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Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1In this Act

“active business” means a business carried on in Canada, other than a specified investment business or a personal services business as defined in the federal Act; (entreprise exploitée activement)

“association” means an association as defined in the Co-operative Associations Act;(association)

“auditor” means a person appointed under subsection 31(1); (vérificateur)

“community economic development plan” means a plan submitted to the Minister by a corporation or an association as part of the application for registration under subsection 13.1(1); (plan de développement économique communautaire)

“defined community” means a group of persons situated within the Province that may be reasonably distinguished by common geographic, economic or cultural characteristics; (communauté définie)

“eligible business” means a corporation registered under section 7 or a corporation or association registered under section 13.2; (entreprise admissible)

“eligible investor” means(investisseur admissible)

(a) an individual who is a natural person at least 19 years of age and to whom section 11 of the New Brunswick Income Tax Act applies,

(b) a corporation to which section 12 of the New Brunswick Income Tax Act applies, or

(c) a trust, other than a qualifying trust, to which section 11 or 42 of the New Brunswick Income Tax Act applies;

“eligible share” means(action admissible)

(a) in the case of a corporation that is registered under section 7 or 13.2, a newly issued share of the capital stock of the corporation if the share is issued as part of a specified issue, but does not include a replacement share, and

(b) in the case of an association that is registered under section 13.2, a newly issued share issued as part of a specified issue that is not eligible for a tax credit allowed pursuant to the federal Act or a deduction from income pursuant to that Act other than a deduction pursuant to subsection 146(5) of that Act and that, if the share was the only share owned by the member, would entitle a member to vote in the affairs of the association, but does not include a replacement share;

“federal Act” means the Income Tax Act (Canada); (Loi fédérale)

“individual” Repealed: 2014, c.20, s.1

“inspector” means a person appointed under subsection 31(2); (inspecteur)

“Minister” means the Minister of Finance, and includes any person designated by the Minister to act on the Minister’s behalf; (Ministre)

“qualifying trust” means a qualifying trust as defined in section 127.4 of the federal Act; (fiducie admissible)

“replacement share” means(action de remplacement)

(a) a share issued as part of a specified issue where the purchaser has, at any time after December 10, 2002, disposed of a share of any class of shares of a corporation that is registered under section 7, or

(b) a share issued as part of a specified issue where the purchaser has, at any time after February 4, 2014, disposed of a share of any class of shares of a corporation or association that is registered under section 13.2;

“specified issue” means an issue of shares by a corporation registered under section 7 or a corporation or association registered under section 13.2.(émission déterminée)

2007, c.49, s.1; 2014, c.20, s.1; 2014, c.45, s.1

Associated corporations

2For the purposes of paragraphs 6(1)(c), 10(e), 13(g) and (h), 13.1(1)(b) and 13.5(f), one corporation or association is associated with another corporation or association if it is associated with the other corporation or association within the meaning of section 256 of the federal Act, except that the relevant time for determining the association shall be at the time the corporation is registered under section 7 or the corporation or association is registered under section 13.2 rather than the taxation year of the corporation or association.

2014, c.20, s.2; 2014, c.45, s.2

Exclusion from eligible share

3Notwithstanding any other provision of this Act, an eligible share does not include a share that, in the opinion of the Minister, is or will be issued as a result of a transaction or event or a series of transactions or events the main purpose of which is to claim the tax credit under this Act.

Shares of qualifying trust deemed to be those of eligible investor

2014, c.20, s.3

4For the purposes of paragraph 11(d), subparagraph 11(e)(iii) and subsections 14(1) and (4), an eligible investor who is an individual shall be deemed to have purchased, held or disposed of shares that are purchased, held or disposed of by a qualifying trust for that investor.

2014, c.20, s.4

ADMINISTRATION OF ACT

Administration of Act

5The Minister is responsible for the administration of this Act and may designate one or more persons to act on the Minister’s behalf.

REGISTRATION OF CORPORATIONS OTHER THAN COMMUNITY ECONOMIC DEVELOPMENT CORPORATIONS

2014, c.45, s.3

Application for registration

6(1)A corporation that intends to make a specified issue of shares and that meets the criteria set out in section 10 may apply for registration under section 7 by delivering to the Minister, in a form provided by the Minister, an application including the following:

(a) a certified copy of the instrument of incorporation;

(b) a copy of the corporation’s investment plan;

(c) a copy of the most recent financial statements of the corporation and its associated corporations, which have been reviewed by a person who is a licensed or registered member of an accounting association that is regulated under a private Act of the Province;

(d) a certificate in writing signed by all the directors of the corporation certifying that the information contained in the application is complete and accurate; and

(e) such other information that the Minister may require in order to ensure compliance with this Act and the regulations.

6(2)An application for registration shall be accompanied by the application fee prescribed by regulation, which is non-refundable.

2009, c.14, s.1; 2014, c.45, s.4

Requirements for registration

7(1)Subject to subsection (2) and upon payment of the application fee referred to in subsection 6(2), the Minister may register a corporation under this section, with such conditions that the Minister considers appropriate,

(a) if the corporation satisfies the Minister that

(i) the corporation meets the criteria set out in section 10,

(ii) the proposed investment plan complies with the spirit and intent of this Act and the regulations, and

(iii) the corporation meets any other conditions for registration that are prescribed by regulation, and

(b) if the Minister is of the opinion that the proposed use of the capital to be raised by the specified issue, as set out in the investment plan, will benefit the operations of the corporation that are located in New Brunswick.

