Tax Collection Agreements and Federal Post-Secondary Education and Health Contributions Regulations, 1987 (SOR/87-218)

Short Title

1 These Regulations may be cited as the Tax Collection Agreements and Federal Post-Secondary Education and Health Contributions Regulations, 1987.

Interpretation

2 In these Regulations,

Act

Act means the Federal-Provincial Fiscal Arrangements Act; (Loi)

population of a province for a fiscal year

population of a province for a fiscal year means the population of a province for a fiscal year as determined by the Chief Statistician of Canada in accordance with section 3; (population d’une province pour un exercice)

taxation year

taxation year means a taxation year within the meaning of the Income Tax Act. (année d’imposition)

Determination of Population of a Province

3 Subject to subsections 6(5) and (5.1) the population of a province for a fiscal year shall be determined by the Chief Statistician of Canada,

• (a) in the case of the fiscal year beginning on April 1, 1991, on the basis of the census taken by Statistics Canada in that fiscal year in accordance with the Statistics Act; and

• (b) in the case of any other fiscal year, on the basis of the official estimate of the population of that province on the first day of June of that fiscal year as estimated by Statistics Canada and set out by the Chief Statistician of Canada in a certificate submitted to the Minister.

Tax Collection Agreements

4 Where the government of a province has entered into a tax collection agreement with the Government of Canada, advance payments authorized under section 8 of the Act may be made to the province by the Minister out of the Consolidated Revenue Fund on the basis of estimates calculated in accordance with the provisions of the agreement.

Established Programs Financing

• 5 (1) For the purposes of clause 16(1)(b)(ii)(A) of the Act, the relevant revenue bases for a province for a fiscal year shall be determined as follows:

  • (a) with respect to personal income taxes, by aggregating

    • (i) 75 per cent of the assessed federal individual income tax applicable to the province for the taxation year ending in the fiscal year, as determined by the Minister of National Revenue, and

    • (ii) 25 per cent of the assessed federal individual income tax applicable to the province for the taxation year beginning in the fiscal year, as determined by the Minister of National Revenue; and

  • (b) with respect to corporation income taxes, by aggregating

    • (i) 75 per cent of the aggregate for all corporations having a taxation year ending in the calendar year that ends in the fiscal year of the corporation taxable income earned in the taxation year in the province, as determined by the Minister of National Revenue pursuant to paragraph 124(4)(a) of the Income Tax Act, and

    • (ii) 25 per cent of the aggregate for all corporations having a taxation year ending in the calendar year that begins in the fiscal year of the corporation taxable income earned in the taxation year in the province, as determined by the Minister of National Revenue pursuant to paragraph 124(4)(a) of the Income Tax Act.

• (2) For the purposes of clause 16(1)(b)(ii)(B) of the Act, the amount of the equalization payment that would be paid, as referred to in subparagraph 16(1)(b)(ii) of the Act, shall be adjusted in the following manner:

  • (a) if subsection 4(6) of the Act applies, the amount of the equalization payment shall be increased by the amount determined according to the following formula:

    P × (A × F ÷ B)

  • (b) if subsection 4(9) of the Act applies, the amount of the equalization payment increased under paragraph (a), where applicable, shall be reduced by the amount determined according to the following formula:

    P × (A × C ÷ B)

• (3) For the purposes of subsection (2):

  • (a) “P” is the population of the province for a fiscal year;

  • (b) “A” is the aggregate of the average per capita yield of the provinces of Ontario, Quebec, British Columbia, Manitoba and Saskatchewan for the fiscal year for the revenue sources set out in subsection 16(2) of the Act;

  • (c) “B” is the aggregate of the average per capita yield of the provinces of Ontario, Quebec, British Columbia, Manitoba and Saskatchewan for the fiscal year for all revenue sources;

  • (d) “F” is the quotient obtained by dividing the amount by which the equalization payment for the province determined under subsection 4(6) of the Act exceeds the equalization payment for the province determined under subsection 4(1) of the Act by the population of the province for that fiscal year; and

  • (e) “C” is the amount determined under paragraph 4(9)(d) of the Act for the fiscal year.

• 6 (1) With respect to

  • (a) the program referred to in section 20 of the Act as that section read on March 31, 1996, the Secretary of State, and

  • (b) the programs referred to in sections 22 and 23 of the Act as those sections read on March 31, 1996, the Minister of National Health and Welfare,

  may make monthly advance payments on account of any amounts that the Minister estimates may become payable to a province in respect of that fiscal year.

• (2) Advance payments made to a province in respect of a fiscal year may be adjusted by the Minister during that fiscal year so that the cash component of the established programs financing transfer is consistent with the data being used to compute payments to the provinces under the tax collection agreements.

• (3) An interim adjustment in respect of a program referred to in subsection (1) in a fiscal year may be calculated by the Minister during a subsequent fiscal year and may be given effect by an increase or decrease in

  • (a) any amounts otherwise payable in respect of that program, where the subsequent fiscal year ends on or before March 31, 1996, and

  • (b) any amounts payable in respect of the Canada Health and Social Transfer, where the subsequent fiscal year ends after March 31, 1996,

  over a period not exceeding eight months, commencing on the first day of the first or the second month following the month in which the adjustment was calculated.

• (4) A final settlement in respect of a program and fiscal year referred to in subsection (1) shall be calculated by the Minister using only data available during the 30 months following the end of that fiscal year and shall, unless otherwise agreed by the Government of Canada and the government of the province, be given effect during the third fiscal year after that fiscal year

  • (a) where the final settlement is made on or before March 31, 1996, by an increase or decrease in one or more of the amounts that are otherwise payable in respect of the program; and

  • (b) where the final settlement is made after March 31, 1996, by an increase or decrease in one or more of the amounts that are otherwise payable in respect of the Canada Health and Social Transfer.

