Budget Implementation Act, 2003 (S.C. 2003, c. 15)

Assented to 2003-06-19

Budget Implementation Act, 2003

S.C. 2003, c. 15

Assented to 2003-06-19

An Act to implement certain provisions of the budget tabled in Parliament on February 18, 2003

SUMMARY

Part 1 authorizes the Minister of Finance to pay $1.5 billion into a trust, to be provided to provinces for the purposes of acquiring diagnostic and medical equipment and training specialized staff in order to improve access to publicly funded diagnostic and treatment services. The funds will be distributed to the provinces on a per capita basis.

Part 2 amends the Federal-Provincial Fiscal Arrangements Act to implement a $16 billion Health Reform transfer and a $2.5 billion Canada Health and Social Transfer (CHST) supplement, and to create two new transfer mechanisms. The Health Reform transfer will be distributed to the provinces on a per capita basis over a five-year period beginning on April 1, 2003. The Minister is authorized to pay a $2.5 billion CHST supplement into a trust from which these funds will be distributed to the provinces on an equal per capita basis. The new Canada Health Transfer and Canada Social Transfer will replace the CHST on April 1, 2004, and funding levels are set out through to 2007-08. In addition, Part 2 removes the maximum amount payable to provinces under the Equalization program, effective in fiscal year 2002-03.

Part 3 amends the Canada Student Financial Assistance Act to add protected persons within the meaning of the Immigration and Refugee Protection Act to the list of students eligible for a student loan, and to ensure that appropriate compensation continues to be paid to provinces and territories not participating in the Canada Student Loans Program. It also amends the Canada Student Financial Assistance Act and the Canada Student Loans Act to provide for a limitation period of six years for the collection of student loans.

Part 4 amends the Employment Insurance Act and the Employment Insurance (Fishing) Regulations to introduce a new type of special benefits. It amends the Act in order to: provide six weeks of new compassionate benefits for families to share; establish the medical proof required to receive such benefits; establish the period during which such benefits may be paid; provide for one waiting period per family when such benefits are shared; provide for the authority to make new regulations consequential to the introduction of compassionate care benefits; set the annual premium rate for 2004; and make other minor consequential amendments to the Employment Insurance Act and the Employment Insurance (Fishing) Regulations. It also makes related amendments to the Canada Labour Code.

Part 5 amends the Budget Implementation Act, 1997, the Budget Implementation Act, 1998, and the Canada Foundation for Sustainable Development Technology Act to permit repayment of public moneys provided to, respectively, the Canada Foundation for Innovation, the Canada Millennium Scholarship Foundation and the Canada Foundation for Sustainable Development Technology to the Receiver General for credit to the Consolidated Revenue Fund on the winding up or dissolution of those foundations. Secondly, this Part provides for the making of grants to certain organizations. Thirdly, this Part amends the Farm Credit Canada Act to remove the temporal restriction on investments and to increase its capital. Finally, this Part repeals the Debt Servicing and Reduction Account Act and provides that it does not apply to the 2002-2003 or any later fiscal year.

Part 6 amends the Air Travellers Security Charge Act to reduce the air travellers security charge for domestic air travel from $12 to $7 for one-way travel and from $24 to $14 for round-trip travel, applicable to air travel purchased on or after March 1, 2003.

Part 7 amends the Customs Tariff, Excise Act, 2001 and Excise Tax Act to implement tobacco tax increases proposed on June 17, 2002. The proposed amendments include increases in the taxes and duties on cigarettes, tobacco sticks and other manufactured tobacco, cigars, exported tobacco products, and tobacco products delivered to duty-free shops, sold as ships’ stores or imported by Canadian residents returning to Canada.

Part 8 amends the Excise Tax Act to implement measures relating to the fuel excise taxes imposed under Part III of that Act and the goods and services tax or harmonized sales tax (GST/HST) imposed under Part IX of that Act. With respect to excise taxes, Part 8 removes the 4-cent-per-litre federal excise tax on diesel fuel from bio-diesel fuel, from the bio-diesel portion of blended diesel fuel, and from the biomass-produced ethanol or methanol portion of blended diesel fuel, effective February 19, 2003. As well, it clarifies that no rebate of the excise tax on fuel is payable in respect of fuel taken out of the country in the fuel tank of a vehicle being driven across the border, applicable to rebate claims received by the Canada Customs and Revenue Agency on or after February 18, 2003. With respect to the GST/HST, it ensures that the supply of school transportation services by school authorities continues to be treated as an exempt activity and that the supply of municipal services by a private contractor to a municipality or government continues to be treated as taxable, in both cases effective from the date of first enactment of the respective provisions on December 17, 1990.

