Federal-Provincial Fiscal Arrangements Act, 1972 (S.C. 1972, c. 8)

Short Title

Marginal note:Short title

1 This Act may be cited as the Federal-Provincial Fiscal Arrangements Act, 1972.

Interpretation

Marginal note:Definitions

2 In this Act,

fiscal year

fiscal year means the period commencing with the 1st day of April in one year and ending with the 31st day of March in the next following year; (année financière)

former Act

former Act means the Federal-Provincial Fiscal Arrangements Act, chapter F-6 of the Revised Statutes of Canada, 1970; (ancienne loi)

Income Tax Act

Income Tax Act means the Income Tax Act of Canada; (Loi de l’impôt sur le revenu)

Minister

Minister means the Minister of Finance; (Ministre)

prescribed

prescribed means prescribed by the regulations; (prescrit)

province

province does not include the Northwest Territories or the Yukon Territory. (province)

PART IProvincial Revenue Equalization Payments

Marginal note:Provincial revenue equalization payments

3 Subject to this Act, the Minister may pay to a province, for each fiscal year in the period commencing with the 1st day of April, 1972 and ending with the 31st day of March, 1977, a provincial revenue equalization payment not exceeding the amount computed in accordance with section 4.

Marginal note:Calculation of payments

• 4 (1) The provincial revenue equalization payment that may be paid to a province for a fiscal year is an amount determined by the Minister in accordance with the following rules:

  • (a) determine the proportion, as a percentage, that the population of the province for the fiscal year is of the population of all the provinces for the fiscal year;

  • (b) determine the proportion, as a percentage, that the revenue base for each revenue source for the province for the fiscal year is of the revenue base for that revenue source for all the provinces for the fiscal year;

  • (c) determine the difference between the population percentage determined under paragraph (a) and, for each revenue source for the province for the fiscal year, the revenue base percentage determined under paragraph (b) (which difference, in the event that the population percentage so determined exceeds for any such revenue source the revenue base percentage determined under paragraph (b), is referred to in this subsection as a “fiscal capacity deficiency” with respect to that revenue source and, in any other event, is referred to in this subsection as a “fiscal capacity excess” with respect thereto);

  • (d) determine the aggregate of the products obtained by multiplying, for each revenue source for the fiscal year with respect to which the province has a fiscal capacity deficiency, the total revenue from that revenue source for all the provinces for the fiscal year by the fiscal capacity deficiency of the province for the fiscal year with respect to that revenue source;

  • (e) determine the aggregate of the products obtained by multiplying, for each revenue source for the fiscal year with respect to which the province has a fiscal capacity excess, the total revenue from that revenue source for all the provinces for the fiscal year by the fiscal capacity excess of the province for the fiscal year with respect to that revenue source;

  and the amount, if any, by which the amount determined under paragraph (d) exceeds the amount determined under paragraph (e) is the provincial revenue equalization payment that may be paid to the province for the fiscal year.

• Marginal note:Allocation of total revenues to be equalized among all revenue sources

  (2) The Minister shall, for each fiscal year, allocate the total revenues to be equalized for the fiscal year among all revenue sources in such a manner that the aggregate of the total revenues derived by all the provinces for the fiscal year from each of those revenue sources is equal to the total revenues to be equalized for the fiscal year.

• Marginal note:Definitions

  (3) In this section,

  revenue base

  revenue base for a revenue source for a province for a fiscal year has the meaning given to that expression by the regulations; (assiette)

  revenue source

  revenue source means any of the following sources from which provincial revenues are or may be derived, namely:

  • (a) personal income taxes,

  • (b) corporation income taxes,

  • (c) general and miscellaneous sales taxes, tobacco taxes and amusement taxes,

  • (d) motive fuel taxes,

  • (e) motor vehicle licensing revenues,

  • (f) alcoholic beverage revenues including profits of provincial liquor boards,

  • (g) hospital and medical care insurance premiums,

  • (h) succession duties and gift taxes,

  • (i) race track taxes,

  • (j) forestry revenues,

  • (k) revenues identifiable as oil revenues and consisting of royalties, licences, taxes, rentals, levies and payments or remittances of any kind that are derived in respect of mineral rights owned by the Crown in right of the province,

  • (k.1) revenues identifiable as oil revenues and consisting of licences, taxes, rentals, levies and payments or remittances of any kind that are derived in respect of mineral rights held otherwise than by the Crown in right of the province,

  • (l) revenues identifiable as natural gas revenues and consisting of royalties, licences, taxes, rentals, levies and payments or remittances of any kind that are derived in respect of mineral rights owned by the Crown in right of the province,

  • (l.1) revenues identifiable as natural gas revenues and consisting of licences, taxes, rentals, levies and payments or remittances of any kind that are derived in respect of mineral rights that are held otherwise than by the Crown in right of the province,

  • (m) sales of Crown leases and reservations on oil and natural gas lands,

  • (n) oil and gas revenues, other than those described in paragraphs (k), (k.1), (l), (l.1) and (m),

