265. (1) For the purposes of this Part, where on a particular day a person becomes a bankrupt,

(a) the trustee in bankruptcy is deemed to supply a service to the bankrupt of acting as trustee in bankruptcy and any amount to which the trustee is entitled for acting in that capacity is deemed to be consideration payable for that supply, but in every other respect, the trustee in bankruptcy is deemed to be the agent of the bankrupt and any supply made or received and any act performed by the trustee in the administration of the estate of the bankrupt or in the carrying on of any business of the bankrupt is deemed to have been made, received or performed, as the case may be, by the trustee as agent of the bankrupt;

(b) the estate of the bankrupt shall be deemed not to be a trust or an estate;

(c) the property and money of the person immediately before the particular day shall be deemed not to pass to and be vested in the trustee in bankruptcy on the bankruptcy order being made or the assignment in bankruptcy being filed but to remain vested in the bankrupt;

(d) the trustee in bankruptcy, and not the person, is liable for the payment or remittance of all amounts (other than amounts that relate solely to activities in which the person begins to engage on or after the particular day and to which the bankruptcy does not relate) that become payable or remittable by the person under this Part during the period beginning on the day immediately after the day the trustee became the trustee in bankruptcy of the person and ending on the day the discharge of the trustee is granted under the Bankruptcy and Insolvency Act, except that

(i) the trustee is liable for the payment or remittance of amounts that became payable or remittable by the person after the particular day in respect of periods that ended on or before the particular day, or of amounts that became payable or remittable by the person after the particular day in respect of supplies of real property made to the person on or before the particular day, only to the extent of the property and money of the person in possession of the trustee available to satisfy the liability,

(ii) the trustee is not liable for the payment or remittance of any amount for which a receiver (within the meaning assigned by subsection 266(1)) is liable under section 266, and

(iii) the payment or remittance by the person of an amount in respect of the liability shall discharge the liability of the trustee to the extent of that amount;

(e) where, on the particular day the person is registered under Subdivision d of Division V, the registration continues in relation to the activities of the person to which the bankruptcy relates as though the trustee in bankruptcy were the registrant in respect of those activities and ceases to apply to the activities of the person in which the person begins to engage on or after the particular day and to which the bankruptcy does not relate;

(f) where, on or after the particular day the person begins to engage in particular activities to which the bankruptcy does not relate, the particular activities shall be deemed to be separate from the activities of the person to which the bankruptcy relates as though the particular activities were activities of a separate person, and the person may

(i) apply for, and be granted, registration under Subdivision d of Division V, and

(ii) establish fiscal periods and establish and make elections respecting reporting periods,

in relation to the particular activities as though they were the only activities of the person;

(g) the reporting periods of the person begin and end on the days on which they would have begun and ended if the bankruptcy had not occurred, except that

(i) the reporting period of the person during which the person becomes a bankrupt shall end on the particular day and a new reporting period of the person in relation to the activities of the person to which the bankruptcy relates shall begin on the day immediately after the particular day, and

(ii) the reporting period of the person, in relation to the activities of the person to which the bankruptcy relates, during which the trustee in bankruptcy is discharged under the Bankruptcy and Insolvency Act shall end on the day the discharge is granted;

(h) subject to paragraph (j), the trustee in bankruptcy shall file with the Minister in prescribed form containing prescribed information all returns in respect of

(i) the activities of the person to which the bankruptcy relates for, or

(ii) supplies of real property to which the bankruptcy relates and that are made to the person in,

reporting periods of the person ending in the period beginning on the day immediately after the particular day and ending on the day the discharge of the trustee is granted under the Bankruptcy and Insolvency Act and that are required under this Part to be filed by the person, as if those activities were the only activities of the person;

(i) subject to paragraph (j), if the person has not on or before the particular day filed a return required under this Part to be filed by the person for, or in respect of a supply of real property made to the person in, a reporting period of the person ending

(i) on or before the particular day, and

(ii) in, or immediately before, the fiscal year of the person that included the particular day,

the trustee in bankruptcy shall, unless the Minister waives in writing the requirement for the trustee to file the return, file with the Minister in prescribed form containing prescribed information a return for that reporting period of the person or in respect of that supply, as the case may be;

(j) where there is a receiver (within the meaning assigned by subsection 266(1)) with authority in respect of a business, a property, affairs or assets of the person, the trustee in bankruptcy is not required

(i) to include in any return any information that the receiver is required under section 266 to include in a return, or

(ii) to file a return in respect of any supply of real property made to the person in respect of which the receiver is required under section 266 to file a return; and

(k) the property and money held by the trustee in bankruptcy for the person on the day an order of absolute discharge of the person is granted under the Bankruptcy and Insolvency Act shall be deemed not to pass to the person on the order being granted but to have been held by and vested in the person continuously since the day it was acquired by the person or the trustee, as the case may be.