7(2)The Minister shall not register a corporation under this section unless the Minister is satisfied that

(a) the corporation will raise immediately after registration, or within such period of time as is permitted by the Minister, capital on the issue of eligible shares as part of a specified issue as set out in the investment plan in an amount that is not less than an amount prescribed by regulation and not greater than an amount or aggregate amount prescribed by regulation,

(b) the corporation will issue immediately after registration, or within such period of time as is permitted by the Minister, eligible shares as part of a specified issue as set out in the investment plan to all eligible investors named in the investment plan, and

(c) the amounts that will be deductible or deducted under section 61.1 of the New Brunswick Income Tax Act during a particular year by all eligible investors will not exceed the amount prescribed by regulation.

2009, c.14, s.2; 2014, c.20, s.5; 2014, c.45, s.5

Certificate of registration

8(1)Where the Minister registers a corporation under section 7, the Minister shall issue a certificate of registration and the corporation shall be deemed to be registered as of the date on the certificate of registration.

8(2)The certificate of registration constitutes approval, as at the date of registration, for the corporation to raise the amount of capital referred to in the investment plan through the sale of eligible shares in respect of which the Minister may issue tax credit certificates under this Act.

2014, c.45, s.6

Condition of registration

9It is a condition of registration under section 7 that the corporation shall pay, in respect of each of the 4 years after the date of each certificate of registration issued to the corporation under subsection 8(1), at least the percentage prescribed by regulation of its wages and salaries to individuals who are residents of New Brunswick.

2014, c.45, s.7

Criteria for eligibility

10The following are the criteria referred to in section 6 for eligibility of a corporation for registration:

(a) the corporation is a private company that meets the requirements prescribed by regulation;

(b) the corporation is incorporated under the laws of, or registered to carry on business in, the Province;

(c) the corporation has authorized capital consisting of shares without par value;

(d) the corporation is not engaged in a business prescribed by regulation;

(e) the total assets of the corporation, including the assets of its associated corporations, do not exceed $40,000,000, calculated in the manner prescribed by regulation, at the time of registration under this Act;

(f) the corporation is not substantially engaged in any activities that may be prescribed by regulation as ineligible;

(g) all or substantially all of the fair market value of the assets of the corporation is attributable to

(i) assets used in an active business, or

(ii) shares of another corporation where all or substantially all of the fair market value of the assets of that corporation is attributable to assets used in an active business; and

(h) the corporation meets all other criteria that may be prescribed by regulation.

2004, c.S-5.5, s.227; 2007, c.49, s.2; 2009, c.14, s.3

Investment plan

11An investment plan of a corporation applying for registration under section 6 and every investment plan of a corporation registered under this Act shall contain or make provision for the following:

(a) the name of the corporation;

(b) the amount of capital to be raised under the plan;

(c) the names in full of the directors and officers of the corporation and the residential address of each;

(d) with respect to eligible investors who have agreed to purchase eligible shares of the specified issue, whether directly or through a qualifying trust, and who shall be not fewer than the number prescribed by regulation,

(i) for each eligible investor who is an individual, the full name, social insurance number and residential address of the eligible investor,

(i.1) for each eligible investor that is a corporation, the name, business number and head office address of the eligible investor,

(i.2) for each eligible investor that is a trust, the name, account number and residence address of the eligible investor,

(ii) the number of shares subscribed for and the amount to be paid by each eligible investor which amount shall be not less than the amount prescribed by regulation,

(iii) the number of shares of the corporation held at any time by each eligible investor, and

(iv) a statement signed by each eligible investor certifying that the information in subparagraphs (i), (ii) and (iii) with respect to the eligible investor is accurate;

(e) that shares to be issued as part of a specified issue under the plan

(i) will only be issued by the corporation on being fully paid for,

(ii) will include the rights to receive dividends declared by the corporation and to participate in the distribution of the remaining property of the corporation on dissolution,

(iii) will, immediately following their issue, be registered in the name of each shareholder that purchases them or in the name of a trustee, if the shares are purchased by a qualifying trust, and

(iv) do not have any rights or restrictions prohibited by regulation;

(f) that the corporation shall not redeem an eligible share in respect of which a tax credit certificate is issued under this Act unless the redemption occurs more than 4 years after the date on which the eligible share was issued, or the redemption occurs in such circumstances and meets such conditions as are prescribed by regulation;

(g) that the corporation shall not register a transfer by the original purchaser or by a registered retirement savings plan or a registered retirement income fund under which the original purchaser or the original purchaser’s spouse is the annuitant, of an eligible share in respect of which a tax credit certificate has been issued under this Act unless the transfer occurs more than 4 years after the date on which the eligible share was issued, or the transfer occurs in such circumstances and meets such conditions as are prescribed by regulation;

(h) that the corporation is prohibited from lending money, guaranteeing a loan or providing other financial assistance to any person for the purpose of or in connection with a purchase of eligible shares that are part of a specified issue;

(i) an investment confirmation, to be issued to each eligible investor who invests in the corporation within 30 days after the investment having been made, setting out such information as may be prescribed by regulation;

(j) the proposed use of the capital to be raised by the specified issue;

(k) a summary of the major business activities and revenue sources of the corporation; and

(l) such other requirements as may be prescribed by regulation.

