66.1 (1) Every bank shall pay a tax under this section for a taxation year equal to the amount, if any, determined according to the following formula: T = 0.00112 × (A – $400,000,000) × B/C × D/A where, “T” is the amount of tax payable by the bank under this section for the taxation year; “A” is the amount of the bank’s taxable paid-up capital for the taxation year determined under Division B; “B” is the number of days in the taxation year that are after May 7, 1996 and before May 7, 1997; “C” is the number of days in the taxation year; and “D” is the portion of the bank’s taxable paid-up capital for the taxation year determined under Division B that would not be deemed under rules prescribed by the regulations to be used by the bank in the taxation year in a jurisdiction other than Ontario. 1997, c. 43, Sched. A, s. 36 (1); 2004, c. 16, s. 2 (2). Surcharge on deposit-taking institutions (1.1) Every corporation, other than a credit union, that is a deposit-taking institution for a taxation year shall pay a tax under this section for the taxation year equal to the amount, if any, determined according to the following formula: T = 0.0009 × (A – B) × C/D × E/A where, “T” is the amount of tax payable by the corporation under this section for the taxation year; “A” is the amount of the corporation’s adjusted taxable paid-up capital for the taxation year as determined under Division B.1; “B” is the corporation’s exempt amount for the taxation year; “C” is the number of days in the taxation year that are after May 6, 1997 and before November 1, 1998; “D” is the number of days in the taxation year; “E” is the amount of the corporation’s adjusted taxable paid-up capital for the taxation year as determined under Division B.1, multiplied by the percentage of the corporation’s taxable paid-up capital for the taxation year that would not be deemed by rules prescribed by the regulations to be used by the corporation in the taxation year in a jurisdiction other than Ontario. 1997, c. 43, Sched. A, s. 36 (1); 2004, c. 16, s. 2 (2). Deposit-taking institution, exempt amount (1.2) For the purposes of this section, (a) a corporation is a deposit-taking institution for a taxation year if at any time in the taxation year it is, (i) a corporation referred to in clause (a), (b), (c) or (f) of subsection 58 (2), or (ii) a corporation all or substantially all of the assets of which are shares or indebtedness of corporations referred to in subclause (i) or this subclause to which the corporation is related; (b) if the corporation is not related in a taxation year to another corporation that, (i) is a financial institution, (ii) has a permanent establishment in Canada, and (iii) is not exempt by virtue of subsection 71 (1) from tax under this Part, the corporation’s exempt amount for the taxation year is $400,000,000; and (c) if the corporation is related in a taxation year to another corporation that, (i) is a financial institution, (ii) has a permanent establishment in Canada, and (iii) is not exempt by virtue of subsection 71 (1) from tax under this Part, the corporation’s exempt amount for the taxation year is the amount determined by multiplying $400,000,000 by the ratio of the corporation’s taxable capital employed in Canada for the taxation year for the purposes of Part I.3 of the Income Tax Act (Canada) to the total of the taxable capital employed in Canada for the purposes of Part I.3 of the Income Tax Act (Canada) of, (iv) the corporation for the taxation year, and (v) each such related financial institution for its last taxation year ending before the end of the corporation’s taxation year.  1997, c. 43, Sched. A, s. 36 (1); 1998, c. 34, s. 51; 2004, c. 16, s. 2 (2). Small business investment tax credit (2) A financial institution may deduct from its tax otherwise payable for a taxation year under this Part a small business investment tax credit in an amount not exceeding the least of, (a) the amount of its tax earn-back account for the year; (b) the amount of its small business investment tax credit account for the year or nil, if the amount of its small business investment tax credit account is not greater than zero; and (c) the amount of the tax payable by the financial institution under this Part for the year.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Tax earn-back account (3) The amount of a financial institution’s tax earn-back account for a taxation year is the amount, if any, by which, (a) the total of its eligible tax for the taxation year and, subject to subsection (3.1), the three prior taxation years, plus the total of all small business investment tax credit repayments, if any, required to be paid under subsection (12) for the three prior taxation years, exceeds, (b) the total of all small business investment tax credits that were deductible and deducted by the institution under subsection (2) in the three prior taxation years from amounts included by the institution under clause (a) in computing its tax earn-back account for the taxation year.