Part 9 enacts the First Nations Goods and Services Tax Act, which provides for the imposition by eligible first nations of a first nations goods and services tax (FNGST) on first nation lands. The FNGST would be payable by both aboriginals and non-aboriginals and would be identical to the 7-per-cent goods and services tax (GST) or the federal component of the harmonized sales tax (HST) that is imposed under Part IX of the Excise Tax Act. A first nation may enact a law that imposes an FNGST either under the authority granted by the First Nations Goods and Services Tax Act or under a power to enact a law that has been recognized or granted under another Act of Parliament or under an agreement that has been given effect by another Act of Parliament.

A key feature of the enactment is that it provides for the seamless operation of the GST/HST and an FNGST imposed by a first nation. Also, the enactment provides for the authority to enter into an administration agreement between the Government of Canada and the authorized body of a first nation respecting the collection and administration of the 7-per-cent first nations goods and services tax imposed under the law of a first nation and for the estimation and sharing of tax revenues between the Government of Canada and the first nation.

Part 10 enacts amendments to the Income Tax Act that

— increase the annual National Child Benefit Supplement through successive increases of $150 per child in July 2003, $185 in July 2005 and $185 in July 2006 (indexed after year of introduction);

— introduce, effective July 2003, a $1600 Child Disability Benefit as a supplement to the Canada Child Tax Benefit (with payments starting March 2004);

— increase, from $7,634 to $13,814 (indexed after 2003), the level of income used to determine the financial dependence of a child or grandchild for the purposes of the rollovers of RRSP and RRIF proceeds on the death of an annuitant;

— clarify the eligibility criteria for the Disability Tax Credit;

— expand the list of expenses eligible for the Medical Expense Tax Credit to include certain expenses for real-time captioning and note-taking services, and voice recognition software, and the incremental cost to individuals with celiac disease of acquiring gluten-free food products;

— increase the limits for tax-assisted retirement saving;

— expand the capital gains rollover for eligible small-business shares by eliminating the original investment limit and the reinvestment limit and allowing an eligible reinvestment to be made in the year of disposition of the original investment shares or within 120 days after the year;

— provide relieving measures concerning the deductibility of automobile expenses and the recognition of taxable benefits relating to automobiles;

— increase, to $300,000 from $200,000, in increments of $25,000 commencing in 2003, the annual amount of active business income of a small business corporation that is eligible for the special 12 per cent federal corporate income tax rate;

— eliminate the federal capital tax on large corporations over a period of 5 years and increase the threshold at which it begins to apply from $10,000,000 to $50,000,000 in 2004;

— extend the Mineral Exploration Tax Credit to the end of 2004;

— improve the application of the tax shelter rules to arrangements representing the deductibility of tax credits; and

— increase the amount of the Film or Video Production Services Tax Credit to 16 per cent from 11 per cent.

Part 10 also amends the Children’s Special Allowances Act as a consequence to add, with respect to special allowances payable for months that are after June 2003, a benefit parallel to the new $1600 Child Disability Benefit Supplement to the Canada Child Tax Benefit.

Part 11 amends the Excise Act, 2001, the non-GST/HST parts of the Excise Tax Act and the Income Tax Act to harmonize various accounting, interest, penalty and related administrative and enforcement provisions, generally applicable after June 2003.

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

SHORT TITLE

Marginal note:Short title

 This Act may be cited as the Budget Implementation Act, 2003.

PART 1DIAGNOSTIC AND MEDICAL EQUIPMENT

Marginal note:Payments to trust — equipment and training
  •  (1) The Minister of Finance may make direct payments, in an aggregate amount of not more than $1.5 billion, to a trust established to provide the provinces with funding for the purposes of acquiring diagnostic and medical equipment and related specialized staff training in order to improve access to publicly funded diagnostic and treatment services.