2007, c.49, s.3; 2014, c.20, s.6

Endorsement of eligible shares

12Where a corporation registered under this Act issues holders of its eligible shares certificates of that class of shares, the corporation shall put the following endorsement on the certificates: “The right to redeem or transfer this class of shares is subject to the provisions of the Small Business Investor Tax Credit Act”.

Prohibited use of funds

13A corporation registered under this Act shall not use the funds raised by its specified issue in respect of which a tax credit certificate has been or may be issued under this Act for

(a) lending,

(b) acquiring or purchasing the shares of any other person,

(c) investment outside the Province,

(d) investment in land, except land that is incidental and ancillary to the active business in which the corporation is primarily engaged,

(e) funding all or part of the purchase of any services or assets at a price that is greater than the fair market value of the services or assets purchased,

(f) purchasing services or assets provided by Her Majesty in right of the Province or an agency or corporation of Her Majesty, where

(i) those services or assets are to be used in all or in part in a business or activity that is the same or similar to the activity previously carried on by Her Majesty in right of the Province or the agency or corporation of Her Majesty, and

(ii) the corporation has received, either directly or indirectly, any financial assistance from any government, municipality, rural community or public authority with respect to the acquisition of those services or assets,

(g) the redemption or purchase of previously issued shares of the corporation or an associated corporation,

(h) the retirement of any part of a liability of a shareholder of the corporation or an associated corporation,

(i) the payment of dividends,

(j) the funding of all or part of the purchase by the corporation of all or substantially all of the assets of an existing proprietorship, partnership, joint venture, trust or company, except a proprietorship, partnership, joint venture, trust or company that is in receivership or in bankruptcy where an eligible investor or group of investors did not own at any time more than 10% of the voting shares of the proprietorship, partnership, joint venture, trust or company that is in receivership or in bankruptcy, or

(k) other purposes prescribed by regulation.

2005, c.7, s.77; 2014, c.20, s.7

REGISTRATION OF COMMUNITY ECONOMIC DEVELOPMENT CORPORATIONS OR ASSOCIATIONS

2014, c.45, s.8

Application for registration

2014, c.45, s.8

13.1(1)A corporation or association that intends to make a specified issue of shares and that meets the criteria set out in section 13.5 may apply for registration under section 13.2 by delivering to the Minister an application, in a form acceptable to the Minister, that includes the following:

(a) a copy of the constitution of the corporation or the association;

(b) a copy of the most recent financial statements of the corporation or the association, and of its associated corporations or associated associations, which have been prepared or reviewed by a person who is a licensed or registered member of an accounting association that is regulated under a private Act of the Province;

(c) a copy of the community economic development plan, containing the information prescribed by regulation;

(d) a certificate in writing signed by all the directors of the corporation or association certifying that the information contained in the application is complete and accurate;

(e) any information prescribed by regulation; and

(f) any other information that the Minister may require in order to ensure compliance with this Act and the regulations.

13.1(2)An application for registration shall be accompanied by the application fee prescribed by regulation, which is non-refundable.

2014, c.45, s.8

Requirements for registration

2014, c.45, s.8

13.2(1)Subject to subsection (2) and on payment of the application fee referred to in subsection 13.1(2), the Minister may register a corporation or association under this section, with such conditions that the Minister considers appropriate,

(a) if the corporation or association satisfies the Minister that

(i) the corporation or association meets the criteria set out in section 13.5,

(ii) the proposed community economic development plan complies with the spirit and intent of this Act and the regulations,

(iii) the constitution of the corporation provides that no individual is a specified shareholder of the corporation as that term is defined by section 248 of the federal Act and as if the reference to 10% in that definition were read as a reference to 20%,

(iv) the specified issue complies with the provisions of the Securities Act or any part of that Act that may be prescribed by regulation, and

(v) the corporation or association meets any other conditions for registration that are prescribed by regulation, and

(b) if the Minister is of the opinion that the proposed use of the capital to be raised by the specified issue, as set out in the community economic development plan, will benefit the operations of the corporations or associations that are located in New Brunswick.

13.2(2)The Minister shall not register a corporation or association under subsection (1) unless the Minister is satisfied that

(a) the corporation or association will raise immediately after registration, or within such period of time as is permitted by the Minister, capital on the issue of eligible shares as part of a specified issue as set out in the community economic development plan in an amount that is not less than an amount prescribed by regulation and not greater than an amount or aggregate amount prescribed by regulation,

(b) the corporation or association will issue immediately after registration, or within such period of time as is permitted by the Minister, eligible shares as part of a specified issue as set out in the community economic development plan to all eligible investors named in the plan, and

(c) the amounts that will be deductible or deducted under section 61.1 of the New Brunswick Income Tax Act during a particular year by all individuals will not exceed the amount prescribed by regulation.

2014, c.45, s.8

Certificate of registration

2014, c.45, s.8

13.3(1)Where the Minister registers a corporation or association under section 13.2, the Minister shall issue a certificate of registration and the corporation or association shall be deemed to be registered as of the date on the certificate of registration.

13.3(2)The certificate of registration constitutes approval, as at the date of registration, for the corporation or association to raise the amount of capital referred to in the community economic development plan through the sale of eligible shares in respect of which the Minister may issue tax credit certificates under this Act.