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Computation of amount (3.1) In computing the amount described in clause (3) (a) for a taxation year, a financial institution may only include an amount in respect of its eligible tax for the third taxation year immediately preceding the taxation year to the extent that, (a) the institution has included tax credit amounts under clause (4) (a) in computing its small business investment tax credit account for the year in respect of eligible investments made before December 31 of the calendar year ending in the taxation year; and (b) the tax credit amounts referred to in clause (a) exceed the amount of all small business investment tax credits that were deductible and deducted by the institution under subsection (2) for a preceding taxation year.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Eligible tax (3.2) The amount of the eligible tax for a taxation year of a financial institution, other than a credit union, is the total of, (a) the amount of tax, if any, payable by the financial institution under this section for the taxation year; and (b) the amount calculated for the taxation year using the formula, (A – B ) × (C × D × 0.2) in which, “A” is the amount of the adjusted taxable paid-up capital of the financial institution for the taxation year as determined under Division B.1, “B” is the exempt amount of the financial institution for the taxation year as determined under clauses (1.2) (b) and (c), “C” is the percentage of the taxable paid-up capital of the financial institution that is not deemed, under the prescribed rules, to be used by it in the taxation year in a jurisdiction other than Ontario, and “D” is the sum of, (a) 0.9 per cent multiplied by the ratio of the number of days in the taxation year that are before January 1, 2007 to the total number of days in the taxation year, and (b) 0.675 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2006 and before January 1, 2009 to the total number of days in the taxation year. 2004, c. 31, Sched. 9, s. 33; 2006, c. 9, Sched. D, s. 3; 2007, c. 7, Sched. 6, s. 11; 2008, c. 7, Sched. E, s. 12. Same (3.3) The amount of a credit union’s eligible tax for a taxation year is the total amount of tax payable by the credit union under this Part for the taxation year, if the taxation year commences after December 31, 1997 and, if the taxation year commences before January 1, 1998, the amount, if any, of the tax payable for the year that applies to the portion of the taxation year that is after December 31, 1997.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Small business investment tax credit account (4) The amount of a financial institution’s small business investment tax credit account for a taxation year is the amount by which the total of, (a) all amounts each of which is a tax credit amount in respect of an eligible investment made before the end of the taxation year in a qualifying small business corporation, qualifying small business or community small business investment fund corporation by, (i) the financial institution, if it is a deposit-taking institution, (ii) a specified corporation related to the financial institution at the time the investment was made, or (iii) a deposit-taking institution or an insurance corporation related to the financial institution at the time the investment was made; and (b) the total of all small business investment tax credit repayments required to be paid by the institution under subsection (12) for prior taxation years, exceeds the total of, (c) all amounts each of which is an amount, if any, determined under rules prescribed by the regulations in respect of the disposition after May 7, 1996 and before the end of the taxation year of an investment prescribed by the regulations; and (d) all small business investment tax credits that were deductible and deducted by the institution under subsection (2) for prior taxation years.  1997, c. 43, Sched. A, s. 36 (2); 1998, c. 5, s. 20 (1); 2004, c. 16, s. 2 (2). Eligible investments made by related financial institution or specified corporation (4.1) Where a financial institution includes a tax credit amount under clause (4) (a) in computing its small business investment tax credit account for a taxation year in respect of an eligible investment made by a related deposit-taking institution, a related insurance corporation, or a specified corporation, no tax credit amount in respect of the eligible investment may be included in computing the small business investment tax credit account of any other financial institution for any taxation year.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Same (4.2) A tax credit amount in respect of an eligible investment made by a specified corporation that is not a financial institution may be included by a financial institution in computing its small business investment tax credit account only in the proportion that the fair market value of the shares of the specified corporation not held by a person unrelated to the financial institution is of the total fair market value of the shares of the specified corporation issued and outstanding at the time that the investment is made.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Tax credit amount – Below-prime loan (4.3) A tax credit amount in respect of an eligible investment that is a below-prime loan is included in computing a financial institution’s small business investment tax credit account for each year in which the loan is outstanding, each tax credit amount being equal to 4 per cent of the average outstanding balance of the loan during the taxation year.