  • (o) metallic and non-metallic mineral revenues,

  • (p) water power rentals,

  • (q) payroll taxes, taxes on premiums receivable by insurance companies, real property taxes and other miscellaneous provincial taxes,

  • (r) miscellaneous revenues from natural resources, concessions and franchises, sales of provincial goods and services, remittances from government enterprises (other than provincial liquor boards) and other miscellaneous provincial revenues except remittances in respect of oil or natural gas revenues,

  • (s) revenues of the Government of Canada from any of the sources referred to in paragraph (a) to (r) that are shared by Canada with the provinces, and

  • (t) school purpose taxes,

  except that any description of a revenue source as set out in paragraph (q), (r) or (s) may be revised or altered by the regulations so as to constitute two or more separate revenue sources; (source de revenu)

  total revenue

  total revenue from a revenue source for all the provinces for a fiscal year means the total revenue derived by all the provinces for the fiscal year from that revenue source as determined by the Minister pursuant to an allocation under subsection (2); (revenu total)

  total revenues to be equalized

  total revenues to be equalized for a fiscal year means the total revenues, as determined by the Minister, derived by all the provinces for the fiscal year from all revenue sources, except that

  • (a) in the case of succession duties and gift taxes, the revenue therefrom for all the provinces for the fiscal year shall be deemed to be

    • (i) for the fiscal year commencing with April 1, 1972, the revenue therefrom for all the provinces for that fiscal year,

    • (ii) for the fiscal year commencing with April 1, 1973, the average of the revenues therefrom for all the provinces for that fiscal year and for the immediately preceding fiscal year, and

    • (iii) for any other fiscal year, the average of the revenues therefrom for all the provinces for that fiscal year and for each of the two immediately preceding fiscal years,

  • (b) in the case of sales of Crown leases and reservations on oil and natural gas lands, the revenue therefrom for all the provinces for the fiscal year shall be deemed to be the average of the revenues therefrom, as computed for the purpose of paragraph (d) where applicable, for all the provinces for that fiscal year and for each of the two immediately preceding fiscal years,

  • (c) in the case of personal income taxes and corporation income taxes, the Minister may deduct from the amount that, but for this paragraph, would be the revenue therefrom for all the provinces for the fiscal year, the amount, as estimated by him, by which the revenues derived by Canada under the Income Tax Act from personal income taxes for the taxation year ending in the fiscal year and from corporation income taxes for taxation years ending in the calendar year that ends in the fiscal year, are less than the revenues that would have been derived by Canada thereunder from those taxes if no special abatement of those taxes had been provided under the Income Tax Act or any other Act of the Parliament of Canada for the purpose of facilitating the financing by a province of certain prescribed programs, and

  • (d) in the case of the revenue sources described in paragraphs (k), (k.1), (l), (l.1), (m) and (n) of the definition revenue source, the revenue from each such source for all the provinces for the fiscal year shall be deemed to be an amount equal to the aggregate of

    • (i) the basic revenue from each such revenue source for all the provinces for the fiscal year, and

    • (ii) one-third of the additional revenue from each such revenue source for all the provinces for the fiscal year. (revenus totaux devant faire l’objet de la péréquation)

• Marginal note:Determination of population

  (4) For the purposes of this section, the population of a province

  • (a) for a fiscal year in which a census thereof was taken, is the population as ascertained by the census, and

  • (b) for any other fiscal year, is the population as of the 1st day of June in that year as finally determined by the Chief Statistician of Canada following the next ensuing census.

• Marginal note:Basic revenue determined

  (4.1) For the purposes of this section,

  • (a) in the case of the revenue source described in paragraph (k) of the definition revenue source, the basic revenue from that revenue source for all the provinces for a particular fiscal year is the amount, as determined by the Minister but subject to subsection (4.3), that is equal to the product obtained when the actual revenue of all the provinces for the fiscal year commencing on April 1, 1973 that would have been allocated to that revenue source if the definition revenue source set out in this Act as it applied to that particular fiscal year had applied to the fiscal year commencing on April 1, 1973, is multiplied by

    • (i) the quotient obtained when the number representing the volume of the marketable production of crude oil, synthetic crude oil and condensate in all the provinces for the calendar year ending in that particular fiscal year from lands for which the mineral rights are owned by the Crown in right of any province is divided by the number representing the volume of the marketable production of crude oil, synthetic crude oil and condensate in all the provinces for the 1973 calendar year from lands for which the mineral rights are owned by the Crown in right of any province, or

    • (ii) one, if the quotient obtained under subparagraph (i) is less than one;

  • (b) in the case of the revenue source described in paragraph (k.1) of the definition revenue source, the basic revenue from that revenue source for all the provinces for a particular fiscal year is the amount, as determined by the Minister but subject to subsection (4.3), that is equal to the product obtained when the actual revenue of all the provinces for the fiscal year commencing on April 1, 1973 that would have been allocated to that revenue source if the definition revenue source set out in this Act as it applied to that particular fiscal year had applied to the fiscal year commencing on April 1, 1973, is multiplied by