2014, c.45, s.8

Condition of registration

2014, c.45, s.8

13.4It is a condition of registration under section 13.2 that the corporation or association shall pay, in respect of each of the four years after the date of each certificate of registration issued to the corporation or association under subsection 13.3(1), at least the percentage prescribed by regulation of its wages and salaries to individuals who are residents of New Brunswick.

2014, c.45, s.8

Criteria for eligibility

2014, c.45, s.8

13.5The following are the criteria referred to in section 13.1 for eligibility of a corporation or association for registration:

(a) the corporation or association is incorporated under the laws of, or registered to carry on business in, the Province;

(b) the corporation or association has a constitution that

(i) restricts the business of the corporation or association to

(A) operating or carrying on business that is an active business or to evaluating and making investments in one or more active businesses based on a set of criteria defined by the corporation or association,

(B) providing information to and educating investors in the defined community as to the role of capital in business, the value of equity investments to the defined community and the rights and obligations of corporations and shareholders,

(C) investing the capital raised by a specified issue in respect of which a tax credit certificate has been or may be issued under this Act, in businesses located within the defined community as outlined in the community economic development plan and that meet the criteria prescribed by regulation, if any,

(D) exercising ownership rights with respect to the investments made by the corporation or association, and

(E) providing the administrative support necessary to carry on the business of the corporation or association, including preparation of annual reports and the holding of meetings of shareholders and the Board of Directors;

(ii) describes the defined community for which the corporation or association was formed;

(iii) makes provisions for annual general meetings of the shareholders;

(c) the corporation or association has a Board of Directors, elected by the shareholders at a general meeting of the shareholders, consisting of not less than six individuals who are residents of the community in which the corporation or association carries on business;

(d) the corporation or association is not a non-profit, charitable or non-taxable corporation or association;

(e) in the case of a corporation, the corporation has authorized capital consisting of at least one class of voting equity shares without par value;

(f) the total assets of the corporation or association, and its associated corporations and associated associations, do not exceed $40,000,000, calculated in the manner prescribed by regulation, at the time of registration under section 13.2;

(g) in the case of a corporation, all or substantially all of the fair market value of the assets of the corporation is attributable to

(i) assets used in an active business, or

(ii) shares of another corporation where all or substantially all of the fair market value of the assets of that corporation is attributable to assets of that corporation used in an active business or that the other corporation has a constitution that restricts the corporation from operating or carrying on business that is an active business or to evaluating and making investments in one or more active businesses based on a set of criteria defined by the corporation;

(h) the corporation or association does not carry on business or operations in any activity prescribed by regulation or has a constitution that restricts the corporation or association to investing in investments of another corporation or another association that does not carry on business or operations in an activity prescribed by regulation; and

(i) the corporation or association meets all other criteria that may be prescribed by regulation.

2014, c.45, s.8

Investment requirements

2014, c.45, s.8

13.6(1)A corporation or association registered under section 13.2 shall meet the investment requirements prescribed by regulation.

13.6(2)The Minister may extend, with or without conditions, the time limit for meeting the investment requirements prescribed by regulation and may grant the extension even though the time limit to be extended has expired.

13.6(3)The Minister may impose a penalty on a corporation or association registered under section 13.2 that fails to meet the investment requirements prescribed by regulation.

2014, c.45, s.8

Application of sections 12 and 13 and sections 14 to 38

2014, c.45, s.8

13.7Sections 12 and 13 and sections 14 to 38 apply with the necessary modifications to a corporation or association registered under section 13.2.

2014, c.45, s.8

SMALL BUSINESS
INVESTOR TAX CREDIT

Application for tax credit certificate

14(1)If an eligible investor is an individual who has paid, or whose qualifying trust has paid, during the calendar year or within 60 days following the calendar year, for eligible shares issued by a corporation registered under this Act as part of its specified issue, the corporation shall apply to the Minister on behalf of the eligible investor for a tax credit certificate in respect of a tax credit to be claimed by the eligible investor under section 61.1 of the New Brunswick Income Tax Act.

14(1.1)If an eligible investor is a corporation or a trust that has paid during the taxation year for eligible shares issued by a corporation registered under this Act as part of its specified issue, the corporation registered under this Act shall apply to the Minister on behalf of the eligible investor for a tax credit certificate in respect of a tax credit to be claimed by the eligible investor under section 61.1 of the New Brunswick Income Tax Act.

14(2)An application made under subsection (1) or (1.1) shall be made in a form provided by the Minister and shall be signed by the secretary and one authorized officer of the corporation that has issued the eligible shares in respect of which the tax credit certificate is sought, and shall be accompanied by the application fee prescribed by regulation and all additional material that may be required by the regulations.

14(3)An application under subsection (1) or (1.1) shall be made within the time prescribed by regulation.

14(3.1)The application fee is non-refundable.

14(4)If an eligible investor is an individual, the amount of the tax credit referred to in subsection (1) that may be claimed each year by the eligible investor is equal to 50% of all amounts not exceeding $250,000 paid during the time period referred to in subsection (1) by the eligible investor or by a qualifying trust of the eligible investor to a corporation registered under this Act in consideration for eligible shares issued by the corporation as part of its specified issue.

14(5)If an eligible investor is a corporation or a trust, the amount of the tax credit referred to in subsection (1.1) that may be claimed each taxation year by the eligible investor is equal to 15% of all amounts not exceeding $500,000 paid during the taxation year referred to in subsection (1.1) by the eligible investor to a corporation registered under this Act in consideration for eligible shares issued by the corporation registered under this Act as part of its specified issue.

