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- News Release 2002-049 - 

Statement of Assessed Mutual Fund Trust Provincial Capital Gains Refunds for the 1997 to 1999 Tax Years

To the Minister of Finance of Canada

I have audited the Statement of Assessed Mutual Fund Trust Provincial Capital Gains Refunds for the 1997 to 1999 Tax Years prepared in accordance with the accounting policies described in note 3 to the statement which are derived from relevant provisions of the tax collection agreements described in note 1. This statement is the responsibility of management of the Canada Customs and Revenue Agency. My responsibility is to express an opinion on this statement based on my audit.

I conducted my audit in accordance with Canadian generally accepted auditing standards. Those

standards require that I plan and perform an audit to obtain reasonable assurance whether the financial information is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial information. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial information.

In my opinion, this statement presents fairly, in all material respects, assessed mutual fund trust provincial capital gains refunds for the 1997 to 1999 tax years in accordance with the accounting policies referred to above which are derived from relevant provisions of the tax collection agreements described in note 1.

Sheila Fraser, FCA
Auditor General of Canada

Ottawa, Canada
May 31, 2002

Statement of Assessed Mutual Fund Trust Provincial Capital Gains Refunds For the 1997 to 1999 Tax Years

(Previously not included in the Statements of Income and Capital Taxes Payable to the Provinces and Territories)

The accompanying notes form an integral part of this statement

Approved by:

Commissioner
Canada Customs and Revenue Agency

Notes to the Statement of Assessed Mutual Fund Trust Provincial Capital Gains Refunds for the 1997 to 1999 Tax Years

1. Tax collection agreements

The Federal-Provincial Fiscal Arrangements Act empowers the federal Minister of Finance to conclude, with the approval of the Governor in Council, tax collection agreements with provinces and territories that impose individual and corporation taxes. The tax collection agreements into which the Minister has entered provide, subject to certain restrictions, that the Government of Canada, as agent of the provinces and territories, will assess, on their behalf, the taxes imposed under their provincial and territorial acts and remit amounts in respect thereof in accordance with the agreements.

2. Statement of Income and Capital Taxes Payable to the Provinces and Territories

Upon the closing of a tax year, a Statement of Income and Capital Taxes Payable to the Provinces and Territories is prepared by the Department of Finance using assessed tax information from the Federal / Provincial Tax Sharing Statements prepared by the Canada Customs and Revenue Agency (CCRA). Due to the omission of amounts representing the provincial portion of capital gains refunds earned by mutual fund trusts from the Federal / Provincial Tax Sharing Statements, these omitted amounts have also not been included in previously issued Statements of Income and Capital Taxes Payable to the Provinces and Territories.

3. Summary of significant accounting policies

(a) Statement content

This statement reflects the provincial portions of assessed Mutual Fund Trust Capital Gains Refunds not previously included in the Statement of Income and Capital Taxes Payable to the Provinces and Territories for the 1997 to 1999 tax years prepared on a basis generally consistent with that used in the Statement of Income and Capital Taxes Payable to the Provinces and Territories.

The amounts shown for a given tax year represent amounts assessed in the immediately following calendar year regardless of the tax year involved.

(b) Assessment criteria

Under the provisions of the tax collection agreements, the provinces and territories accept as final and binding all assessments, decisions and other steps made or taken by the Minister of National Revenue and officials of the Canada Customs and

Revenue Agency under the provincial and territorial acts in pursuance of these agreements.

The Canadian Income Tax System is a self-assessment system where Canadians are expected to understand the tax laws and comply with them. When assessing a taxpayer’s return, the Canada Customs and Revenue Agency uses certain provisions of the Income Tax Act and Regulations as well as other internally developed criteria which are generally less exacting than the Income Tax Act and Regulations.

- News Release 2002-049 -