moa coo and on

8/9/2019 MOA COO and ON

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M E M O R A N D U M O F A G R E E M E N T C O N C E R N IN G A C O M M IT M E N T T O C O N T IN U E

T H E F IR S TN A T IO N P O IN T OF SA L E T AX E X E M P T IO N UN D E R T HE H S T

B ET W E E N:

T he G o v e rn m e n t o f O nt ar io ( “O n tar io ”) , a s r ep re s e n te d b y th e M in ist e r o fR e v e n u e , a n d th e M in ist er o f Ab o r ig in al A ff air s

A N D :

T h e P o l it ica l C o n f e d er a c y of th e C h ie f s o f O n ta r io (“ P o l i ti c a l C o n f e d e r a c y ” ) , a sr e p res en te d b y th e R eg io n a l C h ie f, An g u s T ou lo us e

W H E R E A S C a n a d a a n d O nt ar io h av e e n te re d int o a C a na d a -O n ta r ioC o m p r eh e n s iv e In te gr ate d T ax C o - o r d in a t io n A gr ee m en t (“ C IT C A ” ), an d C an ad aw il l be g in th e im ple m en ta tio n a n d a d m in is t r a ti o n o f th e H S T e f fe c t iv e J u ly 1 s t2 0 1 0 ;

W H E R E A S , a sid e f rom th i s M e m o ra n d u m o f A gr ee m en t, a f te r J u n e 3 0 , 2 0 1 0 ,O n ta ri o F irs t N a tio n s a n d t h o se O nt ar io F ir st N a ti o n p e o p le w h o a re d e f in ed a s an“I n d ia n ” u n d e r the In di an A ct (“ F ir st N at ion p e o p le ” ) w ill n o t h a v e to p ay H S T o ng o o d s p ur c h as e d o n a r e s e rv e , g oo d s p ur ch as ed o f f r e se rv e f ro m qu al ify in g

re m ote s to r e s , a n d g oo d s p u r ch a s ed o ff r e s e r v e w h e re the go od s a re d e liv e re d toa r e s e r v e b y th e ve nd o r o r v e n d o r ’s a ge n t ;

W H ER E A S A n n ex “B ” o f th e C ITC A p ro v id e s O n ta rio w ith fl e x ib il ity to d e s ig n a tep r o p e r ty o r s e rv ice s to be eli gi bl e fo r a p ro v inc ia l v a lu e ad de d ta x — p o int of s a le(P V A T -P O S ) re ba te , s ub je c t to c e r ta in c o n d i ti o n s , w h ic h re la te to th e a b i lit y tode te rm in e t h e a m o u n t o f th e ex p e n d i tur e in th e p r o v in c e a tt rib u tab le to th esu pp ly o f th a t pr op er ty o r se rv ic e ;

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W H E R EA S O n ta r io c ur re n tl y p ro vi de s fo r a p o in t o f sa le ta x ex em p ti o n u nd er th eR et a il Sa le s T a x (R S T ) s y s te m on the s al e of g o o ds to F irs t N a tio n s a nd F ir stN a ti o n p eo pl e in O n ta rio w h o a re S ta tu s I n d ia n s , w h ich e xt e n d s to p ur c h as es o ff

r e s e r v e ( th e e x e m pt io n is h e r e in a f te r r e f e r r ed to a s th e “ F ir st N ati on p o in t-o f - s a leta x ex em p tio n ”);

W H E R E A S O n ta r io F ir s t N at io n s a s s e rt th a t th e p o in t o f s a le t a x e x e m p tio n i s

b as ed o n the ir t r e a ty a n d in h e r e n t r ig h ts ;

W H E R E A S O n ta r io a s s er ts t ha t the Fi rs t N ati on p o in t o f s a le tax e x e m p ti o n is

b a s e d on its a d m in is tr a ti v e p o li c y , w h ic h p ro vi d e s fo r a p o int o f s a le ta xe xe m pt i on f o r g o o d s p u rc h a se d o ff a

r e s e r v e a n d “s el f d e li ve re d” b y a S ta tusInd ia n to a r e s e r v e ;

W H E RE A S O n ta ri o an d th e P o lit ica l C o n fe d er a c y m ay d is ag re e o n th e ba si s ofth e F irs t N a tio n p oi nt -o f-s al e tax e xe m pt ion ; h o w e v er , th ey ar e c o m m it te d to th ep r in c ip le o f r e c o n c i li a ti on a n d to the c on tin u at i on o f th e F ir s t N ati on p o in t- o f - s a leta x e xe m pt io n u n d e r th e H S T, a s th e ex e m p ti on i s cu rr en tly a p p lie d in p ra c ti ce inO n ta r io u n d e r t he R S T s y s te m ;