  • Marginal note:Provincial share

    (2) The amount that may be provided to a province under this section is to be determined in accordance with the terms of the trust indenture establishing the trust referred to in subsection (1).

  • Marginal note:Payments out of C.R.F.

    (3) Any amount payable under this section may be paid by the Minister out of the Consolidated Revenue Fund at the times and in the manner that the Minister considers appropriate.

PART 2R.S., c. F-8; 1995, c. 17, s. 45(1)AMENDMENTS TO THE FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS ACT

Marginal note:2001, c. 19, s. 1

 Paragraph 4(9)(a) of the Federal-Provincial Fiscal Arrangements Act is replaced by the following:

  • (a) the total amount of the fiscal equalization payments to all provinces as determined under this Part for any fiscal year in the period beginning on April 1, 2000 and ending on March 31, 2002

Marginal note:2000, c. 35, s. 5(2)

 Subsection 13(4) of the Act is replaced by the following:

  • Definition of “social programs”

    (4) In this section, “social programs” includes programs in respect of health, post-secondary education, social assistance and social services, including early childhood development, and early learning and child care services.

Marginal note:2000, c. 35, s. 6
  •  (1) Paragraph 14(f) of the Act is repealed.

  • Marginal note:2000, c. 35, s. 6

    (2) Paragraph 14(g) of the Act is amended by adding the word “and” at the end of subparagraph (ii) and by replacing subparagraphs (iii) to (v) with the following:

    • (iii) $4.325 billion for the fiscal year beginning on April 1, 2003; and

  • (3) Section 14 of the Act is amended by adding the following after paragraph (g):

    • (h) a cash contribution of $2.5 billion to be paid to the trust referred to in section 16.3.

 Section 15 of the Act is amended by adding the following after subsection (5):

  • Marginal note:Provincial share of cash contribution established under paragraph 14(h)

    (6) The portion of the cash contribution established under paragraph 14(h) that may be provided to a province is to be determined in accordance with the terms of the trust indenture establishing the trust referred to in section 16.3.

Marginal note:1999, c. 31, s. 238
  •  (1) The portion of paragraph 16(2)(a) of the French version of the Act after subparagraph (iii) is replaced by the following;

    égal au produit obtenu en multipliant par 13,5/(100-9,143) l’« impôt qu’il est par ailleurs tenu de payer en vertu de la présente partie », au sens du paragraphe 120(4) de la Loi de l’impôt sur le revenu, sur ces revenus;

  • Marginal note:1999, c. 31, s. 238

    (2) The portion of paragraph 16(2)(b) of the French version of the Act after subparagraph (iii) is replaced by the following;

    égal au produit obtenu en multipliant par 13,5/(100-9,143) l’« impôt qu’il est par ailleurs tenu de payer en vertu de la présente partie », au sens du paragraphe 120(4) de la Loi de l’impôt sur le revenu, sur ces revenus;

 The Act is amended by adding the following after section 16.2:

Marginal note:Payments to trust — Canada Health and Social Transfer supplement

16.3 The Minister may make direct payments, in an aggregate amount of not more than $2.5 billion, to a trust established to provide the provinces with funding for the purposes of relieving existing pressures in the health care system.

 The Act is amended by adding the following after section 23.2:

PART V.1CANADA HEALTH TRANSFER, CANADA SOCIAL TRANSFER AND HEALTH REFORM TRANSFER

Canada Health Transfer

Marginal note:Purposes

24. Subject to this Part and for the purpose of giving effect to the 2003 First Ministers’ Accord on Health Care Renewal, a Canada Health Transfer in the amounts referred to in subsection 24.1(1) is to be provided to the provinces for the purposes of

  • (a) maintaining the national criteria and conditions in the Canada Health Act, including those respecting public administration, comprehensiveness, universality, portability and accessibility, and the provisions relating to extra-billing and user charges; and

  • (b) contributing to providing the best possible health care system for Canadians and to making information about the health care system available to Canadians.

