Improve Economic Development in Nova Scotia, An Act to

BILL NO. 49

(as passed, with corrections)

2nd Session, 62nd General Assembly
Nova Scotia
63 Elizabeth II, 2014

Government Bill

An Act to Improve Economic
Development in Nova Scotia

CHAPTER 33 OF THE ACTS OF 2014

The Honourable Michel P. Samson
Minister of Economic and Rural Development and Tourism

First Reading: October 22, 2014 (LINK TO BILL AS INTRODUCED)

Second Reading: October 23, 2014

Third Reading: November 4, 2014

Royal Assent: November 20, 2014

An Act to Improve Economic
Development in Nova Scotia

Be it enacted by the Governor and Assembly as follows:

FILM AND CREATIVE INDUSTRIES
NOVA SCOTIA ACT

1 Section 2 of Chapter 20 of the Acts of 1990, the Film and Creative Industries Nova Scotia Act, as amended by Chapter 27 of the Acts of 2008 and Chapter 57 of the Acts of 2012, is further amended by

(a) adding immediately after clause (a) the following clause:

(aa) "business development incentive" includes assistance by way of grant, loan, loan guarantee, the purchase or guarantee of bonds, debentures, notes or other debt obligations, and the purchase or other acquisition of any common or preferred shares or other equity securities;

and

(b) striking out clause (c).

2 Clause 8(1)(c) of Chapter 20, as amended by Chapter 57 of the Acts of 2012, is further amended by striking out "render financial assistance or" in the first and second lines and substituting "provide business development incentives or render".

3 Subsection 9(1) of Chapter 20, as amended by Chapter 27 of the Acts of 2008 and Chapter 57 of the Acts of 2012, is further amended by adding "and Treasury Board" immediately after "Finance" in the second line.

4 Section 10 of Chapter 20 is amended by

(a) adding "and Treasury Board" immediately after "Finance" in the second line; and

(b) striking out "Consolidated" in the third line and substituting "General Revenue".

5 Section 11 of Chapter 20 is amended by striking out "Acount" in the second last line and substituting "Account".

6 Section 12 of Chapter 20 is amended by adding "and Treasury Board" immediately after "Finance" in the third line.

7 Section 14A of Chapter 20, as enacted by Chapter 57 of the Acts of 2012, is amended by striking out "thirtieth day of September, 2013" in the first and second lines and substituting "first day of March, 2015".

8 Subsection 14D(1) of Chapter 20, as enacted by Chapter 57 of the Acts of 2012, is amended by striking out "within six months after the end of the 2017-18 fiscal year" in the first and second lines and substituting "no later than the thirtieth day of September, 2019".

9 Chapter 20 is further amended by adding immediately after Section 15 the following Section:

15A (1) No later than the thirtieth day of June, 2019, and every five years thereafter, the Corporation shall cause a review of its activities and operation to assess the benefits it delivers in support of the achievement of the economic goals of the Province.

(2) Subject to the approval of the Minister, the Corporation shall appoint an independent person to conduct the review.

(3) The person conducting the review shall explicitly recommend whether the Corporation, and each of the activities reviewed, should

(a) continue to operate in the same manner;

(b) be made to operate differently; or

10 Subsection 16(1) of Chapter 20, as amended by Chapter 57 of the Acts of 2012, is further amended by

(a) striking out "financial assistance" in the second line of clause (a) and substituting "business development incentives";

(b) striking out "financial assistance" in the second line of clause (b) and substituting "business development incentives";

(c) striking out "financial assistance" in the third line of clause (d) and substituting "business development incentives";

(d) striking out "financial assistance" in the first and second lines of clause (e) and substituting "business development incentives";

(e) striking out "financial assistance" in the first and second lines of subclause (f)(i) and substituting "business development incentives";

(f) striking out "financial assistance" in the second line of subclause (f)(ii) and substituting "business development incentives";

(g) striking out "financial assistance" in the second line of clause (i) and substituting "business development incentives";

(h) striking out "financial assistance" in the second line of clause (j) and substituting "business development incentives";

(i) striking out "financial assistance has" in the second line of clause (k) and substituting "business development incentives have";

(j) striking out "financial assistance" in the second line of clause (l) and substituting "business development incentives"; and

(k) striking out "financial assistance has" in the fourth line of clause (m) and substituting "business development incentives have".

INCOME TAX ACT

11 Clause 41(3)(b) of Chapter 217 of the Revised Statutes, 1989, the Income Tax Act, as enacted by Chapter 4 of the Acts of 2000, is amended by striking out "Act (Canada)" in the last line.

12 (1) Clause 47(2A)(c) of Chapter 217, as enacted by Chapter 6 of the Acts of 2005 and amended by Chapter 2 of the Acts of 2006, is further amended by striking out "2016" in the second line and substituting "2021".

(2) Subsection 47(2B) of Chapter 217, as enacted by Chapter 8 of the Acts of 2011, is amended by

(a) striking out "2016" in the second line of clause (a) and substituting "2021";

(b) striking out "2016" in third line of subclause (b)(i) and substituting "2021"; and

(3) Clause 47(3)(b) of Chapter 217, as enacted by Chapter 4 of the Acts of 2000, is amended by striking out "Act (Canada)" in the last line.

