

FINANCIAL ADMINISTRATION ACT

British Columbia Forestry Revitalization Remission Order

P.C. 2013-2 January 11, 2013

His Excellency the Governor General in Council, considering that it is in the public interest to do so, on the recommendation of the Minister of Finance, pursuant to section 23 (see footnote a) of the Financial Administration Act (see footnote b), makes the annexed British Columbia Forestry Revitalization Remission Order.

BRITISH COLUMBIA FORESTRY REVITALIZATION REMISSION ORDER

INTERPRETATION

Definitions

1. (1) The following definitions apply in this Order.

“Act”
« Loi »

“Act” means the Income Tax Act.

“declaration of Subtrust”
« déclaration de sous-fiducie »

“declaration of Subtrust” means the declaration, dated January 3, 2012, that sets out the terms and conditions of the Subtrust.

“eligible amount”
« montant admissible »

“eligible amount”, in respect of an eligible taxpayer, means an amount paid by the Subtrust in respect of the eligible taxpayer’s Eligible Income Tax, within the meaning assigned by section 2.02 of the declaration of Subtrust, that is attributable to an FRT Contractor Mitigation Amount.

“eligible taxpayer”
« contribuable admissible »

“eligible taxpayer” has the meaning assigned by section 2.04 of the declaration of Subtrust.

“FRT Contractor Mitigation Amount”
« montant compensatoire de la FRT  »

“FRT Contractor Mitigation Amount” has the meaning assigned by section 2.01 of the declaration of Subtrust.

“Subtrust”
« sous-fiducie »

“Subtrust” means the 2011 Contractor Mitigation Account Subtrust that was established on January 3, 2012, and is a subtrust of the BC Forestry Revitalization Trust II.

Application of meanings in Act

(2) Unless the context otherwise requires, words and expressions used in this Order have the same meaning as in the Act.

REMISSION

Eligible amount

2. Remission is granted to each eligible taxpayer of the income tax paid or payable under Part I of the Act for a taxation year, and of any related interest and penalties, that are attributable to an eligible amount paid in the year by the Subtrust to, or for the benefit of, the eligible taxpayer.

FRT Contractor Mitigation Amount

3. Remission is granted to each eligible taxpayer in respect of whom an eligible amount has been paid by the Subtrust of the amount of any interest and penalties paid or payable to the extent that they relate to income tax under Part I of the Act that is attributable to an FRT Contractor Mitigation Amount paid to, or for the benefit of, the eligible taxpayer.

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal

To make the annexed British Columbia Forestry Revitalization Remission Order.

The Order provides, first, for the remission to each eligible taxpayer of taxes paid or payable by the taxpayer under the Income Tax Act as a result of payments from the 2011 Contractor Mitigation Account Subtrust (the Subtrust), second for the remission of interest and penalties related to income taxes in respect of the previous payments from the BC Forest Revitalization Trust and the BC Forestry Revitalization Trust II (the Trusts), as well as in respect of the payments from the Subtrust.

Objective

To serve the public interest.

Background

In 2003 and 2008, the Province of British Columbia (the Province) created the Trusts to compensate eligible contractors for the loss of their contractual rights because of timber reallocation resulting from the restructuring of the Province’s forestry sector under its Forestry Revitalization Act. Because of this restructuring, contractors suffered financial hardship. A purpose of the Trusts was to mitigate the adverse financial impacts that they suffered. The amount of compensation received by contractors was generally related to the value of lost contracts and redundant equipment. This amount was included in computing the income of contractors under Part I of the Income Tax Act and the net benefits to them were consequently lower. On the initiative of the Province, the Subtrust was created to make new payments to the contractors, or to the Receiver General for Canada for the benefit of contractors, to compensate for income taxes paid or payable by the contractors in respect of the previous payments from the Trusts.

Implications

The cost of this Remission Order is estimated to be $2.5 million. This cost includes the remission of taxes payable in respect of payments from the Subtrust (i.e. to compensate the tax paid or payable in respect of payments from the Trusts). The cost also includes interest and penalties in respect of income taxes payable on payments from the Trusts and the Subtrust.

Departmental contact

Ève Pentassuglia
Tax Legislation Division
Department of Finance
140 O’Connor Street
Ottawa, Ontario
K1A 0G5
Telephone: 613-992-5636