Marginal note:Amount
  • 24.1 (1) The Canada Health Transfer is to consist of

    • (a) a cash contribution of

      • (i) $12.65 billion for the fiscal year beginning on April 1, 2004,

      • (ii) $13 billion for the fiscal year beginning on April 1, 2005,

      • (iii) $13.4 billion for the fiscal year beginning on April 1, 2006, and

      • (iv) $13.75 billion for the fiscal year beginning on April 1, 2007; and

    • (b) the portion of the total equalized tax transfer for all provinces that is determined by multiplying the total equalized tax transfer for all provinces by the quotient, rounded to the nearest hundredth, that is obtained by dividing an amount equal to the cash contribution specified in subparagraph (a)(i) by an amount equal to the aggregate of the cash contributions specified in subparagraphs (a)(i) and 24.4(1)(a)(i).

  • Meaning of “total equalized tax transfer”

    (2) In subsection (1), “total equalized tax transfer” means the total equalized tax transfer as determined in accordance with subsection 24.7(1).

Marginal note:Provincial share

24.2 The cash contribution established under paragraph 24.1(1)(a) that may be provided to a province for each of the fiscal years mentioned in that paragraph is the amount determined by the formula

F x (K/L) - M

where

F 
is the total of the amounts established under paragraphs 24.1(1)(a) and (b) for the fiscal year;
K 
is the population of the province for the fiscal year;
L 
is the total of the population of all provinces for the fiscal year; and
M 
is the amount obtained by multiplying the total equalized tax transfer for the province as determined in accordance with subsection 24.7(1) by the quotient, rounded to the nearest hundredth, that is obtained by dividing an amount equal to the cash contribution specified in subparagraph 24.1(1)(a)(i) by an amount equal to the aggregate of the cash contributions specified in subparagraphs 24.1(1)(a)(i) and 24.4(1)(a)(i).

Canada Social Transfer

Marginal note:Purposes
  • 24.3 (1) Subject to this Part, a Canada Social Transfer in the amounts referred to in subsection 24.4(1) is to be provided to the provinces for the purposes of

    • (a) financing social programs in a manner that provides provincial flexibility;

    • (b) maintaining the national standard, set out in subsection 25.1(1), that no period of minimum residency be required or allowed with respect to social assistance; and

    • (c) promoting any shared principles and objectives that are developed under subsection (2) with respect to the operation of social programs.

  • Marginal note:Discussion with provinces

    (2) The Minister of Human Resources Development shall invite representatives of all the provinces to consult and work together to develop, through mutual consent, a set of shared principles and objectives for social programs that could underlie the Canada Social Transfer.

  • Definition of “social programs”

    (3) In this section, “social programs” includes programs in respect of post-secondary education, social assistance and social services, including early childhood development, and early learning and child care services.

Marginal note:Amount
  • 24.4 (1) The Canada Social Transfer is to consist of

    • (a) a cash contribution of

      • (i) $7.75 billion for the fiscal year beginning on April 1, 2004,

      • (ii) $75 million for the fiscal year beginning on April 1, 2004,

      • (iii) $8.15 billion for the fiscal year beginning on April 1, 2005,

      • (iv) $8.5 billion for the fiscal year beginning on April 1, 2006, and

      • (v) $8.8 billion for the fiscal year beginning on April 1, 2007; and

    • (b) the portion of the total equalized tax transfer for all provinces that is determined by multiplying the total equalized tax transfer for all provinces by the quotient, rounded to the nearest hundredth, that is obtained by dividing an amount equal to the cash contribution specified in subparagraph (a)(i) by an amount equal to the aggregate of the cash contributions specified in subparagraphs (a)(i) and 24.1(1)(a)(i).

  • Meaning of “total equalized tax transfer”

    (2) In subsection (1), “total equalized tax transfer” means the total equalized tax transfer as determined in accordance with subsection 24.7(1).

Marginal note:Provincial share

24.5 The cash contribution established under paragraph 24.4(1)(a) that may be provided to a province for each of the fiscal years mentioned in that paragraph is the amount determined by the formula

F x (K/L) - M

where

F 
is the total of the amounts established under paragraphs 24.4(1)(a) and (b) for the fiscal year;
K 
is the population of the province for the fiscal year;
L 
is the total of the population of all provinces for the fiscal year; and
M 
is the amount obtained by multiplying the total equalized tax transfer for the province as determined in accordance with subsection 24.7(1) by the quotient, rounded to the nearest hundredth, that is obtained by dividing an amount equal to the cash contribution specified in subparagraph 24.4(1)(a)(i) by an amount equal to the aggregate of the cash contributions specified in subparagraphs 24.1(1)(a)(i) and 24.4(1)(a)(i).

