S-227
Second Session, Fortieth Parliament,
57-58 Elizabeth II, 2009
SENATE OF CANADA
BILL S-227
An Act to amend the Income Tax Act and the Excise Tax Act (tax relief for Nunavik)
first reading, February 11, 2009
THE HONOURABLE SENATOR WATT
3910622
SUMMARY
This enactment provides tax relief in Nunavik by
(a) amending the Income Tax Act to provide an individual who meets certain residency requirements with a deduction of $70 for each day on which he or she resided in Nunavik during a qualifying period in a taxation year, to be deducted in computing the individual's taxable income; and
(b) amending the Excise Tax Act to provide for a 0% GST tax rate on the supply of goods and services in Nunavik and to exempt petroleum products and fuels sold or purchased in Nunavik from certain excise and consumption or sales taxes.
Available on the Parliament of Canada Web Site at the following address:http://www.parl.gc.ca
2nd Session, 40th Parliament,
57-58 Elizabeth II, 2009
senate of canada
BILL S-227
An Act to amend the Income Tax Act and the Excise Tax Act (tax relief for Nunavik)
Preamble
Whereas the people of Nunavik, in the Province of Quebec, most of whom are Inuit, are experiencing a fiscal imbalance owing to the fact that their cost of living is exorbitant compared with that of Canadians living south of the fifty-fifth parallel;
Whereas the people of Nunavik are cut off from other Canadians geographically, economically and politically, and their living conditions are desperate and deteriorating further because of isolation and distance;
Whereas the high cost of transportation has a direct impact on the cost of goods and services, and this seriously limits people’s purchasing power;
Whereas, on a per capita basis, the Inuit are the most heavily taxed people in Canada;
Whereas the level of taxation erodes people’s savings and makes it extremely difficult for small businesses to operate at a profit;
Whereas tax relief is necessary to promote economic prosperity and social well-being in Nunavik;
Whereas the Parliament of Canada recognizes the need to act in order to remove the economic injustice endured by the people of Nunavik;
Whereas studies carried out by various institutions have strongly recommended changes to the tax system in order to exempt the Inuit of Nunavik from paying income tax;
And whereas the same recommendations have called for government transfers to be indexed in order to better reflect the cost of living in Nunavik;
Now, therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
R.S., 1985, c.1 (5th Supp.)
INCOME TAX ACT
1. (1) The portion of subsection 110.7(1) of the Income Tax Act before paragraph (a) is replaced by the following:
Residing in prescribed zone or Nunavik
110.7 (1) Where, throughout a period (in this section referred to as the “qualifying period”) of not less than 6 consecutive months beginning or ending in a taxation year, a taxpayer who is an individual has resided in one or more particular areas each of which is a prescribed northern zone or prescribed intermediate zone for the year or Nunavik and files for the year a claim in prescribed form, there may be deducted in computing the taxpayer’s taxable income for the year
(2) Subsection 110.7(1) of the Act is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):
(c) the amount obtained by multiplying $70 by the number of days in the year included in the qualifying period in which the taxpayer resided in Nunavik.
(3) Subsection 110.7(2) of the Act is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):
(c) where the area is Nunavik, 100%.
(4) Subsection 110.7(5) of the Act is replaced by the following:
Residing in more than one area
(5) Where on any day an individual resides in more than one particular area referred to in subsection 110.7(1), for the purpose of that subsection, the individual shall be deemed to reside in only one such area on that day and, for greater certainty, Nunavik and the prescribed northern zone that includes Nunavik are two particular areas for the purpose of this subsection.
(5) Section 110.7 of the Act is amended by adding the following after subsection (5):
Definition of “Nunavik”
(6) In this section, “Nunavik” has the meaning assigned to the word “Territory” by An Act respecting Northern villages and the Kativik Regional Government, Chapter V-6.1 of the Revised Statutes of Quebec, as amended from time to time.
R.S., 1985, c. E-15
EXCISE TAX ACT
2. Subsection 2(1) of the Excise Tax Act is amended by adding the following in alphabetical order:
“Nunavik”« Nunavik »
“Nunavik” has the meaning assigned to the word “Territory” by An Act respecting Northern villages and the Kativik Regional Government, Chapter V-6.1 of the Revised Statutes of Quebec, as amended from time to time.
3. Subsection 50(5) of the Act is amended by striking out “or” at the end of paragraph (k), by adding “or” at the end of paragraph (l) and by adding the following after paragraph (l):
(m) sold or purchased in Nunavik, if the goods are goods enumerated in Schedule II.1 or Part VI of Schedule III.
4. Schedule I to the Act is amended by adding the following after section 9.1:
9.2 Sections 9 and 9.1 do not apply in respect of any of the goods mentioned in those sections that are sold or purchased in Nunavik.
5. Schedule VI to the Act is amended by adding the following after Part X:
PART XI
NUNAVIK
1. In this Part, “Nunavik” has the meaning assigned to the word “Territory” by An Act respecting Northern villages and the Kativik Regional Government, Chapter V-6.1 of the Revised Statutes of Quebec, as amended from time to time.
2. A supply of property or a service made in Nunavik.
COMING INTO FORCE
Coming into force
6. This Act comes into force on January 1 of the year following the year in which it receives royal assent.
Published under authority of the Senate of CanadaAvailable from:Publishing and Depository ServicesPublic Works and Government Services Canada
Explanatory Notes
Income Tax Act
Clause 1: (1) Relevant portion of subsection 110.7(1):
110.7 (1) Where, throughout a period (in this section referred to as the “qualifying period”) of not less than 6 consecutive months beginning or ending in a taxation year, a taxpayer who is an individual has resided in one or more particular areas each of which is a prescribed northern zone or prescribed intermediate zone for the year and files for the year a claim in prescribed form, there may be deducted in computing the taxpayer’s taxable income for the year
(2) New.
(3) Relevant portion of subsection 110.7(2):
(2) For the purpose of subsection 110.7(1), the specified percentage for a particular area for a taxation year is
(4) Existing text of subsection 110.7(5):
(5) Where on any day an individual resides in more than one particular area referred to in subsection 110.7(1), for the purpose of that subsection, the individual shall be deemed to reside in only one such area on that day.
(5) New.
Excise Tax Act
Clause 2: New.
Clause 3: Relevant portion of subsection 50(5):
(5) Notwithstanding anything in subsection (1), the consumption or sales tax shall not be payable on goods
Clause 4: New.
Clause 5: New.