13 (1) Subsection 47A(2) of Chapter 217, as enacted by Chapter 9 of the Acts of 2007 and amended by Chapter 2 of the Acts of 2008, is further amended by

(a) striking out "2013" in the second line of subclause (a)(ii) and substituting "2021,";

(b) striking out "2013" in the second line of subclause (a)(iv) and substituting "2021";

(d) striking out "2013" in the second line of subclause (b)(iv) and substituting "2021".

(2) Subsection 47A(6) of Chapter 217, as enacted by Chapter 9 of the Acts of 2007, is amended by striking out "2013" in the fourth line and substituting "2021".

(3) Clause 47A(7)(b) of Chapter 217, as enacted by Chapter 9 of the Acts of 2007, is amended by striking out "Act (Canada)" in the last line.

14 Chapter 217 is further amended by adding immediately after Section 49 the following heading and Section:

Subdivision k - Capital Investment Tax Credit

(a) "approved project" means a project, as defined by the regulations, that satisfies the conditions prescribed by the regulations;

(b) "eligible corporation" means a corporation, as defined by the regulations, that satisfies the conditions prescribed by the regulations;

(c) "government assistance" means government assistance, as defined in subsection 127(9) of the Federal Act, other than a tax credit that may be deducted or claimed pursuant to this Section;

(d) "qualified property", in respect of an eligible corporation, means property acquired by the eligible corporation after December 31, 2014, and before January 1, 2025, to be used in the Province, that is qualified property as defined in subsection 127(9) of the Federal Act.

(2) Where, in respect of a taxation year, a corporation has been issued a tax-credit certificate pursuant to subsection (6), the corporation may deduct from tax otherwise payable in the taxation year the amount specified in the tax-credit certificate.

(3) The amount by which the tax credit referred to in subsection (2) exceeds the corporation's tax payable for the taxation year calculated without reference to this Section may be applied by the Minister to

(a) any tax, interest or penalty owing by the corporation for that or any prior taxation year pursuant to this Act, the income statute of any agreeing province or the Federal Act;

(b) any contribution, penalty or interest owing by the corporation for that or any prior taxation year as a result of payments required from the corporation pursuant to the Canada Pension Plan;

(c) any premium, interest or penalty owing by the corporation for that or any prior taxation year pursuant to the Employment Insurance Act (Canada),

and the part of the amount not so applied shall be paid to the corporation.

(4) A corporation that has claimed and is eligible for a tax credit under this Section for a taxation year is deemed to have paid, at the time referred to in paragraph 157(1)(b) of the Federal Act, as that paragraph relates to that taxation year, the amount of the credit on account of its tax payable under this Act.

(5) To be eligible to deduct or claim an amount pursuant to this Section for a taxation year, a corporation shall apply, in the manner prescribed by the regulations, to the Minister of Finance and Treasury Board of the Province, or a person designated by the Minister of Finance and Treasury Board of the Province, to be issued a tax-credit certificate pursuant to subsection (6).

(6) Where the Minister of Finance and Treasury Board of the Province, or the person designated by the Minister of Finance and Treasury Board of the Province, is satisfied that

(a) the corporation that has applied for a tax-credit certificate pursuant to subsection (5) is an eligible corporation for the taxation year in respect of which the application was made;

(b) each project in respect of which the application was made pursuant to subsection (5) is an approved project; and

a tax-credit certificate shall be issued to the corporation for the taxation year, specifying in respect of each approved project the amount, calculated in accordance with subsection (7), of the corporation's tax credit pursuant to this Section.

(7) The amount of a corporation's tax credit, which must be specified in a tax-credit certificate issued pursuant to subsection (6), is equal to 15% of the aggregate of all amounts each of which is the amount by which the capital cost of qualified property acquired by the corporation, in the taxation year, in respect of an approved project exceeds the aggregate of all amounts each of which is an amount of government assistance that may reasonably be considered to relate directly to the acquisition of the qualified property.

(8) A corporation is not entitled to deduct or claim an amount pursuant to this Section for a taxation year unless the tax-credit certificate issued under subsection (6) is

(a) filed with the corporation's return for the taxation year; or

(b) where the return is filed electronically, held by the corporation and filed with the Minister upon request.

(9) The Minister of Finance and Treasury Board of the Province may revoke a tax-credit certificate issued pursuant to subsection (6) if any information provided by the corporation to obtain the certificate is false or misleading or fails to disclose a material fact.

(10) A certificate revoked pursuant to subsection (9) is void ab initio.

(11) Where the Minister of Finance and Treasury Board of the Province determines that any amount paid or applied pursuant to this Section did not qualify as a tax credit of the corporation to which it was paid or for the benefit of which it was applied, that amount is recoverable from the corporation and is a debt due by the corporation to Her Majesty in right of the Province.