Health Reform Transfer

Marginal note:Purposes
  • 24.6 (1) For the purpose of giving effect to the 2003 First Ministers’ Accord on Health Care Renewal and accelerating health care reform in the priority areas of primary health care, home care and catastrophic drug coverage, the Minister may make direct payments to the provinces to

    • (a) increase, in the case of primary health care, the number of residents of a province routinely receiving needed care from multi-disciplinary primary health care organizations or teams;

    • (b) provide, in the case of home care, first dollar coverage for a basket of services in the home and community for short-term acute home care, including acute community mental health and end-of-life care; and

    • (c) ensure, in the case of catastrophic drug coverage, that persons who are residents under provincial law do not suffer undue financial hardship as a result of needed drug therapy.

  • Marginal note:Payments

    (2) The amounts that may be paid under this section are

    • (a) $1 billion for the fiscal year beginning on April 1, 2003;

    • (b) $1.5 billion for the fiscal year beginning on April 1, 2004;

    • (c) $3.5 billion for the fiscal year beginning on April 1, 2005;

    • (d) $4.5 billion for the fiscal year beginning on April 1, 2006; and

    • (e) $5.5 billion for the fiscal year beginning on April 1, 2007.

  • Marginal note:Provincial share

    (3) The amount that may be paid to a province for each of the fiscal years mentioned in subsection (2) is the amount determined by multiplying the amount set out for that fiscal year by the quotient obtained by dividing

    • (a) the population of the province for the fiscal year

    by

    • (b) the total of the population of all provinces for the fiscal year.

Total Equalized Tax Transfer

Marginal note:Total equalized tax transfer
  • 24.7 (1) The total equalized tax transfer applicable to a province for a fiscal year is the aggregate of

    • (a) the total amount, as determined by the Minister, for the fiscal year represented by the federal income tax reduction in the province in respect of the Canada Health Transfer and the Canada Social Transfer for the fiscal year, and

    • (b) the amount equal to the lesser of

      • (i) the equalization payment that would be payable to the province for the fiscal year under Part I, and

      • (ii) the amount of equalization that would be paid to the province in respect of the federal income tax reduction in all the provinces in respect of the Canada Health Transfer and the Canada Social Transfer for the fiscal year, if the method of calculation of fiscal equalization payments as set out in Part I, excluding subsection 4(6), were to be applied to the value of the income tax reduction in all the provinces in respect of the Canada Health Transfer and the Canada Social Transfer for the fiscal year, except that

        • (A) for the purposes of the calculation under this subparagraph, the relevant revenue bases are to be determined in the prescribed manner, and

        • (B) where subsection 4(6) applies in the determination of the fiscal equalization payment to the province for the fiscal year, the amount determined under this subparagraph is to be adjusted in the prescribed manner.

  • Marginal note:Federal income tax reduction

    (2) For the purposes of subsection (1), the amount represented by the federal income tax reduction in a province in respect of the Canada Health Transfer and the Canada Social Transfer for a fiscal year is an amount equal to the aggregate of

    • (a) seventy-five per cent of the amount, as determined by the Minister, that would be derived from a tax, computed in accordance with the Income Tax Act,

      • (i) on the incomes, other than incomes from businesses, of individuals resident in the province on the last day of the taxation year ending in the fiscal year, within the meaning of the Income Tax Act,

      • (ii) on the incomes, other than incomes from businesses, earned in the province in the taxation year ending in the fiscal year by individuals not resident in Canada at any time during the taxation year, within the meaning of the Income Tax Act, and

      • (iii) on the incomes from businesses earned in the province in the taxation year ending in the fiscal year by individuals, within the meaning of the Income Tax Act,

      equal to the product obtained by multiplying 13.5/(100-9.143) by the “tax otherwise payable under this Part”, within the meaning assigned by subsection 120(4) of the Income Tax Act, on those incomes,

    • (b) twenty-five per cent of the amount, as determined by the Minister, that would be derived from a tax, computed in accordance with the Income Tax Act,

      • (i) on the incomes, other than incomes from businesses, of individuals resident in the province on the last day of the taxation year beginning in the fiscal year, within the meaning of the Income Tax Act,