W H ER E A S in a le tt er d a te d F e b r u a ry 1, 2 01 0 , fr om P ri m e M inis te r H ar p e r toP r e m ie r M c G u in ty , the P r im e M ini st e r a c k n o w led g e d O nt ar io ’ s re qu e s t toc o n ti n u e th e F irst N a tio n po in t-o f- sa le ta x e xe m pti on , a n d sa id :

T h e G ov er nm e nt of C a n a d a re s p e c ts O n ta rio ’s a u to n o m y to m a k e p o licyd e c i s io n s in it s j u r i sd ic t io n . T h is inc lu de s d e c i si o n s w ith r es p e ct to thep r o v in c ia l p or t io n o f th e H S T

W H E R EA S th e P r im e M ini s te r’ s let te r f u r the r s t at e d :T he A g re em e nt a ll o w s O n ta r io to in tr o d uc e r e b a t es u n d e r sp ec if ied c o n di t io ns ,in c lu d in g th at th e y c an b e su pp o r te d b y s uf fi c ie nt d at a . I u nd er st a n d th a tO n ta rio ’s c u r r e n t a p p r o a c h w ou ld b e d i ff ic u lt to a c c u ra te ly m e a s u re for th ep u r p o s e o f de te rm in in g its im p ac t o n p r o v in c ia l re v e n u e s . T h is co u ld in tur naf fe c t the G ov e r nm e nt o f C a n a d a ’ s a b ili ty to m ak e a cc ur at e H S T p ay m e n ts to th ep r o v in c e s . S ho u ld y ou w is h to c o n ti nu e th e ex em p tio n , I w ou ld e n c o u r a g e y o u ro ff ici al s to d e v e lo p a d m in is t r a ti v e o p ti on s f o r ad dr es sin g th e s e m e a s u re m e n tis

su es t ha t a re co n s is t e n t w ith th e ter m s o f th e C ITC A .

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W H E R EA S o ff ic ia ls de si g n a t e d b y th e P o lit i c a l C o nf ed er ac y (p u r su an t tore s o lut io n o f the O n tar io C h ie fs in A s s e m b ly ) a n d O nt a ri o o ff ici al s h av e be en

e n g a g e d in a W o rk ing G ro u p re g a rd in g the F irs t N a tio n po in t- of - sa le ta xe xe m pt io n an d H ST ;

W H E R EA S th e W o r k in g G ro u p is w o rk in g to a d d r e s s th e d a ta a n d m e a s u r e m e n tis su es re fe rr e d to in the P r im e M in is te r’s l e tt e r o f F e b r u a ry 1, 20 1 0 , a n d isde ve lo pi ng a d m in is tr a t iv e o pt io n s , th a t w o u ld a c c o m m o d a t e th e C IT C A , a n d fo ra g re e m e n t b y th e f e d e r al go v e rn m en t, in c lu d in g th e c u rr e n t ap p r o a c h ofp re se nt i n g a n In d ia n st at u s ca rd , a s w e ll a s a s e c u r e d c a rd o p tio n ;

W H E R EA S O n ta r io ac k n o w le d g e s th a t un de r th e C IT C A , it m ay a d v is e C an ad a o fit s d es i re to d e s ig na te p ar ti c u lar p ro pe rt y o r s er vic es e lig ib le fo r a PV A T -P OSre b a te un de r t h e H S T , in c lu d in g th e F irst N at io n po in t-o f- sa le ta x e x e mp ti on ;

W H E R E A S , A n n e x B o f the C IT C A s e ts o ut co n di t io ns fo r p r o v id in g p o int o f s a ler e b at e s , a n d be ca us e C a n a d a w ill be a dm i n is te r in g th e H S T , it w ill b e ne ce ss ar yto e n g a g e C a n a d a o n th e d a ta an d m ea su re m en t i ssu e s, m o re p a rt icu la r ly fo r t h ep u rp o s e o f d e ter m in ing th e a m o u n t o f the ex p e n d i tur e in the p r o v in ce at tri bu ta bleto the s u p p ly o f th e p ro pe rt y a n d se rv ic e e lig ib le fo r the P VA T -P O S R e b a te ;