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Same (4.4) No tax credit amount in respect of a below-prime loan may be included by a financial institution in computing its small business investment tax credit account for a taxation year if, as a result of including a tax credit amount in respect of that below-prime loan, the total of all tax credit amounts calculated for the year and included in computing the institution’s small business investment tax credit account for the year in respect of below-prime loans outstanding in the year would exceed 75 per cent of the amount of the institution’s tax earn-back account for the year.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Tax credit amount – Investment in a community small business investment fund corporation (4.5) A tax credit amount in respect of an eligible investment that is an investment made before January 1, 2004 in a community small business investment fund corporation in accordance with the Community Small Business Investment Funds Act, 1992 is the amount equal to 30 per cent of the amount of equity capital paid by the financial institution, specified corporation or insurance corporation to the corporation on the issuance of Class A shares to the financial institution, specified corporation or insurance corporation.  1997, c. 43, Sched. A, s. 36 (2); 1999, c. 9, s. 88; 2002, c. 22, s. 51; 2004, c. 16, s. 2 (2). Same (4.6) Subsection (4.5) applies only if the financial institution claiming a tax credit in respect of the investment has applied for the tax credit, in a form approved by the Minister, and the Minister has allowed the application.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Same (4.7) If subsection (4.5) applies, the financial institution may include under clause (4) (a), in computing its small business investment tax credit account for a taxation year, an additional tax credit amount equal to 30 per cent of the amount of equity capital paid by the financial institution, specified corporation or insurance corporation to the corporation on the issuance of Class A shares to the financial institution, specified corporation or insurance corporation, to the extent that the corporation has reinvested the capital in eligible investments under the Community Small Business Investment Funds Act, 1992 in the taxation year.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Tax credit amount – Patient capital investment (4.8) A tax credit amount in respect of an eligible investment that is a patient capital investment in a qualifying small business or qualifying small business corporation is the amount determined in accordance with the following rules: 1. In the formulas described in paragraphs 2, 3, 4 and 5 of this subsection, the values represented by “A”, “B”, “C”, “D”, “E” and “F” have the following meanings: “A” is the tax credit amount in respect of the investment, “B” is the consideration for which the investment was issued, “C” is the amount, not exceeding $250,000, by which the amount of the total assets or the amount of the gross revenue, measured immediately before the investment is made, whichever is greater, of the associated group of which the qualifying small business corporation or qualifying small business is a member, is greater than $500,000, “D” is the amount, not exceeding $4,000,000, by which the amount of the total assets or the amount of the gross revenue, measured immediately before the investment is made, whichever is greater, of the associated group of which the qualifying small business corporation or qualifying small business is a member, is greater than $1,000,000, “E” is the amount, not exceeding $50,000, of the consideration in excess of $50,000 for which the investment was issued, and “F” is the amount, not exceeding $750,000, of the consideration in excess of $250,000 for which the investment was issued. 2. Where the investment was issued for consideration not exceeding $100,000, the tax credit amount in respect of the investment is the amount determined in accordance with the following formula: A = {(B × 20%) + [B × 55% × the greater   of zero and (1 – C/$250,000 – E /   $50,000)]} × (1 – D/$4,000,000) 3. Where the investment was issued for consideration greater than $100,000 but not exceeding $1,000,000, the tax credit amount in respect of the investment is the amount determined in accordance with the following formula: A = {(B × 10%) + [B × 10% × (1 – F/$750,000)]}   × (1 – D/$4,000,000) 4. Where the investment was issued for consideration greater than $1,000,000, the tax credit amount in respect of the investment is the amount determined in accordance with the following formula: A = (B × 10%) × (1 – D/$4,000,000) 5. Paragraph 2 shall not apply to determine the tax credit amount in respect of a patient capital investment made by a financial institution in a qualifying small business or qualifying small business corporation for consideration not exceeding $100,000 if the total consideration of all eligible investments issued by the corporation or business to the institution exceeds $100,000.  