(2) In this section, “bankrupt” and “estate of the bankrupt” have the same meanings as in the Bankruptcy and Insolvency Act.

1990, c. 45, s. 12; 1992, c. 27, s. 90; 1993, c. 27, s. 121; 1997, c. 10, s. 72; 2004, c. 25, s. 199.

266. (1) In this section,

“business” includes a part of a business;

“receiver” means a person who

(a) under the authority of a debenture, bond or other debt security, of a court order or of an Act of Parliament or of the legislature of a province, is empowered to operate or manage a business or a property of another person,

(b) is appointed by a trustee under a trust deed in respect of a debt security to exercise the authority of the trustee to manage or operate a business or a property of the debtor under the debt security,

(c) is appointed by a bank to act as agent of the bank in the exercise of the authority of the bank under subsection 426(3) of the Bank Act in respect of property of another person,

(d) is appointed as a liquidator to liquidate the assets of a corporation or to wind up the affairs of a corporation, or

(e) is appointed as a committee, guardian or curator with authority to manage and care for the affairs and assets of an individual who is incapable of managing those affairs and assets,

and includes a person who is appointed to exercise the authority of a creditor under a debenture, bond or other debt security to operate or manage a business or a property of another person but, where a person is appointed to exercise the authority of a creditor under a debenture, bond or other debt security to operate or manage a business or a property of another person, does not include that creditor;

“relevant assets” of a receiver means

(a) where the receiver’s authority relates to all the properties, businesses, affairs and assets of a person, all those properties, businesses, affairs and assets, and

(b) where the receiver’s authority relates to only part of the properties, businesses, affairs or assets of a person, that part of the properties, businesses, affairs or assets, as the case may be.

(2) For the purposes of this Part, where on a particular day a receiver is vested with authority to manage, operate, liquidate, or wind up any business or property, or to manage and care for the affairs and assets, of a person,

(a) the receiver shall be deemed to be an agent of the person and any supply made or received and any act performed by the receiver in respect of the relevant assets of the receiver shall be deemed to have been made, received or performed, as the case may be, by the receiver as agent on behalf of the person;

(b) the receiver shall be deemed not to be a trustee of the estate of the person or any part of the estate of the person;

(c) where the relevant assets of the receiver are a part and not all of the person’s businesses, properties, affairs or assets, the relevant assets of the receiver shall be deemed to be, throughout the period during which the receiver is acting as receiver of the person, separate from the remainder of the businesses, properties, affairs or assets of the person as though the relevant assets were businesses, properties, affairs or assets, as the case may be, of a separate person;

(d) the person and the receiver are jointly and severally liable for the payment or remittance of all amounts that become payable or remittable by the person under this Part before or during the period during which the receiver is acting as receiver of the person to the extent that the amounts can reasonably be considered to relate to the relevant assets of the receiver or to the businesses, properties, affairs or assets of the person that would have been the relevant assets of the receiver if the receiver had been acting as receiver of the person at the time the amounts became payable or remittable, as the case may be, except that

(i) the receiver is liable for the payment or remittance of amounts that became payable or remittable before that period only to the extent of the property and money of the person in possession or under the control and management of the receiver after

(A) satisfying the claims of creditors whose claims ranked, on the particular day, in priority to the claim of the Crown in respect of the amounts, and

(B) paying any amounts that the receiver is required to pay to a trustee in bankruptcy of the person,

(ii) the person is not liable for the remittance of any tax collected or collectible by the receiver, and

(iii) the payment or remittance by the person or the receiver of an amount in respect of the liability shall discharge the joint liability to the extent of that amount;

(e) the reporting periods of the person begin and end on the days on which they would have begun and ended if the vesting had not occurred, except that

(i) the reporting period of the person, in relation to the relevant assets of the receiver, during which the receiver begins to act as receiver of the person, shall end on the particular day and a new reporting period of the person in relation to the relevant assets shall begin on the day immediately after the particular day, and