    • (i) the quotient obtained when the number representing the volume of the marketable production of crude oil, synthetic crude oil and condensate in all the provinces for the calendar year ending in that particular fiscal year from lands for which the mineral rights are held otherwise than by the Crown is divided by the number representing the volume of the marketable production of crude oil, synthetic crude oil and condensate in all the provinces for the 1973 calendar year from lands for which the mineral rights are held otherwise than by the Crown, or

    • (ii) one, if the quotient obtained under subparagraph (i) is less than one;

  • (c) in the case of the revenue source described in paragraph (l) of the definition revenue source, the basic revenue from that revenue source for all the provinces for a particular fiscal year is the amount, as determined by the Minister but subject to subsection (4.3), that is equal to the product obtained when the actual revenue of all the provinces for the fiscal year commencing on April 1, 1973 that would have been allocated to that revenue source if the definition revenue source set out in this Act as it applied to that particular fiscal year had applied to the fiscal year commencing on April 1, 1973, is multiplied by

    • (i) the quotient obtained when the number representing the volume of net production withdrawals of natural gas in all the provinces for the calendar year ending in that particular fiscal year from lands for which the mineral rights are owned by the Crown in right of any province is divided by the number representing the volume of the net production withdrawals of natural gas in all the provinces for the 1973 calendar year from lands for which the mineral rights are owned by the Crown in right of any province, or

    • (ii) one, if the quotient obtained under subparagraph (i) is less than one;

  • (d) in the case of the revenue source described in paragraph (l.1) of the definition revenue source, the basic revenue from that revenue source for all the provinces for a particular fiscal year is the amount, as determined by the Minister but subject to subsection (4.3), that is equal to the product obtained when the actual revenue of all the provinces for the fiscal year commencing on April 1, 1973 that would have been allocated to that revenue source if the definition revenue source set out in this Act as it applied to that particular fiscal year had applied to the fiscal year commencing on April 1, 1973, is multiplied by

    • (i) the quotient obtained when the number representing the volume of net production withdrawals of natural gas in all the provinces for the calendar year ending in that particular fiscal year from lands for which the mineral rights are held otherwise than by the Crown is divided by the number representing the volume of the net production withdrawals of natural gas in all the provinces for the 1973 calendar year from lands for which the mineral rights are held otherwise than by the Crown, or

    • (ii) one, if the quotient obtained under subparagraph (i) is less than one; and

  • (e) in the case of a revenue source described in paragraph (m) or (n) of the definition revenue source, the basic revenue from that revenue source for all the provinces for a particular fiscal year is the amount, as determined by the Minister but subject to subsection (4.3), that is equal to the product obtained when the actual revenue of all the provinces for the fiscal year commencing on April 1, 1973 that would have been allocated to that revenue source if the definition revenue source set out in this Act as it applied to that particular fiscal year had applied to the fiscal year commencing on April 1, 1973, is multiplied by

    • (i) the quotient obtained when the number representing the aggregate of the basic revenues for all the provinces for that particular fiscal year from the revenue sources described in paragraphs (k) and (l) of the definition revenue source is divided by the number representing the aggregate of the actual revenues that would have been allocated to those revenue sources for all the provinces for the fiscal year commencing on April 1, 1973 if the definition revenue source set out in this Act as it applied to that particular fiscal year had applied to the fiscal year commencing on April 1, 1973, or

    • (ii) one, if the quotient obtained under subparagraph (i) is less than one.

• Marginal note:Additional revenue determined

  (4.2) For the purposes of this section, the additional revenue from a revenue source for all the provinces for a particular fiscal year is the amount that is equal to

  • (a) the actual revenue derived by all the provinces in that fiscal year from that revenue source, as determined by the Minister,

  minus

  • (b) the basic revenue derived by all the provinces for that particular fiscal year from that revenue source.

• Marginal note:When actual revenue less than basic revenue

  (4.3) Where the actual revenue derived by all the provinces for a particular fiscal year from a revenue source is less than the basic revenue derived by all the provinces for that particular fiscal year from that revenue source as determined pursuant to subsection (4.1), the actual revenue shall be deemed to be the basic revenue derived by all the provinces for that particular fiscal year from that revenue source.

• Marginal note:Revenue from school purpose taxes

  (5) For the purposes of this Part, in the case of school purpose taxes set out in paragraph (t) of the definition revenue source in subsection (3),

  • (a) the aggregate of the revenue derived from that revenue source by each municipality, board, commission or other local authority in a province that has power to levy a school purpose tax shall be deemed to be revenue derived by the province from that revenue source; and

  • (b) the revenue derived by a province for a fiscal year from that revenue source shall be deemed to be the revenue derived within the province by the province from that revenue source for the financial year of each local authority described in paragraph (a) ending in that fiscal year.