2007, c.49, s.4; 2009, c.14, s.4; 2014, c.20, s.8; 2015, c.26, s.1

Prohibition regarding eligible investors

2014, c.20, s.9

14.1(1)The following definitions apply in this section.

“affiliate” , if used to indicate a relationship between corporations, means any corporation when one is the subsidiary of the other, or both are subsidiaries of the same corporation or(affilié)

(a) each of them is controlled by the same person or the same group of persons, or

(b) one of them is controlled by one person and the other is controlled by

(i) a spouse, parent, grandparent, child, grandchild, brother or sister of that person, or

(ii) a parent, grandparent, child, grandchild, brother or sister of the spouse of that person, residing in the same residence.

“associate” , if used to indicate a relationship with an eligible investor that is a corporation or a trust, means(associé)

(a) a corporation of which the eligible investor owns, directly or indirectly, shares carrying 10% or more of the outstanding voting rights for the election of the directors of the corporation,

(b) a partner of the eligible investor,

(c) a participant in a joint venture with the eligible investor, or

(d) a trust or estate

(i) in which the eligible investor has, in the opinion of the administrator, a substantial beneficial interest, or

(ii) for which the eligible investor serves as trustee or in a similar capacity.

14.1(2)If an eligible investor is a corporation or a trust, the eligible investor shall not make or hold an investment in a corporation registered under this Act if the eligible investor, either alone or in conjunction with one or more of the following persons, will own, directly or indirectly, shares carrying 50% or more of the votes for the election of the directors of the corporation registered under this Act or will, in any manner, control the corporation registered under this Act:

(a) associates or affiliates of the eligible investor;

(b) shareholders of the eligible investor or their associates or affiliates;

(c) directors of the eligible investor or their associates; or

(d) officers of the eligible investor or their associates.

2014, c.20, s.9

Issuance of tax credit certificate

15(1)On receipt of an application under subsection 14(1) or (1.1), the Minister shall, subject to subsection (2), issue a tax credit certificate to the eligible investor indicating the amount of the tax credit and the taxation year in respect of which the credit may be claimed, unless the Minister considers that the corporation registered under this Act or its directors, officers or shareholders are conducting its business or affairs in a manner that is contrary to the spirit and intent of this Act and the regulations.

15(2)The Minister shall not issue a tax credit certificate under subsection (1) unless the Minister is satisfied that

(a) the corporation and its eligible investors are complying with the corporation’s investment plan and this Act and the regulations,

(b) the eligible shares to which the tax credit relates do not entitle the holder, in respect of the acquisition of those shares,

(i) to claim a tax credit under the New Brunswick Income Tax Act, other than a tax credit under section 35 or 61.1, or both, of that Act, against tax otherwise payable,

(ii) to claim a deduction from income under the New Brunswick Income Tax Act or the federal Act, other than a deduction under subsection 146(5) of the federal Act, or

(iii) to receive any other financial assistance from any government, municipality, rural community or public authority,

(c) no tax credit has been previously allowed under the New Brunswick Income Tax Act in respect of the eligible shares to which the tax credit certificate relates,

(d) the eligible shares to which the tax credit certificate relates were purchased and acquired directly from the corporation issuing the eligible shares,

(e) the aggregate of all entitlements in respect of the eligible investor for all tax credit certificates applied for in the year does not exceed

(i) $125,000 if the eligible investor is an individual, or

(ii) $75,000 if the eligible investor is a corporation or a trust, and

(f) there has been compliance with any other conditions that may be prescribed by regulation.

2005, c.7, s.77; 2007, c.49, s.5; 2009, c.14, s.5; 2014, c.20, s.10; 2015, c.26, s.2

ENFORCEMENT

Revocation of certificate of registration

16(1)The Minister may, at any time after a certificate of registration has been issued to a corporation, revoke the certificate if,

(a) in the opinion of the Minister, the corporation has not complied with any provision of this Act or the regulations,

(b) the Minister is of the opinion that the corporation, or its directors, officers or shareholders, are conducting the business or affairs of the corporation in a manner that is contrary to the spirit and intent of this Act and the regulations,

(c) the corporation has misrepresented any information to the Minister either knowingly or through circumstances amounting to negligence,

(d) the corporation has used the funds raised by the specified issue for any use prohibited by section 13,

(e) the corporation redeems, retracts or registers the transfer of an eligible share contrary to the prohibitions required by this Act to be contained in the investment plan,

(f) in the opinion of the Minister, the corporation is no longer in compliance with its investment plan, or

(g) any other transaction or event occurs as prescribed by regulation.

16(2)The Minister may not revoke the registration of a corporation without first notifying, by registered mail, the corporation of the Minister’s intent and giving it, its representative and other persons that would be affected by the revocation the opportunity of making comment.

16(3)A person to whom the Minister sends a notice under subsection (1) and who wishes to make comment to the Minister shall make such comment within 30 days after receiving the notice.

16(4)A notice under subsection (1) shall be deemed to have been received by the person to whom it is sent no later than 5 days after it was mailed.

2014, c.20, s.11

Surrender of registration

17On request of a corporation registered under this Act, the Minister may accept the surrender of the registration of a corporation if

(a) the corporation pays to the Minister the amount, if any, required to be paid under section 18, and

(b) the corporation meets all other conditions that may be prescribed by regulation.