(ii) the reporting period of the person, in relation to the relevant assets, during which the receiver ceases to act as receiver of the person, shall end on the day the receiver ceases to act as receiver of the person;

(f) the receiver shall file with the Minister in prescribed form containing prescribed information all returns in respect of the relevant assets of the receiver for, or in respect of supplies of real property that can reasonably be considered to relate to the relevant assets and that were made to the person in, reporting periods ending in the period during which the receiver is acting as receiver and that are required under this Part to be made by the person, as if the relevant assets were the only properties, businesses, affairs and assets of the person;

(g) if the person has not on or before the particular day filed a return required under this Part to be filed by the person for a reporting period of the person ending

(i) on or before the particular day, and

(ii) in, or immediately before, the fiscal year of the person that included the particular day,

the receiver shall, unless the Minister waives in writing the requirement for the receiver to file the return, file with the Minister in prescribed form containing prescribed information a return for that reporting period that relates to the businesses, properties, affairs or assets of the person that would have been the relevant assets of the receiver if the receiver had been acting as receiver of the person during that reporting period; and

(h) if the person has not on or before the particular day filed a return required under this Part to be filed by the person in respect of a supply of real property made to the person in a reporting period of the person ending

(i) on or before the particular day, and

(ii) in, or immediately before, the fiscal year of the person that included the particular day,

and that can reasonably be considered to relate to the businesses, properties, affairs or assets of the person that would have been the relevant assets of the receiver if the receiver had been acting as receiver of the person during that reporting period, the receiver shall, unless the Minister waives in writing the requirement for the receiver to file the return, file with the Minister in prescribed form containing prescribed information a return in respect of the supply.

1990, c. 45, s. 12; 1993, c. 27, s. 122.

267. Subject to sections 267.1, 269 and 270, if an individual dies, this Part (other than section 279) applies as though the estate of the individual were the individual and the individual had not died, except that

(a) the reporting period of the individual during which the individual died ends on the day the individual died; and

(b) a reporting period of the estate begins on the day after the individual died and ends on the day the reporting period of the individual would have ended if the individual had not died.

1990, c. 45, s. 12; 1997, c. 10, s. 73; 2000, c. 30, s. 81.

267.1 (1) The definitions in this subsection apply in this section and in sections 268 to 270.

“trust” includes the estate of a deceased individual.

“trustee” includes the personal representative of a deceased individual, but does not include a receiver (within the meaning assigned by subsection 266(1)).

(2) Subject to subsection (3), each trustee of a trust is liable to satisfy every obligation imposed on the trust under this Part, whether the obligation was imposed during or before the period during which the trustee acts as trustee of the trust, but the satisfaction of an obligation of a trust by one of the trustees of the trust discharges the liability of all other trustees of the trust to satisfy that obligation.

(3) A trustee of a trust is jointly and severally liable with the trust and each of the other trustees, if any, for the payment or remittance of all amounts that become payable or remittable by the trust under this Part before or during the period during which the trustee acts as trustee of the trust except that

(a) the trustee is liable for the payment or remittance of amounts that became payable or remittable before the period only to the extent of the property and money of the trust under the control of the trustee; and

(b) the payment or remittance by the trust or the trustee of an amount in respect of the liability discharges the joint liability to the extent of that amount.

(4) The Minister may, in writing, waive the requirement for the personal representative of a deceased individual to file a return for a reporting period of the individual ending on or before the day the individual died.

(5) For the purposes of this Part, where a person acts as trustee of a trust,

(a) anything done by the person in the person’s capacity as trustee of the trust is deemed to have been done by the trust and not by the person; and

(b) notwithstanding paragraph (a), where the person is not an officer of the trust, the person is deemed to supply a service to the trust of acting as a trustee of the trust and any amount to which the person is entitled for acting in that capacity that is included in computing, for the purposes of the Income Tax Act, the person’s income or, where the person is an individual, the person’s income from a business, is deemed to be consideration for that supply.

1997, c. 10, s. 73.

268. For the purposes of this Part, where a person settles property on an inter vivos trust,

(a) the person is deemed to have made and the trust is deemed to have received a supply by way of sale of the property; and

(b) the supply is deemed to have been made for consideration equal to the amount determined under the Income Tax Act to be the proceeds of disposition of the property.

1990, c. 45, s. 12; 1997, c. 10, s. 73.

