Agreement concerning the Provision of Services by the Canada Revenue Agency in respect of the Administration of the Corporations Tax Act

BETWEEN:

The Minister of National Revenue on behalf of the Government of Canada (referred to in this Agreement as "Canada"),

AND:

The Ontario Minister of Revenue on behalf of the Government of Ontario (referred to in this Agreement as "Ontario"),

1. Recitals

WHEREAS, on May 13, 2004, Canada and Ontario signed a Memorandum of Agreement (MOA) on Collaboration in the Delivery of Public Service which provides a framework to governments to pursue service delivery and innovative initiatives aimed at responding to the needs of citizens of Ontario;

AND WHEREAS, on May 17, 2005, Canada and Ontario signed an Addendum to the May 13, 2004 agreement to accelerate progress on the implementation of the agreement, which included a commitment by Canada and Ontario to conclude as soon as possible an agreement to create a single administration of corporate income tax in Ontario;  

AND WHEREAS the Budget Measures Act, 2006 amended the Corporations Tax Act (Ontario) to add section 98.1 to authorize the Minister of Finance, with the approval of the Lieutenant-Governor-in-Council, to enter into an agreement on behalf of Ontario with the Minister of National Revenue for the provision of services by Canada Revenue Agency (CRA) relating to the administration and enforcement of provisions of the Corporations Tax Act on behalf of the Minister of Finance;

AND WHEREAS, on October 6, 2006, Canada and Ontario signed a MOA which outlined the various undertakings by both Canada and Ontario concerning a Single Administration of Ontario Corporate Tax for taxation years ending after December 31, 2008, including arrangements for transition to a single administration;

AND WHEREAS, on June 13, 2007, the Lieutenant-Governor-in-Council made Order-in-Council O.C. 1349/2007 that assigns responsibility for the administration of the Corporations Tax Act and other provincial tax statutes to the Ontario Minister of Revenue, including authority to enter into an agreement under section 98.1 of the Corporations Tax Act on behalf of Ontario with the approval of the Lieutenant-Governor-in-Council;

AND WHEREAS, on July 31, 2007, the CRA and Ontario Ministry of Revenue (OMoR) announced the signing of the CTAO/CTAR Human Resources Agreement that outlines employment opportunities at the CRA for Ontario employees and describes the arrangements for the transition of employees who choose to accept job offers from the CRA;

AND WHEREAS, pursuant to subsection 6(2) of the Canada Revenue Agency Act (S.C. 1999, c.17)the Minister of National Revenue is responsible for the CRA.

Now, therefore, the parties hereto agree as follows:

2. Purpose

In accordance with section 98.1 of the Corporations Tax Act, this Agreement concerns the provision of services by the CRA relating to the administration of the Act and regulations on behalf of Ontario with respect to taxation years ending before 2009.

The purpose of this Agreement is to facilitate a smooth transition to a single corporate tax administration for Ontario by the CRA as provided for by the MOA.  The administration of certain provisions of the Corporations Tax Act and the regulations made under that Act by the CRA for taxation years ending before 2009 pursuant to this Agreement will allow for the early integration of audit and other functions by the CRA.

Consequential to the entering into of this Agreement, a Transition Agreement between the CRA and Ontario has been entered into by the Commissioner of Revenue, CRA and the Commissoner of Revenue of Ontario on behalf of Ontario, and is set out in the Annex to this Agreement.

3. General Covenants

Canada agrees that, for taxation years ending before 2009, the CRA will provide services relating to the administration of the Corporations Tax Act and regulations on behalf of Ontario in accordance with this Agreement and with the transition strategies described in the Transition Agreement set out in the Annex to this Agreement.  

The services, as outlined in the Transition Agreement, provided by the CRA under this Agreement will relate to the administration of the provisions of the Corporations Tax Act and the regulations that are prescribed under clause  98.1(10)(a) of the Act.  Canada agrees that the CRA will administer these provisions in accordance with any regulations made under clause 98.1(10)(c) of that Act.

Canada and Ontario agree to make best efforts to ensure that the CRA is able, as of April 3, 2008, to administer the prescribed provisions of the Corporations Tax Act and regulations in accordance with this Agreement. 

The exchange of information and confidentiality agreements between the Ontario Ministry of Revenue and the CRA remain in good order but may be supplemented by mutual agreement and as permitted by law.

4. General Undertakings

Ontario agrees that regulations required by clause 98.1(10)(a) of the Corporations Tax Act will be made before April 3, 2008 to ensure that the CRA has sufficient authority to administer the relevant provisions of the Act and regulations.

Canada and Ontario undertake to work co-operatively in accordance with the Transition Agreement. 

Ontario agrees to pay the amounts payable in respect of the services provided by the CRA pursuant to this Agreement, as set out in the Transition Agreement entered into by the CRA and the Ontario Ministry of Revenue.

5. Process

The Minister of National Revenue and the Minister of Revenue of Ontario will oversee the process of implementation of this Agreement.

This Agreement may be amended at any time with the consent of both parties.

6. Coming Into Force

This Agreement comes into effect on the day that it is last signed.

7. Termination

The parties may mutually consent to the termination of this Agreement and the Minister of National Revenue and the Minister of Revenue Ontario will oversee the termination process.