Where this is the case, the tax credit amount in respect of the eligible investment is determined in accordance with the following formula: A = (B × 20%) × (1 – D/$4,000,000) 1997, c. 43, Sched. A, s. 36 (2); 1998, c. 5, s. 20 (2); 2004, c. 16, s. 2 (2). Eligible investment (4.9) An eligible investment is an investment that is a below-prime loan, a patient capital investment, or a Class A share issued by a corporation registered as a community small business investment fund corporation under the Community Small Business Investment Funds Act, 1992.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Below-prime loans (4.10) A below-prime loan is a loan for an aggregate amount not exceeding $50,000 made to a qualifying small business corporation or qualifying small business after May 6, 1997, if the following conditions are satisfied: 1. Where the loan is made at a fixed rate of interest, the rate of interest payable in respect of the loan is less than the average bank prime rate at the time the loan is made. 2. Where the loan is made at a floating rate of interest, the agreement in respect of the loan provides that the rate of interest payable in respect of the loan at any time must be less than the average bank prime rate at that time. 3. The loan is not made to a person carrying on a business prescribed by the regulations. 4. The amount of the total assets or the amount of the gross revenue, measured immediately before the investment is made, whichever is greater, of the associated group of which the qualifying small business corporation or qualifying small business is a member, does not exceed $500,000 at the time the loan is made. 5. The loan is not used for a purpose or in a manner prescribed by the regulations.  1997, c. 43, Sched. A, s. 36 (2); 1998, c. 5, s. 20 (3); 2004, c. 16, s. 2 (2). Deeming provision (4.11) Where a qualifying small business corporation or qualifying small business to which a below-prime loan is made certifies to the financial institution, specified corporation or insurance corporation making the loan that the corporation or business is a qualifying small business corporation or qualifying small business for the purposes of the Act and that the conditions described in paragraphs 3, 4 and 5 of subsection (4.10) are or will be satisfied, the corporation or business will be deemed to be a qualifying small business corporation or qualifying small business for the purposes of the Act and the conditions described in paragraphs 3, 4 and 5 of subsection (4.10) will be deemed to be satisfied.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Penalty (4.12) Where a qualifying small business corporation or qualifying small business provides a certification to a financial institution, specified corporation or insurance corporation in accordance with subsection (4.11), the facts stated in the certification are false, and the Minister considers that the individual stating them should reasonably have known that they were false, the corporation or business shall, subject to subsection (4.13), pay a penalty equal to the lesser of, (a) $2,000; or (b) the tax credit amount claimed by a financial institution in respect of the below-prime loan to which the certification relates.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Exception (4.13) Subsection (4.12) does not apply if the corporation or business provides evidence that satisfies the Minister that the individual stating the facts believed them to be true.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Patient capital investments (4.14) A patient capital investment is an investment that is made after May 6, 1997 in a qualifying small business corporation or a qualifying small business if, (a) the investment is in accordance with the rules prescribed by the regulations; and (b) the investment is not used by the corporation or business for a purpose or in a manner prescribed by the regulations.  1997, c. 43, Sched. A, s. 36 (2); 2004, c. 16, s. 2 (2). Qualifying small business corporation (5) A corporation is a qualifying small business corporation at a particular time if, (a) it is a Canadian-controlled private corporation; (b) it carries on business in Ontario through one or more permanent establishments; (c) it satisfies the conditions prescribed by the regulations; and (d) all or substantially all of the fair market value of the corporation’s assets is attributable to assets used principally in an active business carried on by the corporation primarily in Ontario.  1996, c. 18, s. 20; 2004, c. 16, s. 2 (2). Same (6) A corporation is also a qualifying small business corporation at a particular time if it is associated with a corporation referred to in subsection (5) and satisfies the conditions prescribed by the regulations.  1996, c. 18, s. 20; 2004, c. 16, s. 2 (2). (7) Repealed:  1997, c. 43, Sched. A, s. 36 (3). Specified corporation (8) A corporation is a specified corporation with respect to a particular investment in a qualifying small business corporation if, (a) it is either a specialized financing corporation for the purposes of Part IX of the Bank Act