269. For the purposes of this Part, where a trustee of a trust distributes property of the trust to one or more persons, the distribution of the property is deemed to be a supply of the property made by the trust at the place at which the property is delivered or made available to the persons and for consideration equal to the amount determined under the Income Tax Act to be the proceeds of disposition of the property.

1990, c. 45, s. 12; 1997, c. 10, ss. 73, 231.

270. (1) In this section,

“receiver” means a person who is a receiver within the meaning assigned by subsection 266(1);

“representative” means

(a) a person, other than a trustee in bankruptcy or a receiver, who is administering, winding up, controlling or otherwise dealing with any property, business, commercial activity or estate of a registrant, and

(b) a trustee of a trust that is a registrant.

(2) Every receiver shall, before distributing to any person any property or money under the control of the receiver in the receiver’s capacity as receiver, obtain a certificate from the Minister certifying that all amounts that are, or can reasonably be expected to become, payable or remittable under this Part by the receiver in that capacity in respect of the reporting period during which the distribution is made, or any previous reporting period, have been paid or that security for the payment or remittance of the amounts has, in accordance with this Part, been accepted by the Minister.

(3) Every representative of a registrant shall, before distributing to any person any property or money under the control of the representative in the representative’s capacity as the representative, obtain a certificate from the Minister certifying that

(a) all amounts that are payable or remittable by the registrant under this Part in respect of the reporting period during which the distribution is made, or any previous reporting period, and

(b) all amounts that are, or can reasonably be expected to become, payable or remittable under this Part by the representative in that capacity in respect of the reporting period during which the distribution is made, or any previous reporting period,

have been paid or that security for the payment or remittance of the amounts has, in accordance with this Part, been accepted by the Minister.

(4) Any

(a) receiver who distributes property or money without obtaining a certificate as required by subsection (2) in respect of the amounts referred to in that subsection, or

(b) representative who distributes property or money without obtaining a certificate as required by subsection (3) in respect of the amounts referred to in that subsection

is personally liable for the payment or remittance of those amounts to the extent of the value of the property or money so distributed.

1990, c. 45, s. 12; 1993, c. 27, s. 123; 1997, c. 10, s. 74.

271. Where two or more corporations (each of which is referred to in this section as a “predecessor”) are merged or amalgamated to form one corporation (in this section referred to as the “new corporation”), otherwise than as the result of the acquisition of property of one corporation by another corporation pursuant to the purchase of the property by the other corporation or as the result of the distribution of the property to the other corporation on the winding-up of the corporation,

(a) except as otherwise provided in this Part, the new corporation shall, for the purposes of this Part, be deemed to be a separate person from each of the predecessors;

(b) for the purposes of applying the provisions of this Part in respect of property or a service acquired, imported or brought into a participating province by a predecessor, for the purposes of sections 231 and 249, and for prescribed purposes, the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor; and

(c) for the purposes of this Part, the transfer of any property by a predecessor to the new corporation as a consequence of the merger or amalgamation shall be deemed not to be a supply.

1990, c. 45, s. 12; 1997, c. 10, s. 255.

272. Where at any time a particular corporation is wound up and not less than 90% of the issued shares of each class of the capital stock of the particular corporation were, immediately before that time, owned by another corporation,

(a) for the purposes of applying the provisions of this Part in respect of property or a service acquired, imported or brought into a participating province by the other corporation as a consequence of the winding-up, for the purposes of sections 231 and 249, and for prescribed purposes, the other corporation shall be deemed to be the same corporation as, and a continuation of, the particular corporation; and

(b) for the purposes of this Part, the transfer of any property to the other corporation as a consequence of the winding-up shall be deemed not to be a supply.

1990, c. 45, s. 12; 1997, c. 10, s. 255.

272.1 (1) For the purposes of this Part, anything done by a person as a member of a partnership is deemed to have been done by the partnership in the course of the partnership’s activities and not to have been done by the person.

