Section 77 Exemption Regulations

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Section 77 Exemption Regulations

made under Section 81 of the

Finance Act

S.N.S. 2010, c. 2

O.I.C. 2012-255 (August 7, 2012), N.S. Reg. 154/2012

as amended to O.I.C. 2015-297 (September 8, 2015), N.S. Reg. 320/2015



Citation

1     These regulations may be cited as the Section 77 Exemption Regulations.

 

Interpretation                            

2     In these regulations,

 

“Act” means the Finance Act;

 

“affiliate” has the same meaning as in Section 2 of the NSBI Regulations;

 

“capital lease” means a lease of a tangible capital asset as defined in the public sector accounting standards established by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants;

 

“environment” means the components of the earth, and includes all of the following:

 

                         (i)     air, land and water,

 

                         (ii)    the layers of the atmosphere,

 

                         (iii)   organic and inorganic matter and living organisms,

 

                         (iv)   the interacting natural systems that include components referred to in subclauses (i) to (iii);

 

“financial assistance” includes assistance by way of loan, loan guarantee, the purchase or guarantee of any bonds, debentures, notes or other debt obligations, and the purchase or other acquisition of any common or preference shares or other equity securities;

 

“indemnity” means a binding obligation by which a member of the Government Reporting Entity agrees to pay any pecuniary damage suffered by the indemnitee as a result of loss or damage arising from some responsibility assumed by that member, but does not include:

 

                         (i)     an indemnity concerning pollution or contamination of the environment, or

 

                         (ii)    an indemnity concerning the quality or condition of land or title to land;

 

“non-monetary transaction” means a net debt obligation in which property other than money is exchanged for consideration substantially other than money;

 

“NSBI Regulations” means the Business Development Incentive[s] Regulations made under the Nova Scotia Business Incorporated Act;

Definition of “NSBI Regulations” amended: O.I.C. 2015-297, N.S. Reg. 320/2015.

 

“Nova Scotia Fund” has the same meaning as in the Nova Scotia Business Incorporated Act;

 

“operating lease” means a lease of a non-financial asset, other than a capital lease;

 

“tangible capital asset” has the same meaning as in the public sector accounting standards established by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants;

 

“TCA threshold” means the appropriate cost threshold for a tangible capital asset, as set out in the Budgeting and Financial Management Manual 200 published by the Treasury Board Office, as amended.


Exempt net debt obligations

3     The following net debt obligations are exempt from Section 77 of the Act:

 

                (a)    an agreement to acquire a tangible capital asset, if the acquisition has been approved by Treasury Board and remains within the dollar limit authorized by Treasury Board, except for an agreement

 

                         (i)     that is a capital lease, or

 

                         (ii)    to acquire a tangible capital asset through a non-monetary transaction;

 

                (b)    an indemnity to which either of the following applies:

 

                         (i)     the indemnity is provided by a member of the Government Reporting Entity to the federal government, an agency of the federal government or a body acting on behalf of the federal government in relation to a grant of funds to the Province;

 

                         (ii)    the minister responsible is of the opinion that the indemnity is being incurred in the ordinary course of business and does not represent a new or increased level of risk for the Government Reporting Entity;

 

                (c)    a net debt obligation, other than financial assistance described in clause (d), that creates a total financial liability, including financial liability related to any amendment, supplement or extension of or any obligation directly or indirectly related to the net debt obligation, that does not exceed, in aggregate, $100 000.00;


                (d)    financial assistance, and any amendment, variation or alteration of any terms and conditions governing the financial assistance, that is authorized from the strategic investment funds defined in the NSBI Regulations and that does not require the consent of the Governor in Council under the NSBI Regulations;

Clause 3(d) amended: O.I.C. 2015-297, N.S. Reg. 320/2015.

 

                (e)    financial assistance from the Nova Scotia Fund in the form of a guarantee, and any amendment, variation or alteration of any terms and conditions governing the guarantee, but only if the financial assistance from the Nova Scotia Fund does not require the consent of the Governor in Council under the NSBI Regulations;

Clause 3(e) amended: O.I.C. 2015-297, N.S. Reg. 320/2015.

 

                (f)    despite the definition of indemnity in Section 2, an environmental indemnity related to a sale by Harbourside Commercial Park Inc., of land that was purchased by Harbourside Commercial Park Inc. from Sydney Steel Corporation, but only if all of the following conditions are met:

 

                         (i)     remediation work has been completed on the land to the industrial standard for Harbourside Commercial Park,

 

                         (ii)    in the agreement that contains the indemnity, the purchaser agrees to use the land in a manner consistent with the remediation work performed on the land,

 

                         (iii)   in the agreement that contains the indemnity, the purchaser agrees to the restrictive covenants that apply to Harbourside Commercial Park,

 

                         (iv)   the indemnity in favour of the purchaser relates only to contamination that is not disclosed in the site condition report with respect to the land provided to the purchaser in connection with the land purchase, and the indemnity is conditional on subclauses (ii) and (iii);

 

                (g)    an indemnity provided by the Province in respect of the exercise by the Attorney General and Minister of Justice of the Minister’s powers and duties as set out in the Public Service Act;

 

                (h)    an indemnity, undertaking, bond, surety or other form of security that

 

                         (i)     is required by a court or the rules of court as a condition of obtaining a remedy or other relief in intended or existing litigation for or against the Crown or any public department, and

 

                         (ii)    in the opinion of the Attorney General, is reasonably necessary to protect, preserve or promote the interests of the Crown or any public department in the intended or existing proceeding;

 

                (i)     economic development incentives from the Invest Nova Scotia Fund made under the Invest Nova Scotia Board Act.

Clause 3(i) added: O.I.C. 2015-297, N.S. Reg. 320/2015.


Anti-avoidance

4     For the purpose of determining total financial liability in clause 3(c), a series of related transactions must be aggregated.


Reporting

5     (1)    A member of the Government Reporting Entity that exercises an exemption set out in clause 3(b) or 3(c) must report annually to the Minister for each fiscal year, in form and substance satisfactory to the Minister, a summary of all instances in which the exemption has been exercised.

 

       (2)    For each fiscal year, the report referred to in subsection (1) must be submitted by April 30 of the immediately following fiscal year.

 


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