Recovery of tax credit on revocation, surrender or wind-up

18A corporation whose registration is revoked by the Minister, that makes a request under section 17 to surrender its registration or that proposes to wind-up or dissolve shall immediately pay to the Minister an amount of money equal to the total amount of all tax credits for which tax credit certificates were issued or may be issued under this Act in respect of all eligible shares of the corporation which were issued as part of a specified issue within the 4 years immediately preceding the date of the revocation, surrender of registration or the winding-up or dissolution.

Recovery of tax credit on receivership or bankruptcy

2014, c.20, s.12

18.1If a corporation registered under this Act is in receivership or in bankruptcy within the four years immediately following the issuance of its eligible shares, the corporation shall immediately pay to the Minister an amount of money equal to the following percentage of the total amount of all tax credits for which tax certificates were issued or may be issued under this Act in respect of all eligible shares of the corporation that were issued as part of its specified issue within that period of time:

(48 - n)/ 48

where

n is the number of months that the eligible shares were held.

2014, c.20, s.12

Liability of officers and directors

19Where an officer or director of a corporation registered under this Act permits or acquiesces to a transaction or event or a series of transactions or events that the officer or director knew or ought to have known at that time would cause the certificate of registration to be revoked, that person is jointly and severally liable for the repayment under section 18.

2014, c.20, s.13

Recovery of tax credit where no entitlement

20If an eligible investor receives, directly or indirectly, the benefit of all or part of a tax credit in respect of which the eligible investor is not entitled, the eligible investor shall immediately pay the amount of the benefit to the Minister.

2014, c.20, s.14

Recovery of tax credit on early redemption

21(1)Where a corporation registered under this Act redeems, acquires or cancels a share in respect of which a tax credit certificate was issued under this Act before the expiry of the holding period, other than where permitted by regulation, the person who was the shareholder immediately before the redemption, acquisition or cancellation shall pay to the Minister an amount equal to the tax credit allowed in respect of such share, or a lesser amount if so prescribed by regulation.

21(2)In subsection (1), “holding period” means 4 years after the date the eligible share was issued.

Withholding and remittance of tax credit

22(1)Where a corporation registered under this Act redeems, acquires or cancels a share in respect of which a tax credit certificate was issued and, as a consequence, an amount is payable under subsection 21(1) by the person who was the shareholder immediately before the redemption, acquisition or cancellation, the corporation shall

(a) withhold from the amount otherwise payable to the shareholder on the redemption, acquisition or cancellation, the amount payable under subsection 21(1),

(b) within 30 days after the redemption, acquisition or cancellation, send the amount payable under subsection 21(1) to the Minister on behalf of the shareholder, and

(c) submit with the amount referred to in paragraph (b), a statement in the form approved by the Minister.

22(2)Where a corporation registered under this Act fails to withhold the amount referred to in paragraph (1)(a) from an amount paid to a shareholder, the corporation is liable to pay on behalf of the shareholder the amount the corporation failed to withhold, and is entitled to recover that amount from the shareholder.

2014, c.20, s.15

Disposal of share

23A person who disposes of an eligible share in respect of which a tax credit has been allowed within 4 years after the date of purchase shall repay to the Minister

(a) an amount equal to the tax credit received in respect of the share, including interest thereon where prescribed by regulation, or

(b) a lesser amount determined under the regulations in circumstances prescribed by regulation.

GENERAL

Annual returns

24(1)A corporation that is registered under this Act shall prepare and file with the Minister an annual return in accordance with the regulations, with such information as the Minister requires and in the form approved by the Minister.

24(2)Unless otherwise ordered by the Minister, subsection (1) does not apply after 4 years have elapsed since the date on which the corporation last issued eligible shares as part of a specified issue.

Records of corporation

25(1)A corporation that is registered under this Act shall maintain records and books of account at its registered office in New Brunswick, or at such other place as may be designated by the Minister, in such form and containing such information as the Minister considers necessary to verify that the corporation has complied with this Act and the regulations.

25(2)Every corporation required to keep records and books of account shall, until permission for their disposal is obtained from the Minister, retain every such record or book of account and every document necessary to verify the information in such records or books of account.

Debt due Her Majesty

26An amount required to be paid to the Minister under this Act is a debt due to Her Majesty in right of the Province and may be recovered by action in her name in any court of competent jurisdiction.

Recovery of amount

27(1)The Minister may issue a certificate stating an amount that is due and payable under this Act, including interest, if any, and the name of the person by whom the same is due and payable.

27(2)A certificate referred to in subsection (1) may be issued

(a) when directed by the Minister, or

(b) upon the expiration of 30 days after the mailing of a registered letter demanding payment.

27(3)A certificate issued under subsection (1) may be filed in The Court of Queen’s Bench of New Brunswick and shall be entered and recorded in the Court, and when so entered and recorded becomes a judgment of the Court and may be enforced as a judgment obtained in the Court by Her Majesty against the person named in the certificate for a debt of the amount specified in the certificate.

27(4)All reasonable costs and charges attendant upon the filing, entering and recording of the certificate shall be recovered in like manner as if the amount thereof had been included in the certificate.

Interest

28From the date on which an amount due to Her Majesty under this Act is to be paid by a person, the amount bears interest at the rate prescribed by regulation.