(2) Notwithstanding subsection (1), where property or a service is acquired or imported by a member of a partnership for consumption, use or supply in the course of activities of the partnership but not on the account of the partnership, the following rules apply:

(a) except as otherwise provided in subsection 175(1), the partnership is deemed

(i) not to have acquired or imported the property or service, and

(ii) where the property was brought by the member from a non-participating province into a participating province, not to have so brought it into that province;

(b) where the member is not an individual, for the purpose of determining an input tax credit or rebate of the member in respect of the property or service and, in the case of property that is acquired or imported for use as capital property of the member, applying Subdivision d of Division II in relation to the property, subsection (1) does not apply to deem the member not to have acquired or imported the property or service and the member is deemed to be engaged in those activities of the partnership; and

(c) where the member is not an individual and the partnership at any time pays an amount to the member as a reimbursement and is entitled to claim an input tax credit in respect of the property or service in circumstances in which subsection 175(1) applies, any input tax credit in respect of the property or service that the member would, but for this paragraph, be entitled to claim in a return of the member that is filed with the Minister after that time shall be reduced by the amount of the input tax credit that the partnership is entitled to claim.

(3) Where a person who is or agrees to become a member of a partnership supplies property or a service to the partnership otherwise than in the course of the partnership’s activities

(a) where the property or service is acquired by the partnership for consumption, use or supply exclusively in the course of commercial activities of the partnership, any amount that the partnership agrees to pay to or credit the person in respect of the property or service is deemed to be consideration for the supply that becomes due at the time the amount is paid or credited; and

(b) in any other case, the supply is deemed to have been made for consideration that becomes due at the time the supply is made equal to the fair market value at that time of the property or service acquired by the partnership determined as if the person were not a member of the partnership and were dealing at arm’s length with the partnership.

(4) Where a partnership disposes of property of the partnership

(a) to a person who, at the time the disposition is agreed to or otherwise arranged, is or has agreed to become a member of the partnership, or

(b) to a person as a consequence of that person ceasing to be a member of the partnership,

the following rules apply:

(c) the partnership is deemed to have made to the person, and the person is deemed to have received from the partnership, a supply of the property for consideration that becomes due at the time the property is disposed of equal to the total fair market value of the property (including the fair market value of the person’s interest in the property) immediately before the time the property is disposed of, and

(d) subsection 172(2) does not apply in respect of the supply.

(5) A partnership and each member or former member (each of which is referred to in this subsection as the “member”) of the partnership (other than a member who is a limited partner and is not a general partner) are jointly and severally liable for

(a) the payment or remittance of all amounts that become payable or remittable by the partnership under this Part before or during the period during which the member is a member of the partnership or, where the member was a member of the partnership at the time the partnership was dissolved, after the dissolution of the partnership, except that

(i) the member is liable for the payment or remittance of amounts that become payable or remittable before the period only to the extent of the property and money that is regarded as property or money of the partnership under the relevant laws of general application in force in a province relating to partnerships, and

(ii) the payment or remittance by the partnership or by any member thereof of an amount in respect of the liability discharges the joint liability to the extent of that amount; and

(b) all other obligations under this Part that arose before or during that period for which the partnership is liable or, where the member was a member of the partnership at the time the partnership was dissolved, the obligations that arose upon or as a consequence of the dissolution.

(6) Where a partnership would, but for this subsection, be regarded as having ceased to exist, the partnership is deemed for the purposes of this Part not to have ceased to exist until the registration of the partnership is cancelled.

(7) Where

(a) a partnership (in this subsection referred to as the “predecessor partnership”) would, but for this section, be regarded as having ceased at any time to exist,

(b) a majority of the members of the predecessor partnership that together had, at or immediately before that time, more than a 50% interest in the capital of the predecessor partnership become members of another partnership of which they comprise more than half of the members, and

(c) the members of the predecessor partnership who become members of the other partnership transfer to the other partnership all or substantially all of the property distributed to them in settlement of their capital interests in the predecessor partnership,

except where the other partnership is registered or applies for registration under section 240, the other partnership is deemed to be a continuation of and the same person as the predecessor partnership.

1997, c. 10, ss. 76, 232.

273. (1) Where a registrant (in this section referred to as the “operator”) is a participant in a joint venture (other than a partnership) under an agreement, evidenced in writing, with another person (in this section referred to as the “co-venturer”) for the exploration or exploitation of mineral deposits or for a prescribed activity, and the operator and the co-venturer jointly make an election under this subsection,

(a) all properties and services that are, during the period the election is in effect, supplied, acquired, imported or brought into a participating province under the agreement by the operator on behalf of the co-venturer in the course of the activities for which the agreement was entered into shall, for the purposes of this Part, be deemed to be supplied, acquired, imported or brought into the province, as the case may be, by the operator and not by the co-venturer;

(b) section 177 does not apply in respect of a supply referred to in paragraph (a); and

(c) all supplies of property or services made, during the period the election is in effect, under the agreement by the operator to the co-venturer shall, for the purposes of this Part, be deemed not to be supplies to the extent that the property or services are, but for this section, acquired by the co-venturer for consumption, use or supply in the course of commercial activities for which the agreement was entered into.