(12) The Minister of Finance and Treasury Board of the Province, or a person designated by the Minister of Finance and Treasury Board of the Province, shall conduct a review of the tax credit established by this Section on or after December 31, 2018, and prepare a written report of the results of the review no later than December 31, 2019.

(13) The Minister of Finance and Treasury Board of the Province shall table the report referred to in subsection (12) in the Assembly if the Assembly is then sitting or, where the Assembly is not then sitting, file the report with the Clerk of the Assembly.

(14) The Governor in Council may make regulations

(a) governing any matter that may be prescribed pursuant to this Section;

(b) requiring a corporation to supply information or documents respecting any matter required in assessing eligibility and compliance with this Section;

(d) defining any word or expression used but not defined in this Section;

(e) respecting any matter or thing the Governor in Council considers necessary or advisable to effectively carry out the intent and purpose of this Section.

(15) A regulation made pursuant to this Section may be made retroactive to a date not earlier than January 1, 2015.

INNOVATION CORPORATION ACT

15 Section 2 of Chapter 5 of the Acts of 1994-95, the Innovation Corporation Act, is amended by

(a) adding immediately after clause (a) the following clause:

(aa) "business development incentive" means assistance by way of grant, loan, loan guarantee, the purchase or guarantee of bonds, debentures, notes or other debt obligations or the purchase or other acquisition of any common or preferred shares or other equity securities;

(b) striking out clause (c); and

(e) "Minister" means the Minister of Economic and Rural Development and Tourism;

16 (1) Clause 6(1)(d) of Chapter 5 is amended by striking out "render such financial assistance" in the first and second lines and substituting "provide such business development incentives".

(2) Subsection 6(3) of Chapter 5 is amended by

(a) adding "and Treasury Board" immediately after "Finance" in the sixth line of clause (h); and

(b) striking out "or" the second time it appears in the third line of clause (i) and substituting "of".

17 Chapter 5 is further amended by adding immediately after Section 6 the following Section:

6A (1) Where required to do so by the Minister, the Corporation shall accept, on such terms and conditions as the Minister may prescribe, the transfer of any security that was owned by Nova Scotia Business Incorporated immediately before the transfer.

(2) Where required to do so by the Minister, the Corporation shall accept, on such terms and conditions as the Minister may prescribe, the assignment of the rights and obligations under any agreement that Nova Scotia Business Incorporated has entered into with a third party for the purpose of investing venture capital in the third party.

(3) Where the rights and obligations under an agreement are assigned pursuant to subsection (2),

(a) the assignment may be carried out notwithstanding any restriction on assignment provided for under the agreement being assigned;

(b) the assignment is not subject to any notice requirement under the agreement being assigned or otherwise existing at law;

(c) the assignment need not be in writing, notwithstanding any requirement prescribed by the agreement being assigned or otherwise existing at law;

(d) no person has or may maintain any cause of action or claim against Her Majesty in right of the Province, the Minister, Nova Scotia Business Incorporated or the Corporation arising from or in relation to the assignment; and

(e) the Corporation may enforce the agreement in the same manner as if it were Nova Scotia Business Incorporated.

18 Subclause 12(2)(b)(ii) of Chapter 5 is amended by

(a) adding "and Treasury Board" immediately after "Finance" in the third line;

(b) striking out "that Minister" in the fourth line and substituting "the Deputy Minister of Finance and Treasury Board"; and

(c) striking out "the Nova Scotia Economic Renewal Agency" in the second last and last lines and substituting "Economic and Rural Development and Tourism or a person designated by the Deputy Minister of Economic and Rural Development and Tourism".

19 Chapter 5 is further amended by adding immediately after Section 13 the following Section:

13A Section 44A of the Civil Service Act applies mutatis mutandis to the members of the Board.

20 Subsection 19(2) of Chapter 5 is amended by adding "and Treasury Board" immediately after "Finance" in the third line.

21 Chapter 5 is further amended by adding immediately after Section 21 the following Sections:

21A The Corporation shall, no later than March 1, 2015, prepare and submit to the Minister for approval a five-year strategic plan, including estimates of budgetary requirements, for the operation of the Corporation.

21B (1) The Corporation shall, no later than September 30, 2019, and every five years thereafter, prepare and submit to the Minister a detailed evaluation of its activities compared against the previous five-year strategic plan, including any recommendations for modifications to the mandate of the Corporation.

(2) In addition to the evaluation referred to in subsection (1), the Corporation shall, within the same time periods referred to in subsection (1), submit to the Minister for approval a five-year strategic plan for the continued operation of the Corporation.

21C (1) No later than June 30, 2019, and every five years thereafter, the Corporation shall cause a review of its activities and operation to assess the benefits it delivers in support of the achievement of the economic goals of the Province.

(2) Subject to the approval of the Minister, the Corporation shall appoint an independent person to conduct the review.

(3) The person conducting the review shall explicitly recommend whether the Corporation, and each of the activities reviewed, should

(a) continue to operate in the same manner;

(b) be made to operate differently; or

22 Subsection 26(1) of Chapter 5 is amended by