Extension of time

29The Minister may extend, with or without conditions, the time limit for the doing of anything under this Act or the regulations and may grant the extension notwithstanding that the time limit to be extended has expired.

Projections

30A calculation or determination under this Act or the regulations may be based on projections that the Minister considers to be appropriate.

Appointment of auditors and inspectors

31(1)The Minister may appoint one or more persons as auditors for the purposes of ensuring compliance with this Act and the regulations.

31(2)The Minister may appoint one or more persons as inspectors for the purposes of ensuring compliance with this Act and the regulations.

Audits and examinations

32(1)For the purpose of ensuring compliance with this Act and the regulations, an auditor or inspector may, during normal business hours, carry out an examination of the affairs of

(a) a corporation that is registered under this Act, or

(b) a person who is or was a shareholder of a corporation that is registered under this Act.

32(2)An auditor may, for the purpose of ensuring compliance with this Act and the regulations, audit or examine the records, books of account or other documents of a corporation or person referred to in subsection (1), and make copies of them.

32(3)An inspector may, for the purpose of ensuring compliance with this Act and the regulations, examine the records, books of account or other documents of a corporation or person referred to in subsection (1), and make copies of them.

32(4)For the purposes of an audit or examination under subsections (1) to (3), an auditor or inspector may, during normal business hours, enter any premises of a corporation or person referred to in subsection (1).

32(5)Notwithstanding subsection (4), an auditor or inspector shall not enter a private dwelling unless the auditor or inspector

(a) has the consent of the occupier, or

(b) has obtained a warrant under the Entry Warrants Act.

32(6)Before or after attempting to enter or have access to, through or over any premises for the purposes of this section, an auditor or inspector may apply to a judge for an entry warrant under the Entry Warrants Act.

32(7)An auditor or inspector may request the assistance of a peace officer for the purposes of this section.

Removal of documents

33(1)An auditor or inspector may remove records, books of account or documents from a premises for the purposes of section 32 and may make a copy or extract of them or any part of them and shall give a receipt to the occupier for the records, books of account or documents so removed.

33(2)Where records, books of account or documents are removed from a premises, they shall be returned to the occupier as soon as possible after the making of the copies or extracts.

33(3)A copy or extract of any record, book of account or document related to an examination and purporting to be certified by an auditor or inspector is admissible in evidence in any action, proceeding or prosecution as proof, in the absence of evidence to the contrary, of the original without proof of the appointment, authority or signature of the person purporting to have certified the copy or extract.

Information to be provided

34Every person shall furnish an auditor or inspector with such information that the auditor or inspector reasonably requires for the purposes of section 32.

Obstruction

35(1)No person shall obstruct or interfere with an auditor in the carrying out of an audit or examination under this Act.

35(2)No person shall obstruct or interfere with an inspector in the carrying out of an examination under this Act.

35(3)A refusal of consent to enter a private dwelling is not and shall not be deemed to be interfering with or obstructing within the meaning of subsection (1) or (2), except where an entry warrant has been obtained.

Offences

36(1)A person who

(a) makes or assists in making a statement in any document or information required to be filed or furnished under this Act or the regulations to the Minister, an auditor or an inspector that, at the time and in the light of the circumstances under which the statement is made, is false or misleading with respect to a material fact or that omits to state a material fact, the omission of which makes that statement false or misleading,

(b) makes, or assists in making, false or misleading entries in the records or books of account of a corporation registered under this Act, or

(c) knowingly fails to record material particulars in the records or books of account of a corporation registered under this Act,

commits an offence.

36(2)A person does not commit an offence under this section in relation to a statement made if the person did not know that the statement was false or misleading and, in the exercise of reasonable diligence, could not have known that the statement was false or misleading.

36(3)A person who violates or fails to comply with a provision of this Act listed in Column I of Schedule A commits an offence.

36(4)A person who violates or fails to comply with any provision of the regulations commits an offence.

Penalties

37(1)For the purposes of Part II of the Provincial Offences Procedure Act, each offence listed in Column I of Schedule A is punishable as an offence of the category listed beside it in Column II of Schedule A.

37(2)Where an offence under this Act continues for more than one day

(a) the minimum fine that may be imposed is the minimum fine set by the Provincial Offences Procedure Act multiplied by the number of days during which the offence continues, and

(b) the maximum fine that may be imposed is the maximum fine set by the Provincial Offences Procedure Act multiplied by the number of days during which the offence continues.

Certificate as evidence

38(1)In any prosecution or other proceeding under this Act, a certificate signed by the Minister or purporting to be signed by the Minister stating that

(a) a specified amount is the amount that is due and payable by a person under this Act,

(b) a person failed to keep records or books of account in such form, containing such information and in such place as is required under this Act and the regulations,

(c) a person failed to make an annual return in such form and manner and at such time as is required under this Act and the regulations,

(d) a person at a specified time refused to permit an auditor to carry out an audit or examination under this Act or obstructed or interfered with an audit or examination being carried out by the auditor under this Act, or

(e) a person at a specified time refused to permit an inspector to carry out an examination under this Act or obstructed or interfered with an examination being carried out by the inspector under this Act,

may be adduced in evidence without proof of the appointment, signature or authority of the Minister and, when so adduced, is, in the absence of evidence to the contrary, proof of the facts stated therein and where the person named in the certificate has the same name as the accused, that the person named in the certificate is the accused.