(1.1) Paragraph (1)(a) does not apply to the acquisition, importation or bringing into a participating province of property or a service by an operator on behalf of a co-venturer where the property or service is so acquired, imported or brought into the province for consumption, use or supply in the course of activities that are not commercial activities and the operator

(a) is a government other than a specified Crown agent; or

(b) would not be required, because of an Act of Parliament other than this Act, to pay tax in respect of the acquisition, importation or bringing into the province of the property or service if the operator acquired or, imported the property or service or brought it into the province for that purpose otherwise than on behalf of the co-venturer.

(2) For the purposes of this section, where a particular person has made an election under this section with respect to a joint venture and at any time during the period the election is in effect another person becomes a participant in the venture by acquiring an interest in it from the particular person, the other person shall be deemed to have made, at that time, an election under this section in accordance with subsection (4) with respect to the venture jointly with the operator of the venture.

(3) An operator and a co-venturer who have jointly made an election under this section may jointly revoke the election.

(4) An election or revocation under this section made jointly by an operator and a co-venturer is not a valid election or revocation unless it is made in prescribed form containing prescribed information and specifies the effective date of the election or revocation.

(5) Where a registrant and another person make, or purport to make, an election under subsection (1) in respect of an agreement between the registrant and the person, the registrant and the other person are jointly and severally liable for all obligations under this Part that result from the activities for which the agreement was entered into and that are or would be, but for this section, engaged in by the registrant on behalf of the other person.

(6) Where an operator who is a participant in a joint venture (other than a partnership) under an agreement referred to in subsection (1) entered into before 1991 with a co-venturer files a return for the operator’s first reporting period beginning after 1990 in which all properties and services supplied, acquired or imported by the operator on behalf of the co-venturer in the course of the activities for which the agreement was entered into are reported as having been supplied, acquired or imported, as the case may be, by the operator and not by the co-venturer, the operator shall be deemed to have made jointly with the co-venturer an election under this section in accordance with subsection (4).

(7) Subsection (6) applies as between an operator and a co-venturer, in respect of an agreement, only where

(a) the operator sends a notice in writing to the co-venturer not later than December 31, 1990 of the operator’s intention to file a return for the operator’s first reporting period beginning after 1990 reporting on the basis provided in subsection (6) with respect to all property and services supplied, acquired or imported by the operator on behalf of the co-venturer in the course of the activities for which the agreement was entered into; and

(b) the co-venturer has not, on or before the day that is the earlier of February 1, 1991 and the day that is 30 days after receipt of the notice from the operator, advised the operator in writing that all property and services supplied, acquired or imported by the operator on the co-venturer’s behalf in the course of the activities for which the agreement was entered into are not to be treated as having been supplied, acquired or imported by the operator.

1990, c. 45, s. 12; 1993, c. 27, s. 124; 1997, c. 10, s. 233.

273.1 (1) The definitions in this subsection apply in this section.

“added property” that is in the possession of a person means tangible personal property (other than property that serves as evidence of the payment of postage) or software that the person incorporates into, attaches to, combines or assembles with, or uses to pack, other property that is not property of the person held otherwise than for sale by the person.

“base value” of property that a particular person imports or obtains physical possession of in Canada from another person means

(a) if the particular person imports the property, the value that is or would be, but for subsection 215(2), deemed under subsection 215(1) to be the value of the property for the purposes of Division III; and

(b) in any other case, the fair market value of the property at the time the particular person obtains physical possession of it in Canada.

“basic service” means any of the following services performed at any time in respect of goods, to the extent that, if the goods were held in a bonded warehouse at that time, it would be feasible, given the stage of processing of the goods at that time, to perform that service in the bonded warehouse and it would be permissible to do so according to the Customs Bonded Warehouses Regulations:

(a) disassembling or reassembling, if the goods have been assembled or disassembled for packing, handling or transportation purposes;

(b) displaying;

(c) inspecting;

(d) labelling;

(e) packing;

(f) removing, for the sole purpose of soliciting orders for goods or services, a small quantity of material, or a portion, a piece or an individual object, that represents the goods;

(g) storing;

(h) testing; or

(i) any of the following that do not materially alter the characteristics of the goods:

(i) cleaning,

(ii) complying with any applicable law of Canada or of a province,

(iii) diluting,

(iv) normal maintenance and servicing,

(v) preserving,

(vi) separating defective goods from prime quality goods,

(vii) sorting or grading, and

(viii) trimming, filing, slitting or cutting.