(Canada) or a type of corporation prescribed by the regulations; and (b) it satisfies the requirements prescribed by the regulations.  1996, c. 18, s. 20; 2004, c. 16, s. 2 (2). (9) Repealed:  1997, c. 43, Sched. A, s. 36 (4). (10) Repealed:  1997, c. 43, Sched. A, s. 36 (5). Determination of total assets and gross revenue (11) For the purposes of this section, the amount of the total assets and the amount of the gross revenue of the associated group of which a qualifying small business or qualifying small business corporation is a member shall be determined in accordance with the following rules: 1. The total assets of the associated group shall include the total assets of all businesses and corporations in the group. 2. The gross revenue of the associated group shall include the gross revenue of all businesses and corporations in the group. 3. The total assets of a business or corporation in the associated group shall include, if the business or corporation is a member of a partnership that is not a member of the associated group, the same proportion of the total assets of the partnership, as recorded in the books and records of the partnership, as the proportion of the balance of the business’s or corporation’s capital account in the partnership to the total of the capital account balances of all partners of the partnership. 4. The gross revenue of a business or corporation in the associated group shall include, if the business or corporation is a member of a partnership that is not a member of the associated group, the same proportion of the gross revenue of the partnership, as recorded in the books and records of the partnership, as the proportion of the income or loss of the partnership to which the business or corporation is entitled as a partner of the partnership. 5. Except as otherwise provided in this subsection and the regulations, the total assets and the gross revenue of a business or corporation in the associated group shall be determined in accordance with generally accepted accounting principles on an unconsolidated basis.  1997, c. 43, Sched. A, s. 36 (6); 2001, c. 23, s. 43; 2004, c. 16, s. 2 (2). Small business investment tax credit repayment (12) If the amount described in clause (a) in respect of a financial institution for a taxation year is greater than zero, the financial institution shall pay to the Minister for the taxation year a small business investment tax credit repayment equal to the lesser of, (a) the amount by which the sum of the amounts determined under clauses (4) (c) and (d) for the taxation year exceeds the sum of the amounts determined under clauses (4) (a) and (b) for the taxation year; and (b) the amount by which the total of all small business investment tax credits deductible and deducted by the financial institution under subsection (2) for prior taxation years exceeds the total of all small business investment tax credit repayments required to be paid by the financial institution under this subsection for prior taxation years.  1997, c. 43, Sched. A, s. 36 (7); 2004, c. 16, s. 2 (2). Deemed tax (13) A small business investment tax credit repayment required to be paid by a financial institution for a taxation year shall be deemed to be tax payable by the financial institution under this Part for the taxation year.  1997, c. 43, Sched. A, s. 36 (8); 2004, c. 16, s. 2 (2). Definitions (14) In this section, “associated group”, in respect of a corporation or qualifying small business, has the meaning prescribed by the regulations; (“groupe”) “average bank prime rate”, on a particular date, has the meaning prescribed by the regulations; (“taux préférentiel bancaire moyen”) “deposit-taking institution” means a corporation described in clause (1.2) (a); (“institution de dépôt”) “qualifying small business” means a business that satisfies the conditions prescribed by the regulations. (“petite entreprise autorisée”)  1996, c. 18, s. 20; 1997, c. 43, Sched. A, s. 36 (9, 10); 2004, c. 16, s. 2 (2). Regulations (15) The Lieutenant Governor in Council may make regulations, (a) prescribing investments that will be eligible investments for the purposes of determining the amount of a financial institution’s small business investment tax credit under subsection (2) if they satisfy prescribed conditions, and prescribing those conditions; (b) prescribing rules for determining the tax credit amount for a taxation year in respect of an eligible investment that satisfies the conditions prescribed under clause (a); (c) prescribing rules for determining the amount of consideration for which an eligible investment is issued; (d) prescribing rules for determining whether an investment has been made in or issued by a person other than a corporation.  1997, c. 43, Sched. A, s. 36 (11); 2004, c. 16, s. 2 (2). Same (16) A regulation made under subsection (15) may be effective with reference to a period before it is filed.  1996, c. 18, s. 20; 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 1996, c. 18, s. 20 - 08/05/1996; 1996, c. 29, s. 57 - 08/05/1996; 1997, c. 43, Sched. A, s. 36 (1-11) - 07/05/1997; 1998, c. 5, s. 20 (1, 2) - 07/05/1997; 1998, c. 5, s. 20 (3) - 26/06/1998; 1998, c. 34, s. 51 - 07/05/1997; 1999, c. 9, s. 88 - 31/12/1998 2001, c. 23, s. 43
- 05/12/2001 2002, c. 22, s. 51
- 09/12/2002 2004, c. 16, s. 2 (2)
- 01/01/2004; 2004, c. 31, Sched. 9, s. 33 - 16/12/2004 2006, c. 9, Sched. D, s. 3 - 01/04/2007 2007, c. 7, Sched. 6, s. 11 - 17/05/2007 2008, c. 7, Sched. E, s. 12 - 01/01/2007 CTS 18 AU 10 - 2