18 October 1989 Ministerial Correspondence 74044 F - Prescribed Areas for Certified Property

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Subject: "Prescribed Areas" for "Certified Property"

We are writing in reply to your memorandum of June 15, 1989, concerning the definition of the "prescribed areas" for "certified property" in section 4602 of the Income Tax Regulations (the "Regulations").

In your memorandum you requested our input concerning a possible discrepancy between section 4602 of the Regulations, the 1971 census divisions and Information Circular I.C. 78-4R3.  You state that it appears the "census divisions" which are identified in subsection 4602(1) of the Regulations as being the prescribed areas for the provinces of Manitoba, Saskatchewan and Alberta, do not exist in the Statistics Canada publications referred to in subsection 4602(2) of, the Regulations.  You suggest that it may be that the division names or numbers used in the Regulations come from a census other than the 1971 census.  In your opinion, the apparent confusion in the definition of "census division" is reflected in I.C. 78-4R3 as there are a number of differences between the map contained in I.C. 78-4R3, the areas listed in the Regulations and the 1971 Census maps.

Our Comments

In our opinion, the "census divisions" referred to in subsection 4602(1) of the Regulations are those contained in the 1976 Census of Canada and as such the maps contained in I.C. 78-4R3 are correct.  This conclusion is based on the following:

1)     Section 4602 of the Regulations was added by P.C. 1981-3029,  SOR/81-880, dated October 30, 1981 and effective in respect of certified property acquired after October 28, 1980.  As such, barring any information to the contrary the census divisions to be used for purposes of subsection 4602(1) of the Regulations would be those contained in the most recent census of Canada.  The most recent census at that time was the 1976 Census of Canada.

2)     Subsection 4602(2) states that "for the purposes of subsection (1), the expression 'census divisions' has the same meaning as in the Dictionary of 1971 Census Terms, Statistics Canada Catalogue Number 12-540, and the Census Divisions and Subdivisions, Statistics Canada Catalogues Numbered 92-704, 92-705, 92-706 and 92-707".  A review of these five publications shows that they each contain a definition of the term "census divisions".  The definition contained in catalogue 92-704 states:

     "The general term 'census divisions' includes a variety of titles such as the administrative units of the provinces of Prince Edward Island, Nova Scotia, New Brunswick, Quebec and Ontario called 'counties'; British Columbia's regional districts; Ontario's regional municipalities, territorial districts, district municipality and metropolitan municipality; and finally the use of the title 'census division' itself, created by Statistics Canada in collaboration with the provincial governments of Newfoundland, Manitoba, Saskatchewan and Alberta, since these governments do not possess administrative units comparable to the counties of other provinces".

     The definitions contained in the other four publications are the same or similar.  The reason that the definitions for purposes of the Regulations are those contained in the 1971 Census of Canada and not the 1976 Census of Canada is that no dictionary of census terms was published in 1976 as Statistics Canada chose to use the 1971 definitions.  In addition, the 1976 Census Divisions and Subdivisions publications contained abbreviated definitions which would not be suitable for purposes of the Regulations.  Although the definitions are from 1971, subsection 4602(2) of the Regulations makes no reference to the actual use of any of the 1971 census division boundaries when determining the actual prescribed areas in Canada for purposes of subsection 4602(1) of the Regulations.  Had subsection 4602(2) of the Regulations been intended to describe the actual census divisions it is unlikely that it would use the Census Divisions and Subdivisions publications which were published to provide data on the population of census subdivisions by sex.  Instead, it likely would have referred to catalogue 92-712 of the 1971 census which contains the population reference maps and complete identification of each census division in Canada.

3)     The maps contained in I.C. 78-4R3 are identical to those found in the 1976 Census of Canada and correspond to the descriptions of the census divisions contained in subsection 4602(1) of the Regulations.

4)     The only province in Canada which had major revisions to its census divisions between 1971 and 1976 was Manitoba.  Manitoba had 20 census divisions numbered 1 to 20 in 1971 and 23 census divisions numbered 1 to 23 in 1976.  Clearly subparagraph 4602(1)(g) is referring to the census divisions as they existed in 1976 when it states that the prescribed area is "that portion of the Province of Manitoba comprising the census divisions 19 and 21 to 23".  Were we to use the 1971 census for Manitoba, no part of northern Manitoba would qualify as a prescribed area, as it was in census district 16 in 1971.  In addition, 1971 census division 19 which at that time was in southern Manitoba would be considered a prescribed area.  This is the only indication in subsection 4602(1) of the Regulations that favour one census year over the other and as such it should be considered as significant when determining whether the 1971 or the 1976 census divisions are to be used.

5)     21(1)(b)

6)     The fact that subparagraphs 4602(1)(h) & (i) of the Regulations refer to census divisions of Northern Saskatchewan and Peace River while the 1971 and 1976 census maps refer only to the division numbers does not appear to be relevant  23 Paragraph 18 of I.C. 78-4R3 identifies these two census divisions by number so as to assist any taxpayer who could not identify them by the names given in the Regulations.

7)     The reason that paragraph 18 of I.C. 78-4R3 identifies the British Columbia census division of Peace River - Liard as being census division number 55 rather than number 23 as in the 1971 census is because the number was changed to 55 for the 1976 census and the 1976 census was used in drafting I.C. 78-4R3.  The 1976 census uses both the number 55 and the name Peace River - Liard when referring to this census division.

Conclusions

1)     The prescribed areas for the province of Manitoba are census divisions 19 and 21 to 23, other than the area within the limits of the city of Thompson, as described in the 1976 census. Taxpayers located in census division 19 only during the 1971 census will not be considered to be located in a prescribed area.

2)     The prescribed area for Saskatchewan is census division 18 as contained in the 1976 census, also referred to as the census division of Northern Saskatchewan.

3)     The prescribed area for Alberta is census division 15, other than the area within the limits of the city of Grande Prairie, as contained in the 1976 census, also referred to as the census division of Peace River.

4)     The prescribed area for British Columbia is census division 55 as contained in the 1976 census, also referred to as the census division of Peace River - Liard.

We trust that this information will be of assistance.

DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch