Short Title

Marginal note:Short title

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

Interpretation

Marginal note:Definitions

• 2 (1) In this Act,

  aboriginal government

  gouvernement autochtone

  aboriginal government means an Indian, an Inuit or a Métis government or the council of the band, as defined in subsection 2(1) of the Indian Act; (gouvernement autochtone)

  administration agreement

  accord d’application

  administration agreement means an agreement between the Government of Canada and the government of a province or an aboriginal government under which

  • (a) the Government of Canada will administer and enforce an Act of the legislature of the province, or legislation made by an aboriginal government, that imposes a tax and will make payments to the province or the aboriginal government in respect of the taxes collected, in accordance with the terms and conditions of the agreement, or

  • (b) the government of the province will administer and enforce an Act of Parliament that imposes a tax and will make payments to the Government of Canada in respect of the taxes collected, in accordance with the terms and conditions of the agreement; (accord d’application)

  fiscal year

  exercice

  fiscal year means the period beginning on April 1 in one year and ending on March 31 in the next year; (exercice)

  former Act

  ancienne loi

  former Act means the Federal-Provincial Fiscal Arrangements Act, 1972, chapter 8 of the Statutes of Canada, 1972; (ancienne loi)

  Minister

  ministre

  Minister means the Minister of Finance; (ministre)

  prescribed

  prescrit

  prescribed means prescribed by regulations made by the Governor in Council pursuant to section 40; (prescrit)

  sales tax harmonization agreement

  accord d’harmonisation de la taxe de vente

  sales tax harmonization agreement means an agreement or arrangement entered into by the Minister on behalf of the Government of Canada and authorized, or ratified and confirmed, under Part III.1 including any amendments or variations to the agreement or arrangement that are authorized, or ratified and confirmed, under that Part; (accord d’harmonisation de la taxe de vente)

  tax collection agreement

  accord de perception fiscale

  tax collection agreement means an agreement between the Government of Canada and the government of a province pursuant to which the Government of Canada will collect, on behalf of the province, taxes that the province imposes on the incomes of individuals or corporations, or both, and will make payments to the province in respect of the taxes so collected in accordance with the terms and conditions of the agreement. (accord de perception fiscale)

• Definition of province

  (2) In Parts I, II and IV, province does not include Yukon, the Northwest Territories or Nunavut.

• Marginal note:Determination of population

  (3) For the purposes of this Act, the population of a province, or, before April 1, 1999, of the part of the Northwest Territories that became Nunavut or the part that remained as the Northwest Territories, for a fiscal year is the population of the province or the part for that fiscal year as determined by the Chief Statistician of Canada in the prescribed manner.

• Marginal note:Determination of gross domestic product

  (3.1) For the purposes of this Act, the gross domestic product of Canada for a calendar year is the gross domestic product of Canada for the year as determined by the Chief Statistician of Canada in prescribed manner.

• Marginal note:References to “Act”

  (4) In the definition administration agreement in subsection (1) and in Part III, a reference to an Act shall be read as a reference to an Act or a part thereof.

PART IFiscal Equalization Payments

Marginal note:Fiscal equalization payments

3 Subject to this Act, the Minister may pay to a province for each fiscal year in the period beginning on April 1, 1999 and ending on March 31, 2004 a fiscal equalization payment not exceeding the amount computed in accordance with section 4.

Marginal note:Computation of payments

• 4 (1) Subject to the provisions of this Part, the fiscal equalization payment that may be paid to a province for a fiscal year is the amount, as determined by the Minister, equal to the greater of

  • (a) the product obtained by multiplying

    • (i) the aggregate of the amounts obtained by subtracting, for each revenue source, the per capita yield in that province for the revenue source for that fiscal year from the average per capita yield of the provinces of Ontario, Quebec, British Columbia, Manitoba and Saskatchewan for the revenue source for that fiscal year

    by

    • (ii) the population of the province for that fiscal year, and

  • (b) zero.

• Marginal note:Payment for fiscal year 1999-2000

  (1.1) The fiscal equalization payment that may be paid to a province for the fiscal year beginning on April 1, 1999 is the amount, as determined by the Minister, equal to the greater of

  • (a) the aggregate of

    • (i) 20 per cent of the product obtained under paragraph (1)(a), and

    • (ii) 80 per cent of the amount that would have been that product had this Act and the Federal Provincial Fiscal Arrangements Regulations, as this Act and those Regulations read on March 31, 1999, applied, with such modifications as the circumstances required, in respect of the fiscal year beginning on April 1, 1999, and

  • (b) zero.

• Marginal note:Payment for fiscal year 2000-2001

  (1.2) The fiscal equalization payment that may be paid to a province for the fiscal year beginning on April 1, 2000 is the amount, as determined by the Minister, equal to the greater of

  • (a) the aggregate of

    • (i) 40 per cent of the product obtained under paragraph (1)(a), and

    • (ii) 60 per cent of the amount that would have been that product had this Act and the Federal Provincial Fiscal Arrangements Regulations, as this Act and those Regulations read on March 31, 1999, applied, with such modifications as the circumstances required, in respect of the fiscal year beginning on April 1, 2000, and

  • (b) zero.

• Marginal note:Payment for fiscal year 2001-2002

  (1.3) The fiscal equalization payment that may be paid to a province for the fiscal year beginning on April 1, 2001 is the amount, as determined by the Minister, equal to the greater of

  • (a) the aggregate of

    • (i) 60 per cent of the product obtained under paragraph (1)(a), and

    • (ii) 40 per cent of the amount that would have been that product had this Act and the Federal Provincial Fiscal Arrangements Regulations, as this Act and those Regulations read on March 31, 1999, applied, with such modifications as the circumstances required, in respect of the fiscal year beginning on April 1, 2001, and

  • (b) zero.

• Marginal note:Payment for fiscal year 2002-2003

  (1.4) The fiscal equalization payment that may be paid to a province for the fiscal year beginning on April 1, 2002 is the amount, as determined by the Minister, equal to the greater of

  • (a) the aggregate of

    • (i) 80 per cent of the product obtained under paragraph (1)(a), and

    • (ii) 20 per cent of the amount that would have been that product had this Act and the Federal Provincial Fiscal Arrangements Regulations, as this Act and those Regulations read on March 31, 1999, applied, with such modifications as the circumstances required, in respect of the fiscal year beginning on April 1, 2002, and

  • (b) zero.

• Marginal note:Definitions

  (2) In this section,

  national average rate of tax

  taux national moyen de l’impôt

  national average rate of tax in respect of a revenue source is the quotient obtained by dividing the aggregate of the revenues to be equalized for a revenue source for all provinces for a fiscal year by the revenue base for that revenue source for all provinces for that fiscal year; (taux national moyen de l’impôt)

  per capita yield

  rendement par tête

  per capita yield in respect of a province for a revenue source for a fiscal year is the quotient obtained by dividing the product of the national average rate of tax for that revenue source and the province’s revenue base for that revenue source for the fiscal year by the population of the province for that fiscal year; (rendement par tête)

  revenue base

  assiette

  revenue base for a revenue source for a province for a fiscal year relates to the measure of the relative capacity of the province to derive revenue from that revenue source for that fiscal year and has the meaning given to that expression by the regulations; (assiette)

  revenue source

  source de revenu

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

  • (a) personal income taxes,

  • (b) corporation income taxes, and revenues derived from government business enterprises that are not included in any other paragraph of this definition,

  • (c) taxes on capital of corporations,

  • (d) general and miscellaneous sales taxes, harmonized sales taxes, and amusement taxes,

  • (e) tobacco taxes,

  • (f) motive fuel taxes derived from the sale of gasoline,

  • (g) motive fuel taxes derived from the sale of diesel fuel,

  • (h) non-commercial motor vehicle licensing revenues,

  • (i) commercial motor vehicle licensing revenues,

  • (j) alcoholic beverage revenues,

  • (k) hospital and medical care insurance premiums,

  • (l) forestry revenues,

  • (m) conventional new oil revenues,

  • (n) conventional old oil revenues,

  • (o) heavy oil revenues,

  • (p) mined oil revenues,

  • (q) light and medium third tier oil,

  • (r) heavy third tier oil,

  • (s) revenues from domestically sold natural gas and exported natural gas,

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

  • (u) oil and gas revenues other than those described in paragraphs (m) to (t),

  • (v) mining revenues,

  • (w) water power rentals,

  • (x) insurance premium taxes,

  • (y) payroll taxes,

  • (z) provincial and local government property taxes,

  • (z.1) race track taxes,

  • (z.2) revenues from lottery ticket sales,

  • (z.3) revenues, other than those described in paragraphs (z.1) and (z.2), from games of chance,

  • (z.4) miscellaneous provincial taxes and revenues, provincial revenues from sales of goods and services, local government revenues from sales of goods and services, and miscellaneous local government taxes and revenues, and

  • (z.5) revenues of the Government of Canada from any of the sources referred to in this definition that are shared by Canada with the provinces; (source de revenu)

  revenue to be equalized

  revenu sujet à péréquation

  revenue to be equalized from a revenue source for a province for a fiscal year means the revenue, as determined by the Minister, derived by the province for the fiscal year from that revenue source. (revenu sujet à péréquation)

• Marginal note:Variation of definition revenue source

  (3) A description of a revenue source as set out in the definition revenue source in subsection (2) may, by regulation, be revised or altered in one or more of the following ways:

  • (a) so as to constitute two or more separate revenue sources;

  • (b) in a manner that results in the inclusion of all or any part of it in another description of a revenue source set out in that definition; and

  • (c) in a manner that results in the exclusion of any part of it from that definition.

• Marginal note:Deduction in computing revenue to be equalized from personal income taxes

  (4) In computing the revenue to be equalized from personal income taxes for all the provinces for a fiscal year, the Minister may deduct from the amount that, but for this subsection, would be the revenue to be equalized from that source 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 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 subsection 120(2) of the Income Tax Act or Part VI of this Act.

• Marginal note:Municipal property taxes and miscellaneous revenues and taxes

  (5) For the purpose of determining the revenue to be equalized derived by a province for a fiscal year,

  • (a) in the case of the part of the revenue source described in paragraph (z) of the definition revenue source in subsection (2) that consists of local government property taxes, the aggregate of the revenue derived from that part of the revenue source by each municipality, board, commission or other local authority in the province that has power to levy property taxes, for the financial year of each such local authority ending in the fiscal year, and

  • (b) in the case of the part of the revenue source described in paragraph (z.4) of the definition revenue source in subsection (2) that consists of local government revenues from sales of goods and services and miscellaneous local government taxes and revenues, the aggregate of the revenue derived from that part of the revenue source by each municipality, board, commission or other local authority in the province that has power to derive those revenues for the financial year of each such local authority ending in the fiscal year

  is deemed to be revenue derived by the province from those revenue sources for that fiscal year.

• Marginal note:Minimum payment to province in certain cases

  (6) Notwithstanding subsections (1) to (5) but subject to subsection (9), the fiscal equalization payment that may be paid to a province in respect of each fiscal year in the period beginning on April 1, 1999 and ending on March 31, 2004, if the province received a fiscal equalization payment in respect of the immediately preceding fiscal year, shall not be less than the greater of

  • (a) an amount equal to what the fiscal equalization payment in respect of the immediately preceding fiscal year would be if this subsection were disregarded, minus the threshold amount for the current fiscal year, and

  • (b) zero.

• Marginal note:Interpretation

  (7) The definitions in this subsection apply in this subsection and in subsection (6).

  national per capita equalization standard

  norme de péréquation nationale par tête

  national per capita equalization standard means the average per capita yield of the provinces of Ontario, Quebec, British Columbia, Manitoba and Saskatchewan for all revenue sources. (norme de péréquation nationale par tête)

  threshold amount

  montant déterminant

  threshold amount for a fiscal year, in relation to a province, is the product obtained by multiplying

  • (a) 1.6 per cent of the national per capita equalization standard for that fiscal year

  by

  • (b) the population of the province for either that fiscal year or the immediately preceding fiscal year, whichever is less. (montant déterminant)

• (8) [Repealed, R.S., 1985, c. 11 (3rd Supp.), s. 3]

• Marginal note:Maximum payment

  (9) Notwithstanding anything in this Part, where

  • (a) the total amount of the fiscal equalization payments to all provinces as determined under this Part for any fiscal year commencing with the fiscal year that begins on April 1, 2000

  exceeds

  • (b) the amount that would result if the amount of ten billion dollars were changed by the percentage change in Canada’s gross domestic product, as determined by the Chief Statistician of Canada in the prescribed manner, from the calendar year ending on December 31, 1999 to the calendar year ending in the fiscal year,

  the fiscal equalization payment to each province for the fiscal year shall be reduced by an amount equal to the product obtained by multiplying

  • (c) the total population of the province as of June 1 of the fiscal year

  by

  • (d) the quotient obtained by dividing the amount by which the amount referred to in paragraph (a) exceeds the amount referred to in paragraph (b) by the total population of all the provinces to which a fiscal equalization payment is made for that fiscal year.

• Marginal note:Adjustment of revenue to be equalized

  (10) Subject to subsection (11), in respect of fiscal years beginning on or after April 1, 1993, where a province that qualifies for a fiscal equalization payment under this Part in respect of the fiscal year has seventy per cent or more of the revenue base for all of the provinces in the fiscal year in respect of a revenue source described in the definition revenue source in subsection (2) or the description of which is revised or altered in accordance with subsection (3), the revenue to be equalized from that revenue source for all of the provinces in respect of the fiscal year is an amount equal to seventy per cent of the revenue as otherwise determined from that revenue source for all of the provinces in respect of the fiscal year.

• Marginal note:Election

  (11) In order for subsection (10) to apply in respect of the offshore minerals revenue included in the description set out in paragraph (z.5) of the definition revenue source in subsection (2) as revised or altered in accordance with subsection (3), a province that is eligible for a fiscal equalization offset payment in the fiscal year under the Canada — Nova Scotia Offshore Petroleum Resources Accord Implementation Act, or the Canada — Newfoundland Atlantic Accord Implementation Act, in respect of a fiscal year beginning on or after April 1, 1993 shall make an election, in the prescribed manner, before the end of the calendar year ending in the fiscal year.

• Marginal note:Effect of election under subsection (11)

  (12) Notwithstanding any provision of the Canada — Nova Scotia Offshore Petroleum Resources Accord Implementation Act or the Canada — Newfoundland Atlantic Accord Implementation Act, as the case may be, where a province makes the election described in subsection (11) for a fiscal year, the fiscal equalization offset payment that may otherwise be payable to the province under that Act, in respect of that fiscal year, is zero.

• (13) [Repealed, 1999, c. 11, s. 2]

PART IIFiscal Stabilization Payments to Provinces

Marginal note:Fiscal stabilization payment

5 Subject to this Act, the Minister may pay to a province, for each fiscal year that begins after March 31, 1987, a fiscal stabilization payment not exceeding the amount computed in accordance with section 6.

Marginal note:Computation of payments

• 6 (1) Subject to subsections (8) to (10), the fiscal stabilization payment that may be paid to a province for a fiscal year is the amount, if any, as determined by the Minister, by which

  • (a) ninety-five per cent of the revenue subject to stabilization of the province for the immediately preceding fiscal year

  exceeds

  • (b) the revenue subject to stabilization of the province for the fiscal year, adjusted in prescribed manner to offset the amount, as determined by the Minister, of any change in the revenue subject to stabilization of the province for the fiscal year resulting from changes made by the province in the rates or in the structures of provincial taxes or other modes of raising the revenue of the province referred to in paragraphs (a) to (y) and (z.1) to (z.3) of the definition revenue source in subsection 4(2) from the rates or structures in effect in the immediately preceding fiscal year.

• Marginal note:Interpretation

  (1.1) Where a province has entered into a tax collection agreement respecting either personal income tax or corporation income tax, a change to the Income Tax Act affecting, as the case may be, the amount defined as being tax otherwise payable under this Part, within the meaning assigned to that expression by subsection 120(4) of the Income Tax Act, or corporate taxable income within the meaning of that Act shall be deemed to be a change in the rates or in the structures of provincial taxes for the purposes of paragraph (1)(b).

• Marginal note:Definition of revenue subject to stabilization

  (2) With respect to a fiscal stabilization payment for a fiscal year that begins after March 31, 1987, in this section, revenue subject to stabilization of a province for a fiscal year means, in the case of the fiscal year beginning on April 1, 1986 and a fiscal year beginning on or after April 1, 1987, the aggregate of

  • (a) the total revenues, as determined by the Minister, derived by the province for the fiscal year from the revenue sources described in the definition revenue source in subsection 4(2), other than the revenue sources described in paragraphs (z) and (z.4) of that definition, and

  • (b) the fiscal equalization payment to the province for the fiscal year under Part I.

  • (c) [Repealed, 1995, c. 17, s. 47]

• (2.1) [Repealed, 1999, c. 11, s. 3]

• Marginal note:Certain revenues excluded

  (2.2) For the purpose of determining the fiscal stabilization payment that may be paid to a province for a fiscal year that begins on or after April 1, 1996,

  • (a) revenue subject to stabilization of a province for the fiscal year and for the immediately preceding fiscal year does not include the amounts referred to in paragraph (2)(c), as it read on March 31, 1996; and

  • (b) notwithstanding subsection (3), the following amounts shall be deducted from the amount otherwise determined under this section:

    • (i) the total equalized tax transfer to the province in respect of the Canada Health and Social Transfer, as determined in accordance with subsection 16(1), and in respect of established programs, as determined in accordance with subsection 16(1), as it read on March 31, 1996, and

    • (ii) the value of the additional tax abatement units in respect of the Canada Health and Social Transfer, as determined in accordance with subsection 27(2), and in respect of established programs, as determined in accordance with subsection 28(1), as it read on March 31, 1996.

• Marginal note:Revenue subject to stabilization

  (3) For the purpose of determining pursuant to subsection (2) the revenue subject to stabilization of a province for a fiscal year, subsection 4(4) applies, with such modifications as the circumstances require, in determining the revenue derived by the province for the fiscal year from personal income taxes, described in paragraph (a) of the definition revenue source in subsection 4(2) except that no deduction may be made in respect of the tax abatement units referred to in subsection 27(2).

• Marginal note:Revenues of a province

  (4) For the purposes of subsection (2), the revenue of a province for a fiscal year derived from the revenue source referred to in paragraph (a) of the definition revenue source in subsection 4(2) shall be deemed to be

  • (a) the total amount, determined in prescribed manner, of the provincial personal income taxes assessed or reassessed, not later than twenty-four months after the end of the fiscal year, in respect of the taxation year ending in the fiscal year

  minus

  • (b) the total amount, determined in prescribed manner, of the tax credits and rebates claimed by taxpayers in the province against provincial personal income taxes for that taxation year that have been deducted from those assessed or reassessed provincial personal income taxes.

• Marginal note:Idem

  (5) For the purposes of subsection (2), the revenue of a province for a fiscal year derived from that part of the revenue source described in paragraph (b) of the definition revenue source in subsection 4(2) that consists of corporation income taxes, shall be deemed to be

  • (a) the total amount, determined in prescribed manner, of the provincial corporation income taxes assessed or reassessed, not later than twenty-four months after the end of the fiscal year, in respect of the taxation year of corporations ending in the calendar year that ends in the fiscal year

  minus

  • (b) the total amount, determined in prescribed manner, of the tax credits and rebates claimed by taxpayers in the province against provincial corporation income taxes for that taxation year that have been deducted from those assessed or reassessed provincial corporation income taxes.

• Marginal note:Stabilization threshold re certain revenue sources

  (6) When, in computing the fiscal stabilization payment that may be paid to a province for a fiscal year pursuant to subsection (1), it is ascertained that

  • (a) the total revenues, as determined by the Minister, derived by the province for the immediately preceding fiscal year from the revenue sources described in paragraphs (l) to (w) of the definition revenue source in subsection 4(2) and the part of the revenue source described in paragraph (z.5) of that definition that relates to natural resources

  exceed

  • (b) the total revenues, as determined by the Minister, derived by the province for the fiscal year from the revenue sources described in paragraph (a), as adjusted in the manner referred to in paragraph (1)(b),

  notwithstanding any other provision of this section, in applying subsections (1) and (2) to determine the fiscal stabilization payment that may be paid to the province for the fiscal year, no amount, other than any amount by which the difference between the amount determined under paragraph (a) and the amount determined under paragraph (b) exceeds one-half of the amount determined under paragraph (a), shall be included in respect of the difference between the amount determined under paragraph (a) and the amount determined under paragraph (b).

• Marginal note:Application by province for payment

  (7) A fiscal stabilization payment may be paid to a province for a fiscal year only on receipt by the Minister, not later than eighteen months after the end of the fiscal year, of an application by the province therefor containing such information as may be prescribed.

• Marginal note:Limit of $60 per capita

  (8) Subject to subsection (9), for each fiscal year that begins after March 31, 1987, the fiscal stabilization payment that may be paid to a province shall not exceed the amount obtained by multiplying $60 by the population of that province on June 1 of that year, based on the most recent information that has been prepared by Statistics Canada for that year in accordance with the regulations.

• Marginal note:Loan

  (9) If the amount of the fiscal stabilization payment of a province calculated pursuant to subsections (1) to (7) exceeds the amount calculated in respect of the province pursuant to subsection (8) any amount of the difference between those amounts may, at the discretion of the Minister, be lent to the province on the prescribed terms and conditions and in prescribed manner.

• Marginal note:Repayment

  (10) Any amount lent pursuant to subsection (9) does not bear interest and shall be repaid, in prescribed manner, by the province before the expiration of the period of five years following the date the amount is lent or shall be recovered, in prescribed manner, from any amount that may become payable to the province pursuant to this Act within that period.

PART IIIAdministration Agreements

Marginal note:Administration agreement

• 7 (1) The Minister or the Minister of National Revenue, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into an administration agreement with the government of a province or an aboriginal government.

• Marginal note:Amending agreement

  (2) The Minister or the Minister of National Revenue, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into an agreement amending the terms and conditions of an administration agreement.

• Marginal note:Application of provincial laws

  (3) Where an Act of the legislature of a province in respect of which an administration agreement has been entered into and that imposes a tax contains provisions requiring every person making a payment of a specified kind to another person to deduct or withhold therefrom an amount, and to remit that amount on account of the tax, effect may be given to those provisions in relation to persons to whom those payments are made out of the Consolidated Revenue Fund or by an agent of Her Majesty in right of Canada.

• Marginal note:Depositing payments

  (4) A government that is a party to an administration agreement in respect of an Act may, in accordance with the terms and conditions of the agreement and, if the Act is the Act of the legislature of a province, subject to the law of the province, deposit to an account under its control any form of payment, including a cheque or money order, received in the course of administering and enforcing the Act, that is payable to the government that is the other party to the administration agreement.

Marginal note:Set-offs — provincial Act

• 7.1 (1) Where the Government of Canada has entered into an administration agreement in respect of an Act of the legislature of a province, the federal Minister who, pursuant to the administration agreement, is responsible for the administration and enforcement of the Act may, subject to the law of the province and in accordance with the terms and conditions of the agreement, apply any amount that is payable to a person under that Act, for the purpose of reducing the amount that is, or may become, payable by that person under any Act of the legislature of the province or any Act of Parliament.

• Marginal note:Set-offs — federal Act

  (2) Where the government of a province has entered into an administration agreement in respect of an Act of Parliament, the provincial Minister who, pursuant to the administration agreement, is responsible for the administration and enforcement of the Act may, in accordance with the terms and conditions of the agreement, apply any amount that is payable to a person under that Act, for the purpose of reducing the amount that is, or may become, payable by that person under any Act of the legislature of the province that imposes a tax or any Act of Parliament.

Marginal note:Assignment of amount owed

7.2 Subject to section 7.1, where an amount is owed by a government to a person under an Act in respect of which an administration agreement has been entered into, that person may direct that the amount be applied, in accordance with the terms and conditions of the administration agreement, against any amount that is payable by that person under

• (a) an Act of Parliament, if the money is owed by the government under an Act of the legislature of the province; or

• (b) an Act of the legislature of the province, if the money is owed by the government under an Act of Parliament.

Marginal note:Payments

7.3 Notwithstanding any other Act of Parliament, any amount that is payable by a person under an Act of Parliament in respect of which an administration agreement has been entered into may be remitted by that person to the government of the province that is a party to the administration agreement.

Marginal note:Net remittance — province

• 7.4 (1) Notwithstanding any other enactment, where an administration agreement has been entered into in respect of an Act of Parliament, the government of the province that is a party to the administration agreement may reduce the remittance to Canada of any amount it has collected on behalf of Canada pursuant to the administration agreement by any amount it has paid to a person on behalf of Canada, in accordance with the terms and conditions of the administration agreement.

• Marginal note:Net remittance — Canada

  (2) Notwithstanding any other enactment, where an administration agreement has been entered into in respect of an Act of the legislature of a province, the Government of Canada may, subject to the law of the province, reduce the remittance to the province of any amount it has collected on behalf of the province pursuant to the administration agreement by any amount it has paid to a person on behalf of the province, in accordance with the terms and conditions of the administration agreement.

Marginal note:Advance payments under agreements

8 Where the government of a province or an aboriginal government has entered into an administration agreement, the Minister, in accordance with the regulations, may make advance payments to the province or the aboriginal government out of the Consolidated Revenue Fund on account of any amount that may become payable to the province or the aboriginal government pursuant to the administration agreement.

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

• 8.1 (1) Subject to subsection (2), where an administration agreement has been entered into in respect of an Act of the legislature of a province or in respect of legislation made by an aboriginal government, payments may be made to a person out of the Consolidated Revenue Fund on account of any amount that is payable to that person under that Act or legislation, in accordance with the terms and conditions of the administration agreement.

• Marginal note:Advances from the C.R.F.

  (2) Where no amount is held on behalf of the province or aboriginal government from which a payment under subsection (1) may be made, or the amount of the payment exceeds the amount so held, payment pursuant to subsection (1) may be made as a recoverable advance from the Consolidated Revenue Fund if the repayment of the amount or the excess by the government of the province or the aboriginal government is provided for in the administration agreement.

PART III.1Sales Tax Harmonization Agreements

Marginal note:Definition of sales taxes

• 8.2 (1) In this Part, sales taxes means the taxes imposed under Part IX of the Excise Tax Act and taxes levied under Acts of the legislature of a province in respect of supplies of property or services.

• Marginal note:Meanings in Part IX to apply

  (2) In this Part, property, service and supply have the meanings assigned by subsection 123(1) of the Excise Tax Act.

Marginal note:Sales tax harmonization agreement

• 8.3 (1) The Minister, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into an agreement or arrangement with the government of a province respecting sales taxes and, without restricting the generality of the foregoing, respecting

  • (a) the integration of sales taxes applicable in the province into taxes collected, administered and enforced under a single Act of Parliament;

  • (b) the collection of taxes applicable in the province, whether imposed under an Act of Parliament or levied under an Act of the legislature of the province, and the administration and enforcement of the Acts imposing the taxes;

  • (c) the provision to the Government of Canada by the government of the province, or to the government of the province by the Government of Canada, of information acquired in the administration and enforcement of Acts imposing taxes, Acts relating to the disclosure, displaying or advertisement of prices for property or services and Acts providing for rebates, refunds or reimbursements of sales taxes, paid or payable, or of amounts paid or payable as or on account of sales taxes, in respect of the supply, bringing into the province or importation of certain property or services;

  • (d) the accounting for taxes collected in accordance with the agreement;

  • (e) the implementation of the system of integration of the sales taxes contemplated under the agreement and the transition from the system of taxation administered before the agreement to the system of taxation contemplated under the agreement;

  • (f) payments, and the eligibility for payments, by the Government of Canada to the government of the province in respect of the revenues from, and the transitional costs incurred in converting to, the system of taxation contemplated under the agreement and to which the province is entitled under the agreement, the time when such payments will be made, and the remittance by the government of the province to the Government of Canada of any overpayments by the Government of Canada or the right of the Government of Canada to set off any overpayments against other amounts payable by the Government of Canada to the government of the province, whether under the agreement or any other agreement or arrangement or any Act of Parliament;

  • (g) the payment by the Government of Canada and its agents and subservient bodies, and by the government of the province and its agents and subservient bodies, of the sales taxes payable under the system of taxation contemplated under the agreement and the accounting for the sales taxes so paid;

  • (h) the compliance by the Government of Canada and its agents and subservient bodies, and by the government of the province and its agents and subservient bodies, with the Act of Parliament under which the system of taxation is administered and regulations made under that Act;

  • (i) the enactment, administration and enforcement of laws respecting the disclosure, display and advertisement of the prices for property and services in respect of the supply of which sales taxes are payable under the system of taxation contemplated under the agreement;

  • (j) the administration and enforcement of Acts of Parliament or the legislature of the province respecting the rebate, refund or reimbursement of sales taxes paid in respect of the supply, bringing into the province or importation of certain property or services; and

  • (k) other matters that relate to, and that are considered advisable for the purposes of implementing or administering, the system of taxation contemplated under the agreement.

• Marginal note:Amending agreements

  (2) The Minister, with the approval of the Governor in Council, may on behalf of the Government of Canada enter into an agreement with the government of a province amending or varying an agreement or arrangement with the province entered into under subsection (1) or this subsection or ratified and confirmed under section 8.7.

Marginal note:Payments to province

8.4 Where the Government of Canada has entered into a sales tax harmonization agreement with the government of a province, the federal Minister who, pursuant to the agreement, is responsible for the administration and enforcement of the system of taxation contemplated under the agreement may pay to a province out of amounts received in a fiscal year under Part IX of the Excise Tax Act

• (a) amounts determined in accordance with the agreement as provided, and at such times as are specified, in the agreement; and

• (b) subject to the regulations, advances in respect of the amounts referred to in paragraph (a).

Marginal note:Payments to other persons

• 8.5 (1) Subject to subsection (2), where, under a sales tax harmonization agreement, a federal Minister is responsible for the administration and enforcement of an Act of the legislature of a province respecting the refund, rebate or reimbursement to persons of sales taxes paid or payable by the persons, or of amounts paid or payable as or on account of sales taxes, in respect of the supply, bringing into the province or importation of certain property or services, that Minister may pay out of amounts received in a fiscal year under Part IX of the Excise Tax Act to a person an amount on account of any amount that is payable to the person under that Act in accordance with the agreement.

• Marginal note:Advances from Consolidated Revenue Fund

  (2) Where no amount is held on behalf of a province from which payment under subsection (1) may be made in accordance with a sales tax harmonization agreement with the province, or the amount of the payment exceeds the amount so held, payment under subsection (1) may be made as a recoverable advance out of amounts received in a fiscal year under Part IX of the Excise Tax Act if the repayment of the amount or excess by the government of the province is provided for in the sales tax harmonization agreement.

Marginal note:Statutory authority to make payments

8.6 Notwithstanding any other Act, the payments paid under a sales tax harmonization agreement under the authority of section 8.4 or 8.5 may be made without any other or further appropriation or authority.

Marginal note:Confirmation of past agreements, etc.

8.7 Agreements and arrangements that were entered into by the Minister after March 29, 1996, and that, if section 8.3 had been in force on and after that day, could have been authorized under that section, are, for greater certainty, ratified and confirmed and are deemed to have been entered into under that section and approved by the Governor in Council, and all actions taken and payments made under those agreements and arrangements after that day and before this Act is assented to are ratified and confirmed.

PART IVProvincial Personal Income Tax Revenue Guarantee Payments

Marginal note:Provincial tax revenue guarantee payments

9 In the event that amendments made to the Income Tax Act that

• (a) apply to a taxation year coinciding with a calendar year ending in a fiscal year occurring in the period beginning on April 1, 1999 and ending on March 31, 2004, and

• (b) were introduced in the House of Commons during the first taxation year to which they apply

would, in the opinion of the Minister, result in the reduction, by at least one per cent, of the total basic personal income tax revenue that would have been derived in a province for that taxation year, the Minister may, subject to this Part, pay to the province for that fiscal year a provincial personal income tax revenue guarantee payment not exceeding the amount computed in accordance with section 10.

Marginal note:When amendments introduced

9.1 For the purpose of section 9, an amendment made to the Income Tax Act that gives effect in whole or in part to a measure referred to in a Notice of Ways and Means Motion tabled in the House of Commons shall be deemed to have been introduced in the House of Commons when the first Notice of Ways and Means Motion in which the measure was referred to was tabled in the House of Commons.

Marginal note:Computation of payments

10 The provincial personal income tax revenue guarantee payment that may be paid to a province for a fiscal year is the amount, if any, as determined by the Minister, by which

• (a) the amount equal to

  • (i) the product obtained by multiplying the total revenue that, in the opinion of the Minister, would have been derived in the province from a personal income tax on every individual

    • (A) who was resident in the province on the last day of the calendar year ending in the fiscal year, or

    • (B) who, not being resident in the province on the last day of the calendar year ending in the fiscal year, had income earned in that year in the province, as determined under the Income Tax Act,

    computed in accordance with the Income Tax Act, as it would have applied to the taxation year coinciding with the calendar year ending in the fiscal year, had the amendments referred to in section 9 not been made with respect to that year as if the personal income tax payable by every such individual were the “tax otherwise payable under this Part” within the meaning assigned to that expression by subsection 120(4) of the Income Tax Act for that taxation year, which total revenue is, in this Part, referred to as the “basic personal income tax revenue” that would have been derived in the province for the taxation year, by the provincial personal income tax rate applicable to that taxation year

  minus

  • (ii) the product obtained by multiplying the total revenue, as determined by the Minister, that would be derived in the province from a personal income tax on every individual described in clauses (i)(A) and (B) computed in accordance with the Income Tax Act, as it applied to that taxation year, as if the personal income tax payable by every such individual were the “tax otherwise payable under this Part” within the meaning assigned to that expression by subsection 120(4) of the Income Tax Act for that taxation year, by the provincial personal income tax rate applicable to that taxation year,

  exceeds

• (b) one per cent of the basic personal income tax revenue that would have been derived in the province for the taxation year.

Marginal note:Eligibility for payment

• 11 (1) No payment under this Part may be made to a province for a fiscal year where, in the opinion of the Minister, the province has made amendments to the provincial Act, as it applies to the taxation year coinciding with the calendar year ending in the fiscal year, that are intended to offset the effect on the personal income tax revenue derived by the province under the provincial Act of the amendments referred to in section 9 in its application to that taxation year.

• Marginal note:Idem

  (2) No payment under this Part may be made to a province for a fiscal year unless

  • (a) pursuant to a tax collection agreement, Canada, on behalf of the province, has undertaken to collect taxes imposed by the province under the provincial Act on the incomes of individuals for the taxation year ending in the fiscal year; or

  • (b) amendments have been made to the provincial Act that apply to a taxation year ending in the fiscal year that, in the opinion of the Minister, have the same result as the amendments to the Income Tax Act referred to in section 9 in its application to that taxation year.

Marginal note:Definitions

12 In this Part,

provincial Act

loi provinciale

provincial Act, in relation to any province, means that Act of the legislature of the province that imposes taxes on the incomes of individuals; (loi provinciale)

provincial personal income tax rate

taux de l’impôt provincial sur le revenu des particuliers

provincial personal income tax rate applicable to a taxation year means

• (a) in the case of a province, the government of which has entered into a tax collection agreement with respect to the taxation year, the actual personal income tax rate applicable under the provincial Act to that taxation year, and

• (b) in the case of any other province, the rate prescribed as the provincial personal income tax rate applicable to the taxation year. (taux de l’impôt provincial sur le revenu des particuliers)

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

Marginal note:Transfer payments in respect of preferred share dividend taxes under Parts IV.1 and VI.1 of the Income Tax Act

• 12.1 (1) Subject to this Act, the Minister may, in respect of taxes payable under Parts IV.1 and VI.1 of the Income Tax Act by a corporation for a taxation year of the corporation ending in a fiscal year, pay to a province out of the Consolidated Revenue Fund, at such time as the Minister may determine, an amount for the fiscal year equal to thirty-five per cent of that proportion of the taxes so payable that

  • (a) the amount of taxable income of the corporation earned in that taxation year in that province determined in accordance with the provisions of regulations made under the Income Tax Act,

  is of

  • (b) the corporation’s taxable income for that taxation year.

• Marginal note:Where income of corporation is nil

  (2) For the purposes of subsection (1), where a corporation’s taxable income for a taxation year would, but for this subsection, be nil, the corporation shall be deemed to have taxable income for the taxation year equal to $100.

Marginal note:Eligibility for payments

• 12.2 (1) No payment may be made under this Part to a province for a fiscal year unless

  • (a) pursuant to a tax collection agreement, Canada has undertaken for the calendar year ending in the fiscal year to collect taxes imposed by the province under an Act of the legislature of the province imposing a tax on the income of corporations; or

  • (b) the Act of the legislature of the province imposing a tax on the income of corporations provides, in the opinion of the Minister, for a deduction in computing taxable income of a corporation for taxation years ending in the fiscal year of at least 9/4 of the tax payable for those taxation years by the corporation under Part VI.1 of the Income Tax Act.

• Marginal note:Idem

  (2) No payment may be made under this Part to a province for a fiscal year where, in the opinion of the Minister, the province imposes or purports to impose a tax payable by corporations for taxation years ending in the fiscal year that is identical or similar to the taxes imposed under Parts IV.1 and VI.1 of the Income Tax Act.

Marginal note:Information

12.3 A corporation shall furnish to the Minister of National Revenue any information that Minister may require for the purpose of determining the amount payable to a province under this Part in respect of the taxes payable by the corporation under Parts IV.1 and VI.1 of the Income Tax Act.

PART VCanada Health and Social Transfer

Contributions

Marginal note:Transfers established under paragraphs 14(a), (b) and (e) to (g)

• 13 (1) Subject to this Part, a Canada Health and Social Transfer established under paragraphs 14(a), (b) and (e) to (g) 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 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;

  • (c) maintaining the national standard, set out in section 19, that no period of minimum residency be required or allowed with respect to social assistance; and

  • (d) promoting any shared principles and objectives that are developed, pursuant to subsection (3), with respect to the operation of social programs, other than a program for the purpose referred to in paragraph (b).

• Marginal note:Transfers established under paragraphs 14(c) and (d)

  (2) Subject to this Part, a Canada Health and Social Transfer established under paragraphs 14(c) and (d) is to be provided to the provinces for the following purposes:

  • (a) the purpose referred to in paragraph (1)(b); and

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

• Marginal note:Discussion with provinces

  (3) 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 the other social programs referred to in paragraph (1)(d) that could underlie the Canada Health and Social Transfer.

• Marginal note: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.

Marginal note:Canada Health and Social Transfer

14 The Canada Health and Social Transfer shall consist of

• (a) the sum of the total equalized tax transfers, as determined in accordance with subsection 16(1);

• (b) a cash contribution of $12.5 billion for each fiscal year in the period beginning on April 1, 1999 and ending on March 31, 2004;

• (c) a cash contribution of $3.5 billion for the fiscal year beginning on April 1, 1998, to be paid to the trust referred to in section 16.1;

• (d) a cash contribution, to be provided for the purposes referred to in subsection 13(2), of

  • (i) $1.0 billion for the fiscal year beginning on April 1, 2000,

  • (ii) $2.0 billion for the fiscal year beginning on April 1, 2001, and

  • (iii) $2.5 billion for each fiscal year in the period beginning on April 1, 2002 and ending on March 31, 2004;

• (e) a cash contribution of $2.5 billion for the fiscal year beginning on April 1, 1999, to be paid to the trust referred to in section 16.2;

• (f) a cash contribution of $15.5 billion for each fiscal year in the period beginning on April 1, 2004 and ending on March 31, 2006; and

• (g) a cash contribution of

  • (i) $2.8 billion for the fiscal year beginning on April 1, 2001,

  • (ii) $3.6 billion for the fiscal year beginning on April 1, 2002,

  • (iii) $4.3 billion for the fiscal year beginning on April 1, 2003,

  • (iv) $4.9 billion for the fiscal year beginning on April 1, 2004, and

  • (v) $5.5 billion for the fiscal year beginning on April 1, 2005.

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

• 15 (1) The cash contribution established under paragraph 14(b) that may be provided to a province for each of the fiscal years in the period beginning on April 1, 1999 and ending on March 31, 2004 is the amount determined by the formula

  F × [(G × H/J) + (1 - G) × K/L] - M

  where

  F

  is the total of the amounts established under paragraphs 14(a) and (b) for the fiscal year;

  G

  is

  • (a) 0.3 for the fiscal year beginning on April 1, 1999,

  • (b) 0.25 for the fiscal year beginning on April 1, 2000, and

  • (c) 0.0 for each of the fiscal years in the period beginning on April 1, 2001 and ending on March 31, 2004;

  H

  is the product obtained by multiplying

  • (a) the total entitlements referred to in subparagraph 15(4)(b)(i), as it read on March 31, 1999, in respect of the province

  by

  • (b) the quotient obtained by dividing

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

  by

  • (ii) the population of the province for the fiscal year beginning on April 1, 1995;

  J

  is the total of all the values of H for the fiscal year in respect of all provinces;

  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 total equalized tax transfer applicable to the province for the fiscal year, as determined in accordance with subsection 16(1).

• Marginal note:Northwest Territories and Nunavut

  (2) The total entitlements of H in the formula in subsection (1) are

  • (a) in respect of the Northwest Territories, the total entitlement referred to in subparagraph 15(4)(b)(i), as it read on March 31, 1999, in respect of the Northwest Territories multiplied by 0.56843; and

  • (b) in respect of Nunavut, the total entitlement referred to in subparagraph 15(4)(b)(i), as it read on March 31, 1999, in respect of the Northwest Territories multiplied by 0.43157.

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

  (3) The cash contribution established under paragraph 14(c) that may be provided to a province shall be determined in accordance with the terms of the trust indenture establishing the trust referred to in section 16.1.

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

  (4) The cash contribution established under paragraph 14(d) that may be provided to a province for each of the fiscal years in the period beginning on April 1, 2000 and ending on March 31, 2004 is the amount determined by multiplying the amount set out for that fiscal year in that paragraph 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.

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

  (5) The cash contribution established under paragraph 14(e) that may be provided to a province shall be determined in accordance with the terms of the trust indenture establishing the trust referred to in section 16.2.

Marginal note:Total equalized tax transfer

• 16 (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 and 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 and Social Transfer for the fiscal year, if the method of calculation of fiscal equalization payments as set out in Part I, excluding subsections 4(6) and (9), were to be applied to the value of the income tax reduction in all the provinces in respect of the Canada Health and Social Transfer for the fiscal year, except that

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

      • (B) where subsection 4(6) or (9) applies in the determination of the fiscal equalization payment to the province for the fiscal year, the amount determined under this subparagraph shall be adjusted in 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 and 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.

• (3) and (4) [Repealed, 1995, c. 17, s. 49]

Marginal note:Payments to trust

16.1 The Minister may make direct payments, in an aggregate amount not exceeding $3.5 billion, to a trust established to provide funding for the purposes referred to in subsection 13(2).

Marginal note:Payments to trust

16.2 The Minister may make direct payments, in an aggregate amount not exceeding $2.5 billion, to a trust established to provide funding for the purposes referred to in subsection 13(1).

Marginal note:Payments by Minister

• 17 (1) Any amount payable under this Part shall be paid by the Minister out of the Consolidated Revenue Fund at such times and in such manner as may be prescribed.

• Marginal note:Reduction or withholding

  (2) The cash contribution that may be provided to a province under subsection 15(1) or (4) shall 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 subsection 15(1), section 21 or 22 of this Act; or

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

Marginal note:Definitions

18 In sections 19 to 23,

Minister

ministre

Minister means the Minister of Human Resources Development; (ministre)

social assistance

assistance sociale

social assistance means aid in any form to or in respect of a person in need. (assistance sociale)

Marginal note:Criteria for eligibility

• 19 (1) In order that a province may qualify for a full cash contribution under subsection 15(1) 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 thereof; or

  • (b) make or allow the amount, form or manner of social assistance to be contingent upon 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

• 20 (1) Subject to subsection (3), where 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 19 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 shall 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 shall

  • (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:Where no consultation can be achieved

  (3) The Minister may act under subsection (1) without consultation if the Minister 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

• 21 (1) Where, on the referral of a matter under section 20, the Governor in Council is of the opinion that the province does not or has ceased to comply with section 19, the Governor in Council may, by order,

  • (a) direct that any cash contribution under subsection 15(1) 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 subsection 15(1) 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) where 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 shall be sent forthwith by registered mail to the government of the province concerned and the Minister shall 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) shall 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

22 In the case of a continuing failure to comply with section 19, any reduction or withholding under section 21 of a cash contribution to a province for a fiscal year shall 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

23 Any reduction or withholding under section 21 or 22 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.

Marginal note:Reports by Ministers

23.1 The Minister of Finance, 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.

Additional Withholding and Deduction

Marginal note:Definition of “federal payment”

• 23.2 (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) Where the Governor in Council makes an order under subsection 15(1) of the Canada Health Act or subsection 21(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, notwithstanding 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 22 or 23 of this Act.

• Marginal note:Additional deduction

  (3) Where 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, notwithstanding 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.

24 [Repealed, 1995, c. 17, s. 52]

25 [Repealed, 1999, c. 26, s. 10]

PART VIAlternative Payments for Standing Programs

Marginal note:Definitions

26 In this Part,

authorizing instrument

authorizing instrument[Repealed, 1995, c. 17, s. 54]

established programs

established programs[Repealed, 1995, c. 17, s. 54]

special welfare program

special welfare program[Repealed, 1995, c. 17, s. 54]

standing program

standing program[Repealed, 1995, c. 17, s. 54]

tax abatement

tax abatement means the percentage that is applied to the tax otherwise payable under this Part within the meaning assigned by subsection 120(4) of the Income Tax Act to determine the amount that is deemed by subsection 120(2) of that Act to have been paid by an individual on account of the individual’s tax for a taxation year; (abattement fiscal)

taxation year

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

Marginal note:Increase of individual deduction under Income Tax Act

• 27 (1) Where an agreement has, at any time before January 1, 1977, been entered into with a province under section 3 of the Established Programs (Interim Arrangements) Act, chapter E-8 of the Revised Statutes of Canada, 1970, the tax abatement applicable for the 1977 and subsequent taxation years shall be increased with respect to the income of an individual earned in any such taxation year in that province by adding to the percentage figure of the tax abatement both of the unit numbers set out in subsections (2) and (3).

• Marginal note:Tax abatement units

  (2) There shall be added 8.5 units where, in a province for a fiscal year, the Minister determines the increase under subsection (1) on the basis of the aggregate of

  • (a) seventy-five per cent of the additional tax abatement applicable in respect of the province for the calendar year ending in the fiscal year, and

  • (b) twenty-five per cent of the additional tax abatement applicable in respect of the province for the calendar year beginning in the fiscal year.

• Marginal note:Tax abatement units

  (3) There shall be added 5 units where, in a province for a fiscal year, the Minister determines the increase under subsection (1) on the basis of the calendar year ending in the fiscal year.

Marginal note:Adjustments

28 Where the amount of the additional tax abatement applicable in respect of a province in a fiscal year, as determined by the Minister pursuant to section 27,

• (a) is less than the amount, as determined by the Minister, that would have been paid by the Government of Canada under Part V to the province for the fiscal year, the Minister may cause to be paid to the province an amount equal to the amount of the difference; or

• (b) is greater than the amount, as determined by the Minister, that would have been paid by the Government of Canada under Part V to the province for a fiscal year, an amount equal to the amount of the difference shall be recovered out of any moneys payable to the province under this Act or may otherwise be recovered as a debt due to the Government of Canada by the province.

Marginal note:Responsibility of Government of Canada

29 The Government of Canada, in respect of each fiscal year beginning on or after April 1, 1977, by virtue of this Act ceases to be under any obligation, except as provided in this Part, to make any contribution or payment to a province for financing social programs as provided under Part V.

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

30 The amounts authorized under section 28 to be paid by the Minister shall be paid out of the Consolidated Revenue Fund by advances or otherwise at such times and in such manner as may be prescribed.

PART VIIProvincial Taxes and Fees

Interpretation and Amendments to Schedules

Marginal note:Definitions

• 31 (1) In this Part,

  participating province

  participating province means a province in respect of which there is in force a reciprocal taxation agreement entered into with the government of that province; (province signataire)

  provincial tax or fee

  provincial tax or fee means

  • (a) any tax of general application payable on a value, price or quantity basis by the purchaser, lessee, user or consumer of tangible personal property or services subject to the tax in respect of the sale, rental, consumption or use of the property or services, except to the extent that the tax is payable in respect of property or services acquired for resale, lease or sub-lease,

  • (b) any fee of general application payable by the owner, user or lessee of any vehicle or item of mobile equipment drawn, propelled or driven by any kind of power in respect of the registration of the vehicle or item or the licensing or certification thereof or in respect of the transfer or renewal of any registration permit, licence or certificate issued for the use of the vehicle or item, and

  • (c) any tax of a like nature to a tax described in paragraph (a) or any fee of a like nature to a fee described in paragraph (b) that is from time to time prescribed; (taxe ou droit provincial)

  reciprocal taxation agreement

  reciprocal taxation agreement means an agreement referred to in section 32. (accord de réciprocité fiscale)

• Marginal note:Amendments to Schedule I

  (2) On consultation and agreement with the government of each participating province, the Governor in Council may, by order, amend Schedule I

  • (a) by adding thereto the name of any corporation owned by Her Majesty in right of Canada; or

  • (b) by deleting therefrom the name of any corporation.