      • (ii) on the incomes, other than incomes from businesses, earned in the province in the taxation year beginning in the fiscal year by individuals not resident in Canada at any time during the taxation year, within the meaning of the Income Tax Act, and

      • (iii) on the incomes from businesses earned in the province in the taxation year beginning in the fiscal year by individuals, within the meaning of the Income Tax Act,

      equal to the product obtained by multiplying 13.5/(100-9.143) by the “tax otherwise payable under this Part”, within the meaning assigned by subsection 120(4) of the Income Tax Act, on those incomes,

    • (c) seventy-five per cent of the amount, as determined by the Minister, that would be derived from a tax, computed in accordance with the Income Tax Act, on the income earned in the province by each corporation, other than a non-resident-owned investment corporation within the meaning of that Act or a corporation named in Schedule III to the Financial Administration Act, or a wholly-owned subsidiary within the meaning of that Act of a corporation so named, that is an agent of Her Majesty in right of Canada, that maintained a permanent establishment in the province at any time during its taxation year ending in the calendar year that ends in the fiscal year, at the rate of one per cent of its taxable income earned in the province in that taxation year, and

    • (d) twenty-five per cent of the amount, as determined by the Minister, that would be derived from a tax, computed in accordance with the Income Tax Act, on the income earned in the province by each corporation, other than a non-resident-owned investment corporation within the meaning of that Act or a corporation named in Schedule III to the Financial Administration Act, or a wholly-owned subsidiary within the meaning of that Act of a corporation so named, that is an agent of Her Majesty in right of Canada, that maintained a permanent establishment in the province at any time during its taxation year ending in the calendar year that begins in the fiscal year, at the rate of one per cent of its taxable income earned in the province in that taxation year.

Payments

Marginal note:Payments out of C.R.F.

24.8 Any amount payable under this Part may be paid by the Minister out of the Consolidated Revenue Fund at the times and in the manner that may be prescribed.

Reduction or Withholding

Marginal note:Definitions

24.9 The following definitions apply in sections 25 to 25.5.

“Minister”

« ministre »

“Minister” means the Minister of Human Resources Development.

“social assistance”

« assistance sociale »

“social assistance” means aid in any form to or in respect of a person in need.

Marginal note:Reduction or withholding — Canada Health Transfer and Canada Social Transfer

25. The cash contribution that may be provided to a province under section 24.2 or 24.5 or subsection 24.6(3) is to be reduced or withheld for the purposes of giving effect to

  • (a) any order made by the Governor in Council in respect of the province under section 15 or 16 of the Canada Health Act or, in the case of a cash contribution under section 24.5, section 25.3 or 25.4 of this Act; or

  • (b) any deduction from the cash contribution under section 20 of the Canada Health Act.

Marginal note:Criteria for eligibility
  • 25.1 (1) In order that a province may qualify for a full cash contribution under sections 24.2 and 24.5 and subsection 24.6(3) for a fiscal year, the laws of the province must not

    • (a) require or allow a period of residence in the province or Canada to be set as a condition of eligibility for social assistance or for the receipt or continued receipt of social assistance; or

    • (b) make or allow the amount, form or manner of social assistance to be contingent on a period of such residence.

  • Marginal note:Exception

    (2) The criteria in subsection (1) are not contravened by a requirement of a health insurance plan of a province of a minimum period of residence in the province or waiting period that does not contravene paragraph 11(1)(a) of the Canada Health Act.

Marginal note:Referral to Governor in Council
  • 25.2 (1) Subject to subsection (3), if the Minister, after consultation in accordance with subsection (2) with the minister responsible for social assistance in a province, is of the opinion that the province does not or has ceased to comply with section 25.1 and the province has not given an undertaking satisfactory to the Minister to remedy the non-compliance within a period that the Minister considers reasonable, the Minister must refer the matter to the Governor in Council.

  • Marginal note:Consultation process

    (2) Before referring a matter to the Governor in Council under subsection (1) in respect of a province, the Minister must

    • (a) send by registered mail to the minister responsible for social assistance in the province a notice of concern with respect to any problem foreseen;

    • (b) seek any additional information available from the province with respect to the problem through bilateral discussions, and make a report to the province within ninety days after sending the notice of concern; and

    • (c) if requested by the province, meet within a reasonable time to discuss the report.