“bonded warehouse” has the meaning assigned by subsection 2(1) of the Customs Act.

“customer’s good”, in respect of a particular person, means tangible personal property of another person that the particular person imports, or obtains physical possession of in Canada, for the purpose of supplying a service or added property in respect of the tangible personal property.

“domestic inventory” of a person means tangible personal property that the person acquires in Canada, or acquires outside Canada and imports, for the purpose of selling the property separately for consideration in the ordinary course of a business carried on by the person.

“export revenue” of a particular person for a fiscal year means the total of all amounts each of which is consideration, included in determining the specified total revenue of the person for the year, for

(a) a supply by way of sale of an item of domestic inventory of the person that is made outside Canada or included in Part V of Schedule VI (other than sections 2.1, 3, 11, 14 and 15.1 of that Part);

(b) a supply by way of sale of added property acquired by the person for the purpose of processing in Canada particular property where the particular property, or all the products resulting from that processing, as the case may be, are exported, after that processing is complete, without being consumed, used, transformed or further processed, manufactured or produced in Canada by another person except to the extent reasonably necessary or incidental to the transportation of the particular property or those products; or

(c) a supply of a service of processing, storing or distributing tangible personal property of another person if the property, or all the products resulting from that processing, as the case may be, are exported, after the processing in Canada, if any, by the particular person is complete, without being consumed, used, transformed or further processed, manufactured or produced in Canada by any person other than the particular person except to the extent reasonably necessary or incidental to the transportation of that property or those products.

“export revenue percentage” of a person for a year means the proportion (expressed as a percentage) that the person’s export revenue for the year is of the person’s specified total revenue for the year.

“finished inventory” of a person means property of the person (other than capital property) that is in the state at which it is intended to be sold by the person, or to be used by the person as added property, in the course of a business carried on by the person.

“labelling” includes marking, tagging and ticketing.

“packing” includes unpacking, repacking, packaging and repackaging.

“processing” includes adjusting, altering, assembling and any basic service.

“specified total revenue” of a person for a fiscal year of the person means the total of all amounts each of which is consideration, included in determining the income from a business of the person for the year, for a supply made by the person (or that would be made by the person but for any provision of this Part that deems the supply to be made by another person), other than

(a) a supply of a service in respect of property that the person neither imports nor obtains physical possession of in Canada for the purpose of providing the service;

(b) a supply by way of sale of particular property that the person acquires for the purpose of selling the particular property (or selling other property to which the particular property has been added or with which the particular property has been combined) for consideration but that is neither acquired in Canada nor imported by the person;

(c) a supply by way of sale of added property that the person acquires for the purpose of processing tangible personal property that the person neither imports nor obtains physical possession of in Canada; and

(d) a supply by way of sale of capital property of the person.

“substantial alteration of property” by a person, in respect of a fiscal year of the person, means

(a) manufacturing or producing, or engaging another person to manufacture or produce, property (other than capital property of the person) at any time in the year in the course of a business carried on by the person; or

(b) any processing undertaken by or for the person during the year to bring property of the person to a state at which the property or the product of that processing is finished inventory of the person, if

(i) the person’s percentage value added attributable to non-basic services in respect of finished inventory of the person for the year exceeds 10%, and

(ii) the person’s percentage total value added in respect of finished inventory of the person for the year exceeds 20%.

(2) A person’s percentage value added attributable to non-basic services in respect of finished inventory of the person for a fiscal year of the person is the amount (expressed as a percentage) determined by the formula

A/B

where

A is the total of all amounts each of which

(a) is part of the total cost to the person of all property that was finished inventory of the person supplied, or used as added property, by the person during the year, and

(b) is reasonably attributable to

(i) salary, wages or other remuneration paid or payable to employees of the person, excluding any amounts that are reasonably attributable to the performance of basic services, or

(ii) consideration paid or payable by the person to engage other persons to perform processing, excluding any portion of such consideration that is reasonably attributed by the other persons to tangible personal property supplied in connection with that processing or that is reasonably attributable to the performance of basic services, and

B is the total cost to the person of the property.