• (5) The population of a province for a fiscal year shall be

  • (a) for the purposes of subsection (4), the population of that province on the first day of June of that fiscal year, as estimated by the Chief Statistician of Canada using the most recent information that has been officially obtained by or that is available to Statistics Canada within the period of 30 months immediately following the end of that fiscal year; and

  • (b) for the purposes of subsections (2) and (3), the population as estimated by the Minister on the basis of population statistics made available to the Minister by the Chief Statistician of Canada.

• (5.1) Notwithstanding subsection (5), the population of a province for the fiscal year beginning on April 1, 1990 shall be the population of that province on June 1, 1990, as estimated by the Chief Statistician of Canada based on

  • (a) the 1986 and 1991 censuses, excluding non-permanent residents and the adjustment for Net Census Undercoverage for all groups, other than the adjustment in respect of incompletely enumerated Indian settlements and reserves; and

  • (b) the most recent information obtained by or available to Statistics Canada within the period of 30 months immediately following the end of that fiscal year.

• (6) Subject to subsection (7), the Chief Statistician of Canada shall, immediately following the thirtieth month after the end of a fiscal year, prepare and submit to the Minister a certificate that sets out the population of each province, for the fiscal year and each fiscal year that precedes that fiscal year since April 1, 1972, as estimated in accordance with paragraph (5)(a).

• (7) The Chief Statistician of Canada shall, in respect of the fiscal year beginning on April 1, 1990, prepare and submit to the Minister, immediately following February 28, 1994, a certificate that sets out the population of each province for that fiscal year and the four immediately preceding fiscal years, as estimated in accordance with subsection (5.1).

Alternative Payments for Standing Programs

• 7 (1) Payments authorized under section 28 of the Act, as that section read on March 31, 1996, in respect of the established programs, shall be made at the times and in the manner provided for in section 6.

• (2) Payments authorized under section 28 of the Act, as that section read on March 31, 1996, to be made to a province in respect of a special welfare program shall be made as follows:

  • (a) in each fiscal year, the Minister shall estimate the amount, if any, that is payable in respect of that year and shall pay that amount, if any, to the province on account thereof in monthly instalments commencing on April 30 of that year; and

  • (b) where, during a fiscal year in respect of which a payment is being made pursuant to paragraph (a) to the province, it is determined by the Minister, as a result of having received more accurate information for estimating the amount payable, that the estimated amount referred to in that paragraph should be revised, the Minister shall make a new estimate of the amount in accordance with that information and the remaining monthly instalments payable in respect of that year shall be adjusted in accordance with the new estimate.

• (3) Where, after the end of each fiscal year, the Minister is satisfied that all the relevant information for determining the actual amount payable to a province in respect of a special welfare program has been received, the Minister shall make a final determination of the aggregate amount

  • (a) that is payable to the province in respect of that year under subsection 28(2) of the Act, as that section read on March 31, 1996, or

  • (b) that may be recovered from the province in accordance with subsection 28(4) of the Act, as that section read on March 31, 1996,

  and the Minister shall furnish the province with a statement outlining the method used in making the determination and the results of each computation made in respect of the determination.

Transfer Payments with Respect to Preferred Share Dividend Taxes Under Parts IV.1 and VI.1 of the Income Tax Act

• 8 (1) Subject to subsection (2), for each fiscal year that begins after March 31, 1987, the Minister of National Revenue shall, within four months after the end of the calendar year in which that fiscal year ends, furnish the Minister with a statement of

  • (a) the total taxable income of each corporation having taxes payable under Parts IV.1 and VI.1 of the Income Tax Act for the taxation year of the corporation ending in the fiscal year, and the taxable income of each such corporation earned in each province in that taxation year determined in accordance with the provisions of regulations made under the Income Tax Act;

  • (b) the taxes payable under Parts IV.1 and VI.1 of the Income Tax Act by each such corporation for the taxation year of the corporation ending in the fiscal year; and

  • (c) the amount that may be paid to each province for the fiscal year in respect of such taxes pursuant to section 12.1 of the Act.

• (2) The Minister of National Revenue may, with respect to the fiscal year beginning on April 1, 1987, furnish the Minister with the statement required under subsection (1) at the same time as the Minister of National Revenue furnishes the Minister with the statement for the fiscal year beginning on April 1, 1988.

• (3) Where taxes payable under Parts IV.1 and VI.1 of the Income Tax Act by a corporation for a taxation year ending in a fiscal year are assessed or reassessed by the Minister of National Revenue after the statement referred to in subsection (1) for that fiscal year has been furnished to the Minister, the Minister of National Revenue may include the information required under paragraphs (1)(a), (b) and (c) in respect of such taxes in a statement furnished pursuant to subsection (1) for a subsequent fiscal year.

9 For the purposes of section 12.1 of the Act, the Minister shall pay to each province the amount determined thereunder for a fiscal year within 30 days after receiving the statement referred to in subsection 8(1) for that fiscal year, and shall furnish the province with a statement setting out how the amount was determined.

10 Where, as a result of additional information received from the Minister of National Revenue, the Minister determines that an overpayment or an underpayment has been made under section 12.1 of the Act to a province in respect of a fiscal year, the Minister shall

• (a) in the case of an overpayment, recover from the province, as a debt due to Her Majesty in right of Canada, an amount equal to the overpayment from any moneys that become payable to the province under the Act or any other Act of Parliament for that or any other fiscal year; and

• (b) in the case of an underpayment, pay to the province an amount equal to the balance owing.

Ceasing of Effect

11 Sections 5 to 7 cease to have effect on April 1, 1999.