  • Marginal note:Exception

    (3) The Minister may act under subsection (1) without consultation if he or she is of the opinion that a sufficient time has expired after reasonable efforts to achieve consultation were made and that consultation will not be achieved.

Marginal note:Order reducing or withholding contribution
  • 25.3 (1) If the Governor in Council, on the referral of a matter under section 25.2, is of the opinion that the province does not or has ceased to comply with section 25.1, the Governor in Council may, by order,

    • (a) direct that any cash contribution under section 24.2 or 24.5 or subsection 24.6(3) to that province for a fiscal year be reduced, in respect of each non-compliance, by an amount that the Governor in Council considers to be appropriate, having regard to the gravity of the non-compliance; or

    • (b) if the Governor in Council considers it appropriate, direct that the whole of any cash contribution under section 24.2 or 24.5 or subsection 24.6(3) to that province for a fiscal year be withheld.

  • Marginal note:Amending orders

    (2) The Governor in Council may, by order, repeal or amend any order made under subsection (1) if the Governor in Council is of the opinion that the repeal or amendment is warranted in the circumstances.

  • Marginal note:Copy of order

    (3) A copy of each order made under this section together with a statement of any findings on which the order was based must be sent without delay by registered mail to the government of the province concerned, and the Minister must have the order and statement laid before each House of Parliament on any of the first fifteen days on which that House is sitting after the order is made.

  • Marginal note:Commencement of order

    (4) An order made under subsection (1) does not come into force earlier than thirty days after a copy of the order has been sent to the government of the province concerned under subsection (3).

Marginal note:Reimposition of reductions or withholdings

25.4 In the case of a continuing failure to comply with section 25.1, any reduction or withholding under section 25.3 of a cash contribution to a province for a fiscal year must be reimposed for each succeeding fiscal year as long as the Minister is satisfied, after consultation with the minister responsible for social assistance in the province, that the non-compliance is continuing.

Marginal note:When reduction or withholding imposed

25.5 Any reduction or withholding under section 25.3 or 25.4 of a cash contribution may be imposed in the fiscal year in which the non-compliance that gave rise to the reduction or withholding occurred or in the following fiscal year.

Additional Withholding and Deduction

Definition of “federal payment”

  • 25.6 (1) In this section, “federal payment”, in respect of a province, means a payment by Canada to the province under this or any other Act of Parliament or any fiscal arrangement or agreement between Canada and the province, whether enacted or entered into before or after the coming into force of this section.

  • Marginal note:Additional withholding or reduction

    (2) If the Governor in Council makes an order under subsection 15(1) of the Canada Health Act or subsection 25.3(1) of this Act directing, in respect of a fiscal year, the withholding of an amount that, but for this section, would exceed the amount that could be withheld under that subsection, the Governor in Council may, in that order, deem any federal payment to the province to be, despite any provision of the Act, arrangement or agreement under which the federal payment is made, a cash contribution to that province for that fiscal year for the purpose of a reduction by, or a withholding of, the excess amount under either of those subsections, under section 16 or 17 of the Canada Health Act or under section 25.4 or 25.5 of this Act.

  • Marginal note:Additional deduction

    (3) If the amount to be deducted under subsection 20(1) or (2) of the Canada Health Act for a fiscal year exceeds the amount from which it is to be deducted, the Governor in Council may, by order, deem any federal payment to the province to be, despite any provision in the Act, arrangement or agreement under which the federal payment is made, a cash contribution to that province for that fiscal year for the purpose of deducting the excess amount under that subsection or section 21 of that Act.

References in Other Acts

Marginal note:References in other Act

25.7 Every reference to “Canada Health and Social Transfer” in any other Act of Parliament is to be read as a reference

  • (a) until March 31, 2004, to “Canada Health and Social Transfer and the Health Reform Transfer”; and

  • (b) after that date, to “Canada Health Transfer, the Canada Social Transfer and the Health Reform Transfer”.

Report

Marginal note:Report by Ministers

25.8 The Minister, the Minister of Health and the Minister of Human Resources Development may, together or individually, prepare a report on the administration and operation of this Part and have the report laid before each House of Parliament.

 
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