(3) The percentage total value added in respect of finished inventory of a person for a fiscal year of the person is the amount (expressed as a percentage) that would be determined for the year by the formula in subsection (2) if the total for A in that subsection did not exclude any amounts that are reasonably attributable to the performance of basic services.

(4) A person’s percentage value added attributable to non-basic services in respect of customers’ goods for a fiscal year of the person is the amount (expressed as a percentage) determined by the formula

A/(A + B)

where

A is the total of all consideration, included in determining the income from a business of the person for the year, for supplies of services, or of added property, in respect of customers’ goods, other than the portion of such consideration that is reasonably attributable to the performance of basic services or to the provision of added property used in the performance of basic services, and

B is the total of the base values of the customers’ goods.

(5) A person’s percentage total value added in respect of customers’ goods for a fiscal year of the person is the percentage that would be determined for the year by the formula in subsection (4) if the total for A in that subsection did not exclude any amounts that are reasonably attributable to the performance of basic services or the provision of added property used in the performance of basic services.

(6) For the purpose of determining a particular person’s export revenue percentage or an amount under any of subsections (2) to (5) in respect of finished inventory of a particular person or customers’ goods in respect of a particular person, if a supply between the particular person and another person with whom the particular person is not dealing at arm’s length is made for no consideration or for less than fair market value and any consideration for the supply would be included in determining the income from a business of the particular person for a year, the supply is deemed to have been made for consideration equal to fair market value and that consideration is deemed to be included in determining that income.

(7) The Minister may, on the application of a person who is registered under Subdivision d of Division V and who is engaged exclusively in commercial activities, authorize the person to use, beginning on a particular day in a fiscal year of the person and subject to such conditions as the Minister may from time to time specify, a certificate (in this section referred to as an “export distribution centre certificate”) for the purposes of section 1.2 of Part V of Schedule VI and section 11 of Schedule VII, if it can reasonably be expected that

(a) the person will not engage in the substantial alteration of property in the year;

(b) either the person’s percentage value added attributable to non-basic services in respect of customers’ goods for the year will not exceed 10% or the person’s percentage total value added in respect of customers’ goods for the year will not exceed 20%; and

(c) the person’s export revenue percentage for the year will be at least 90%.

(8) An application for an authorization to use an export distribution centre certificate shall be made in prescribed form containing prescribed information and be filed with the Minister in prescribed manner.

(9) If the Minister authorizes a person to use an export distribution centre certificate, the Minister shall notify the person in writing of the authorization, its effective date and its expiry date and the number assigned by the Minister that identifies the person or the authorization and that must be disclosed by the person when providing the certificate for the purpose of section 1.2 of Part V of Schedule VI or when accounting for imported goods in accordance with section 11 of Schedule VII.

(10) The Minister may, after giving a person to whom an authorization has been granted under subsection (7) reasonable written notice, revoke the authorization, effective on a day in a particular fiscal year of the person, if

(a) the person fails to comply with any condition attached to the authorization or with any provision of this Part;

(b) it can reasonably be expected that

(i) one or both of the conditions described in paragraphs (7)(a) and (b) would not be met if the fiscal year referred to in those paragraphs were the particular fiscal year, or

(ii) the person’s export revenue percentage for the particular fiscal year will be less than 80%; or

(c) the person has requested in writing that the authorization be revoked as of that day.

(11) Subject to subsection (10), an authorization granted to a person under subsection (7) is deemed to have been revoked, effective immediately after a fiscal year of the person, if

(a) the person had engaged in the substantial alteration of property in that year;

(b) the person’s percentage value added attributable to non-basic services in respect of customers’ goods for the year exceeds 10% and the person’s percentage total value added in respect of customers’ goods for the year exceeds 20%; or

(c) the person’s export revenue percentage for the year is less than 80%.

(12) An authorization granted under subsection (7) to a person ceases to have effect immediately before the earlier of

(a) the day on which a revocation of the authorization becomes effective, and

(b) the day that is three years after the day on which the authorization became effective.

(13) If an authorization granted to a person under subsection (7) is revoked, effective on a particular day, the Minister shall not grant to the person another authorization under that subsection that becomes effective before

(a) if the authorization was revoked in circumstances described in paragraph (10)(a), the day that is two years after the particular day; and

(b) in any other case, the first day of the second fiscal year of the person beginning after the particular day.

2001, c. 15, s. 19.