• Marginal note:Deemed amendment to Schedule I

  (2.1) Where a corporation is added or deemed to be added to Part I or II of Schedule III to the Financial Administration Act, the corporation shall be deemed to be added to Schedule I, and when that corporation is deleted from Part I or II of Schedule III to the Financial Administration Act, the corporation shall be deemed to be deleted from Schedule I.

• Marginal note:Amendments to Schedule I

  (2.2) The Governor in Council may, by order, amend Schedule I

  • (a) by adding thereto the name of any port authority established under the Canada Marine Act; or

  • (b) by deleting therefrom the name of any port authority.

• Marginal note:Amendments to Schedule II

  (3) The Governor in Council may, by order, amend Schedule II

  • (a) by adding thereto the name of any corporation owned by Her Majesty in right of Canada; or

  • (b) by deleting therefrom the name of any corporation.

Reciprocal Taxation Agreements

Marginal note:Reciprocal taxation agreements

32 Notwithstanding any other Act, the Minister may enter into reciprocal taxation agreements with the government of any province, providing, without restricting the generality of the foregoing, for all or any of the following matters, namely

• (a) for the payment by Her Majesty in right of Canada of any provincial tax or fee imposed or levied under a law of that province that would be payable by Her Majesty in right of Canada if that law were applicable thereto;

• (b) for the payment by Her Majesty in right of that province of any tax or fee imposed or levied under the Excise Tax Act that is payable by Her Majesty in right of that province and the waiver of the right to a payment in respect of that tax or fee provided in section 68.14 or 68.19 of that Act;

• (c) for the payment by Her Majesty in right of Canada to that province or the assignees of that province of amounts determined under the agreement in respect of amounts paid by Her Majesty in right of that province and amounts paid by persons identified in the agreement as or on account of any tax imposed under the Excise Tax Act;

• (d) for the payment by Her Majesty in right of Canada of interest on any amounts equal to any provincial tax or fee imposed or levied under a law of the province that would be collected by Her Majesty in right of Canada if that law were applicable to Her Majesty in right of Canada where those amounts have not been remitted or paid to the province at the rate and in the manner and at the time provided for in the applicable law of the province; and

• (e) for the collection and the remittance by Her Majesty in right of Canada of any provincial tax or fee imposed or levied under a law of the province that would be collected pursuant to that law by Her Majesty in right of Canada if that law were applicable to Her Majesty in right of Canada.

Marginal note:Payment out of Consolidated Revenue Fund

33 The amounts authorized to be paid by Her Majesty in right of Canada under a reciprocal taxation agreement may be paid out of the Consolidated Revenue Fund at such times and in such manner as may be prescribed.

Payment in Respect of Provincial Taxes and Fees by Crown Corporations

Marginal note:Payments in respect of provincial tax or fee imposed by participating province

34 Where, in respect of any transaction, matter or thing, a provincial tax or fee is imposed or levied under a law of a participating province and the provincial tax or fee would be payable by a corporation named in Schedule I if that law were applicable to the corporation, the corporation shall, in respect of any such transaction, matter or thing, pay the provincial tax or fee so imposed or levied as and when it would be required to do so if that law were applicable to it.

Marginal note:Settlement of disputes

• 35 (1) Where a dispute involving a corporation named in Schedule I arises as to whether, or the extent to which, any tax or fee imposed or levied under a law of a participating province is a provincial tax or fee, or as to the amount payable in respect of a provincial tax or fee, the dispute may be settled by an action, suit or other proceeding brought or taken by or against the corporation in the name of the corporation in any court that would have jurisdiction if the corporation were not a corporation owned by Her Majesty in right of Canada.

• Marginal note:Practice and procedure

  (2) Subject to subsection (3), the rules of practice and procedure of the court in which an action, suit or other proceeding is brought or taken pursuant to this section apply in that action, suit or other proceeding.

• Marginal note:Payment of judgment

  (3) No execution shall issue on a judgment against a corporation named in Schedule I given in any action, suit or other proceeding brought or taken pursuant to this section, but any money awarded by the judgment shall be paid forthwith out of any funds administered by the corporation.

Marginal note:Payments in respect of provincial tax or fee imposed by non-participating province

36 Where, in respect of any transaction, matter or thing, a provincial tax or fee is imposed or levied under a law of a province that is not a participating province and the provincial tax or fee would be payable by a corporation named in Schedule II if that law were applicable to the corporation, the corporation shall, in respect of any such transaction, matter or thing, pay the provincial tax or fee so imposed or levied as and when it would be required to do so if that law were applicable to it.

Marginal note:Determination by Governor in Council in case of doubt

37 Where, in the opinion of the Governor in Council, a doubt exists as to whether, or the extent to which, any tax or fee imposed or levied under a law of a province that is not a participating province is a provincial tax or fee within the meaning of paragraph (a) or (b) of the definition of that term in subsection 31(1), the Governor in Council may determine whether, or the extent to which, as the case may be, the tax or fee shall be deemed for the purposes of this Part to be a provincial tax or fee.

General

Marginal note:Liability of Crown not affected

38 Nothing in this Part or in any reciprocal taxation agreement shall be construed as limiting or otherwise affecting the liability of Her Majesty in right of Canada or of any corporation named in Schedule I or II to pay any tax or fee that Her Majesty in right of Canada or the corporation is otherwise liable to pay or that they would, but for this Part, be liable to pay.

Marginal note:Direction imperative notwithstanding any limitation expressed or implied

39 A direction in this Part to a corporation named in Schedule I or II to pay any provincial tax or fee shall be construed as a direction to the corporation to pay the tax or fee out of any moneys, securities or other property of the corporation, notwithstanding any prohibition or limitation affecting the powers of the corporation in that behalf expressed or implied in the Act or instrument by or under which the corporation is established or incorporated.

PART VIIIGeneral

Regulations

Marginal note:Regulations

40 The Governor in Council may make regulations

• (a) defining, for the purposes of this Act,

  • (i) the expression revenue base for a revenue source for a province for a fiscal year, and

  • (ii) the expressions referred to in paragraphs (a) to (z.5) of the definition revenue source in subsection 4(2);

• (b) providing for the payment to a province of advances on account of any amount that may become payable to the province under this Act, an administration agreement, a reciprocal taxation agreement or a sales tax harmonization agreement, the adjustment, by way of reduction or set off, of other payments to the province because of those advances and the recovery of overpayments;

• (c) prescribing the manner of determining the population of a province for a fiscal year;

• (d) prescribing the time and manner of making any payment under this Act, an administration agreement or a sales tax harmonization agreement;

• (e) prescribing the accounts to be kept for the purposes of this Act or an agreement entered into under the authority of this Act and the management of those accounts;

• (f) respecting the determination of any matter that under this Act is to be determined by the Minister, the Minister of National Revenue, the Minister of Human Resources Development or the Minister of Health;

• (g) prescribing anything that, by virtue of any other provision of this Act, is to be prescribed; and

• (h) generally for carrying into effect the purposes and provisions of this Act.

40.1 [Repealed, 1992, c. 10, s. 8]

Payment out of Consolidated Revenue Fund

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

41 The amounts authorized to be paid by sections 3, 5 and 9 shall be paid out of the Consolidated Revenue Fund at such times and in such manner as may be prescribed.