Labrador Inuit Tax Treatment Agreement Amendment Agreement No. 1

THIS AMENDMENT AGREEMENT dated for reference October 2, 2017.

BETWEEN:

HER MAJESTY THE QUEEN IN RIGHT OF CANADA, as represented by the Minister of Finance

(“Canada”)

OF THE FIRST PART

AND:

HER MAJESTY THE QUEEN IN RIGHT OF NEWFOUNDLAND AND LABRADOR, as represented by the Minister of Finance and President of the Treasury Board and by the Minister for Intergovernmental and Indigenous Affairs

(“the Province”)

OF THE SECOND PART

AND:

THE INUIT OF LABRADOR, as represented by the President of the Nunatsiavut Government

(the “Inuit”)

OF THE THIRD PART

WHEREAS:

  1. Section 20.7.1 of the Labrador Inuit Land Claims Agreement provides that the parties shall enter into a tax treatment agreement;
  2. The parties entered into a tax treatment agreement on April 12, 2005 (the “Labrador Inuit Tax Treatment Agreement”);
  3. The parties wish to amend the Labrador Inuit Tax Treatment Agreement;
  4. Section 11.1 of the Labrador Inuit Tax Treatment Agreement provides that any amendment must be in writing and executed by all parties.

NOW THEREFORE in consideration of the premises and the covenants and agreements set out below, the parties agree as follows:

AMENDMENTS

  1. Section 1.1 of the Labrador Inuit Tax Treatment Agreement is amended by deleting the definition of “permanent establishment”.
  2. Part 4 of the Labrador Inuit Tax Treatment Agreement is amended by:
    1. adding “and” after “engaged in by the claimant for profit or gain;” in 4.1(a);
    2. replacing “; and” in 4.1(b) with “.”; and
    3. deleting 4.1(c) and 4.2.
  3. Subsection 6.1(c) of the Labrador Inuit Tax Treatment Agreement is amended by adding the following paragraph (i.1) immediately after paragraph (i):

“(i.1) interests as a member of a partnership where:

(A) by operation of any law governing the arrangement in respect of the partnership, the liability of the trust is limited;

(B) the trust deals at arm’s length with each general partner of the partnership; and

(C) the trust, or the trust together with persons and partnerships with which it does not deal at arm’s length, holds interests in the partnership that:

I. have a fair market value of not more than 20% of the fair market value of the interests of all members in the partnership; or

II. have a fair market value of more than 20% of the fair market value of the interests of all members in the partnership as a result of a redemption of interests in the partnership, provided that the excess over 20% is disposed of by the end of the second calendar year following the calendar year in which the excess arose or other later time that the Minister may consider reasonable;”.

  1. Subsection 6.1(d) of the Labrador Inuit Tax Treatment Agreement is amended by adding the following words after “carry on a business as a proprietor or member of a partnership”:

    “, except that for this purpose, if a trust holds an interest described in (c)(i.1), the trust shall not, solely because of its acquisition and holding of that interest, be considered to carry on any business or other activity of the partnership.”

CONTINUING FORCE AND EFFECT

  1. For greater certainty, the Labrador Inuit Tax Treatment Agreement as amended by this Amendment Agreement continues in full force and effect in accordance with its terms.

FURTHER ASSURANCES

  1. The Parties will execute any other documents and do any other things that may be necessary to carry out the intent of this Amendment Agreement.

HEADINGS

  1. In this Amendment Agreement, headings are for convenience only, do not form a part of this Amendment Agreement and in no way define, limit, alter or enlarge the scope or meaning of any provision of this Amendment Agreement.

NO ASSIGNMENT

  1. This Amendment Agreement may not be assigned, either in whole or in part, by any Party.

ENUREMENT

  1. This Amendment Agreement will enure to the benefit of and be binding upon the Parties and their respective successors.

EFFECTIVE DATE

  1. This Amendment Agreement is effective on the date it is executed by the last of the Parties to execute it.

COUNTERPARTS

  1. This Amendment Agreement may be executed in counterparts each of which so executed shall be deemed to be an original and such counterparts together shall constitute one and the same instrument. Facsimile and scanned signatures shall be accepted the same as original signatures.

For the Inuit of Labrador

Signed at Postville, Newfoundland and Labrador
this 5th day of July, 2017.

Johannes Lampe
President of the Nunatsiavut Government

For the Government of Canada

Signed at Ottawa, Ontario
this 2nd day of October, 2017.

Bill Morneau
The Honourable
Minister of Finance

For the Government of Newfoundland and Labrador

Signed at St Johns, Newfoundland and Labrador
this 12th day of July, 2017.

Cathy Bennett
The Honourable
Minister of Finance and President of Treasury Board

Dwight Ball
The Honourable
Minister for Intergovernmental and Indigenous Affairs