38(2)Any report, certificate or other document signed by the Minister or purporting to be signed by the Minister may be adduced in evidence in any court without proof of the appointment, signature of authority of the Minister and, when so adduced, is, in the absence of evidence to the contrary, proof of the facts stated therein.

Regulations

39(1)The Lieutenant-Governor in Council may make regulations

(a) respecting forms for the purpose of this Act;

(b) prescribing any matter that is to be prescribed under this Act or is to be determined, required or permitted by regulation;

(c) requiring any person to supply information or returns respecting any matter required in ensuring compliance with this Act;

(c.1) prescribing fees for the purposes of sections 6, 13.1 and 14;

(d) establishing periods of time to be taken into account in calculations or determinations under this Act or the regulations, and varying periods set by this Act;

(e) respecting the manner and effective date of revocation of a certificate of registration by the Minister;

(f) respecting the filing of annual returns by a corporation registered under this Act;

(g) prohibiting rights and restrictions for the purposes of subparagraph 11(e)(iv);

(g.1) respecting the penalty referred to in subsection 13.6(3), including the amount of the penalty, the time limit for paying the penalty, interest on the penalty and a refund of the penalty;

(h) defining any word or expression used but not defined in this Act;

(i) respecting any other matter that, in the opinion of the Lieutenant-Governor in Council, is necessary for carrying out the purposes and provisions of this Act.

39(2)A regulation made under subsection (1) may be retroactive in its operation.

2009, c.14, s.6; 2014, c.45, s.9

CONSEQUENTIAL AMENDMENTS

New Brunswick Income Tax Act

40The New Brunswick Income Tax Act, chapter N-6.001 of the Acts of New Brunswick, 2000, is amended

(a) in section 38 by striking out “61 and 50” and substituting “61, 50 and 50.1”;

(b) in subsection 49.1(1) in the definition “tax otherwise payable” by striking out “sections 50 and 61” and substituting “sections 50, 50.1 and 61”;

(c) in subsection 50(1) in the definition “tax otherwise payable” by adding “and section 50.1” after “but for this section”;

(d) by adding after section 50 the following:

Subdivision i.1

Small Business Investor Tax Credit

Small business investor tax credit

50.1(1)In this section

“eligible share” means eligible share as defined in the Small Business Investor Tax Credit Act; (action admissible)

“qualifying trust” means qualifying trust as defined in the Small Business Investor Tax Credit Act; (fiducie admissible)

“small business investor tax credit” means the aggregate of the tax credit amounts shown on all tax credit certificates issued to an individual in respect of a taxation year under section 15 of the Small Business Investor Tax Credit Act. (crédit d’impôt pour les investisseurs dans les petites entreprises)

50.1(2)Where, in respect of a taxation year, an individual has been issued a tax credit certificate under section 15 of the Small Business Investor Tax Credit Act, there may be deducted from the tax otherwise payable by the individual under this Act in respect of that taxation year the lesser of

(a) the total of

(i) the individual’s small business investor tax credit allowed for that taxation year under subsection 14(4) of the Small Business Investor Tax Credit Act, and

(ii) the amount, if any, of the individual’s unused balance applied in accordance with subsection (5), and

(b) $15,000.

50.1(3)An individual who is entitled to a deduction under this section shall file, with the individual’s return of income for any taxation year in respect of which a deduction is claimed under this section, a copy of the relevant tax credit certificates issued under section 15 of the Small Business Investor Tax Credit Act.

50.1(4)The deduction may be made in respect of a tax credit certificate issued in respect of eligible shares acquired and paid for by the individual or a qualifying trust of the individual in the taxation year or within 60 days after the end of the taxation year.

50.1(5)Where, in respect of a taxation year, an individual has been issued a tax credit certificate under section 15 of the Small Business Investor Tax Credit Act and the individual’s small business investor tax credit that may be deducted for that taxation year in subparagraph (2)(a)(i) exceeds the individual’s tax otherwise payable under this Act for that taxation year, the individual may, to the extent that it was not deducted in another taxation year,

(a) deduct any of this unused balance of the small business investor tax credit from the individual’s tax otherwise payable in any one or more of the 3 taxation years preceding that taxation year, provided that no deduction shall be made under this paragraph for a taxation year preceding the 2003 taxation year, or

(b) deduct any of this unused balance of the small business investor tax credit from the individual’s tax otherwise payable in any one or more of the 7 taxation years following that taxation year.

(e) in subsection 61(1) in the definition “tax otherwise payable under this Part” by adding “and sections 50 and 50.1” after “but for this section”.

REPEAL

Repeal

41The Equity Tax Credit Act, chapter E-9.4 of the Acts of New Brunswick, 1999, is repealed.

COMMENCEMENT

Commencement

42This Act or any provision of this Act comes into force on a day or days to be fixed by proclamation.

SCHEDULE A

Column I Section		Column II Category of Offence
	24(1)..............		F
	25(1)..............		F
	34..............		F
	35(1)..............		F
	35(2)..............		F
	36(1)(a)..............		F
	36(1)(b)..............		F
	36(1)(c)..............		F
	36(4)..............		B

N.B. This Act was proclaimed and came into force August 1, 2003.

N.B. This Act is consolidated to February 9, 2017.

S-9.05 - Small Business Investor Tax Credit Act

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