T H E R E F O R E TH E P A R T IE S H E R E B Y EN T E R IN TO T H IS A G R E E M E N T AS A

S T R O N G C O M M IT M E N T TO C O N T IN U E A F IR S T N A T IO N P O IN T -O F -S A L E TAXE X E M P T IO N U N D E R TH E H ST :

1 . O n ta rio a n d th e P oli tic al C on fe de ra cy a gr ee to w o rk to ge th er to pr e ssC a n ad a t o w ar d r ea li z in g t h e c o n t in u a ti o n , u n de r the H S T , o f the F irs t N a tio n spo in t-o f- sa le ta x ex e mp ti on c ur ren tl y p ro v id e d u n de r the R S T .

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2. O n tar io ag re e s to e x e rc ise i ts f le x ib il i ty un d e r t h e CI T CA a nd to ta ke s te psun de r t he CITC A to p u rs u e the c on ti n u a t ion o f th e F irst N ati on s p o in t -o f- s al e ta x

e xe m pt ion un de r th e H S T, in c lu d in g th e fo llo w in g:

• O nt ar io s ha ll a d v ise C an a d a , p ur su an t to p a r a g r a p h 3 o f A n n e x B o f th eC IT C A , o f its d e s i r e to d es ig na te th e s al e o f g oo ds to I n d ia n s o ff r e s e rv e a se li gi b le fo r a P V A T -P O S R e b a te ef f e c ti v e J u ly 1, 2 01 0 for th e p u rp o s e o fc o n t in u ing the Fi rs t N at io n po in t of sa le e x e m pt io n; an d

• S ub je ct to th e C IT C A , O n ta ri o s h a ll tak e the n ec es sa ry m e a s u re s a s s o o n a sp o ss i b l e to g iv e e ff ec t to th e PV A T -P O S R eb at es u nd er the H S T to e n s u r e th ec o n t i n u a t io n of th e F irst N at ion po in t-o f- sa le e xe m pt io n. T h e pa rt ies a g re e th a tth e c o n ti nu at io n o f the F ir st Na ti on p o in t- of -s a le ta x e x em p t io n is su b j ec t tof e d e r a l a g re e m e n t , a n d tha t s uc h ag re em e n t c a n n o t b e u n r e a so n a b ly w ithh el du nd er C IT C A .

3. O n tar io a nd th e P o li t ic a l C o nf ed er ac y agr e e to w o rk c o l la b o ra t iv el y toad dr es s the d a ta a n d m e a s u r e m e n t i s su e s r e fe rr ed to in the P r im e M in is ter ’s

let te r o f F e b ru a r y 1, 2 0 1 0 , a n d p ro v id e d fo r in p a ra g ra p h 2 of A n n e x B o f th eC IT C A . In th is re g a rd , th e p ar tie s a gr ee to c o n t in u e w o rk , a nd to e n g a g e C an a d a ,for t h e p u rp o s e o f d ete rm in in g th e a m o u n t o f th e P V A T -P O S R e b a te in th ep ro vi nc e a tt r ib u ta b le to th e F irs t N a tio n p o in t-o f- sa le tax e xe m p ti on u nd er th eH ST .

4. On ta rio an d th e P o l itic al C o nf e d era cy w ill m a ke it a p ri o r ity , a nd m a k e b e s te f fo r ts w it h in th ei r r e s p e c t iv e a u t h o r i ti e s , to en su re th a t th e F ir st N at ion p o in t -o f-s a le e x e m p ti on is in p la ce on J u ly 1, 2 01 0. H o w e v e r, in th e e v e n t th a t it is no tp os sib le to f in al ize di s c u s s io n s w ith C a n ad a a n d to c o m p le te the a d m in is tra tiv em e a s u res to c o nt inu e th e Fi rs t N at io n p o in t- of -sa le ta x e x e m p ti o n pr io r to J u ly1 st , th e p ar t ie s a gr ee to w o rk on int er im m ea su re s p e nd in g th e fu ll r e s to ra ti o na nd im pl em e nt at i on o f th e F ir s t N a tio n po in t- o f - sa le ta x e x e m p tio n. T h e o b je c t iv eof th e in te r im m e as u r e s is to p ro v id e r el ief w h ile the r e s to r a t io n a ndim p le m en ta tio n o f th e F irs t N a t io n p o in t o f sa le ex em p tio n is b ein g fi n a liz ed .

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