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

  • (a) an agreement between the Government of Canada and the government of a province or an aboriginal government under which

    • (i) 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

    • (ii) 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, or

  • (b) an agreement between the Government of Canada and the government of a province under which the government of the province will administer and enforce a First Nation law 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)

  First Nation law

  texte législatif autochtone

  First Nation law has the meaning assigned by subsection 11(1) or 12(1) of the First Nations Goods and Services Tax Act; (texte législatif autochtone)

  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)

• Marginal note:Definition of province

  (2) In Parts I, I.1 and II, 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

Fiscal Equalization Payments to Provinces

Marginal note:Fiscal equalization payment

3 Subject to the other provisions of this Act, there may be paid to a province a fiscal equalization payment not exceeding the amounts determined under this Part for each fiscal year in the period beginning on April 1, 2007 and ending on March 31, 2019.

3.1 [Repealed, 2013, c. 33, s. 110]

3.11 [Repealed, 2013, c. 33, s. 110]

Marginal note:Additional fiscal equalization payment

• 3.12 (1) An additional fiscal equalization payment may be paid for the fiscal year beginning on April 1, 2010 equal to,

  • (a) for Nova Scotia, $250,405,000;

  • (b) for New Brunswick, $80,300,000;

  • (c) for Manitoba, $175,494,000; and

  • (d) for Prince Edward Island, $3,304,000.

• Marginal note:Additional fiscal equalization payment — 2011-2012 fiscal year

  (2) An additional fiscal equalization payment may be paid for the fiscal year beginning on April 1, 2011 equal to,

  • (a) for Quebec, $368,932,000;

  • (b) for Nova Scotia, $157,591,000;

  • (c) for New Brunswick, $149,776,000; and

  • (d) for Manitoba, $275,808,000.

• Marginal note:Additional fiscal equalization payment — 2012-2013 fiscal year

  (3) An additional fiscal equalization payment may be paid for the fiscal year beginning on April 1, 2012 equal to,

  • (a) for Quebec, $362,127,000;

  • (b) for Nova Scotia, $13,471,000;

  • (c) for New Brunswick, $102,767,000; and

  • (d) for Manitoba, $201,295,000.

• Marginal note:Additional fiscal equalization payment — 2013-2014 fiscal year

  (4) An additional fiscal equalization payment may be paid for the fiscal year beginning on April 1, 2013 equal to,

  • (a) for New Brunswick, $48,891,000; and

  • (b) for Manitoba, $6,915,000.

Marginal note:General rule

• 3.2 (1) Subject to the other 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 amount determined by the formula

    (A + B) × C

    where

    A

    is the aggregate of the amounts obtained by subtracting, for each revenue source except the one referred to in paragraph (e) of the definition revenue source in subsection 3.5(1), the average annual per capita yield in that province for the revenue source for that fiscal year from the average annual per capita national yield for the revenue source for that fiscal year,

    B

    is 50% of the amount obtained by subtracting, for the revenue source referred to in paragraph (e) of the definition revenue source in subsection 3.5(1), the average annual per capita revenue to be equalized for that province for that fiscal year from the average annual per capita national revenue to be equalized for that fiscal year, and

    C

    is the average annual population of that province for that fiscal year, and

  • (b) the amount determined by the formula

    A × C

    where

    A and C

    have the same meaning as in paragraph (a).

• Marginal note:Province may elect otherwise

  (2) Despite subsection (1), a province may elect, at the prescribed time and in the prescribed manner, that the fiscal equalization payment that may be paid to that province for a fiscal year be equal to the amount determined by the formula set out in paragraph (1)(a).

• Marginal note:Negative amount

  (3) For the purposes of this Part, if the amount of a fiscal equalization payment computed in accordance with subsection (1) or (2) is negative, that amount is considered to be zero.

• (4) [Repealed, 2013, c. 33, s. 112]

3.3 [Repealed, 2013, c. 33, s. 113]

Marginal note:Less than 50% of population

• 3.4 (1) If the aggregate of the average annual population of all provinces for a fiscal year to which a fiscal equalization payment would be paid for that fiscal year, if the amount of that payment were determined under paragraph 3.2(1)(a), is less than 50% of the aggregate of the average annual population of all provinces for that fiscal year and if the amount that may be paid to a province for that fiscal year under section 3.2 would, if paid, result in that province having, in that fiscal year, a total per capita fiscal capacity that is greater than the per capita equalized fiscal capacity of any province that would not receive a fiscal equalization payment for that fiscal year if the amount of that payment were determined under paragraph 3.2(1)(a), the fiscal equalization payment that may be paid to that province for that fiscal year determined under section 3.2 shall be reduced by the amount determined by the formula

  (A – B) × C

  where

  A

  is the total per capita fiscal capacity of that province for that fiscal year;

  B

  is the per capita equalized fiscal capacity for that fiscal year of the province that has the lowest per capita equalized fiscal capacity for that fiscal year and that would not receive a fiscal equalization payment for that fiscal year if the amount of that payment were determined under paragraph 3.2(1)(a); and

  C

  is the average annual population of that province for that fiscal year.

• Marginal note:50% or more of population

  (2) If the aggregate of the average annual population of all provinces for a fiscal year to which a fiscal equalization payment would be paid for that fiscal year, if the amount of that payment were determined under paragraph 3.2(1)(a), is 50% or more of the aggregate of the average annual population of all provinces for that fiscal year, the fiscal equalization payment that may be paid to a province for that fiscal year determined under section 3.2 shall be reduced by the greater of the following amounts:

  • (a) zero, and

  • (b) the amount determined by the formula

    (A – B) × C

    where

    A

    is the total per capita fiscal capacity of that province for that fiscal year,

    B

    is the quotient obtained by dividing the aggregate of the equalized fiscal capacity of all provinces to which a fiscal equalization payment would be paid for that fiscal year, if the amount of that payment were determined under paragraph 3.2(1)(a), by the aggregate of the average annual population of all of those provinces for that fiscal year, and

    C

    is the average annual population of that province for that fiscal year.

• Marginal note:Re-calculation

  (3) If, as a result of the application of subsection (2), the amount of the fiscal equalization payment that may be paid to any province for a fiscal year is reduced to zero, that subsection applies again, but the description of B in that subsection does not include, for that fiscal year, the equalized fiscal capacity and the average annual population of any province to which the amount of the fiscal equalization payment is reduced to zero.

• Marginal note:Multiple applications

  (4) For greater certainty, subsection (3) applies after each application of subsection (2).

• Marginal note:Aggregate payment

  (5) The aggregate of the fiscal equalization payments that would be paid for a fiscal year beginning after March 31, 2010, if the amounts of those payments were determined under subsections (1) to (4) and section 3.2 as if no province had made an election under subsection 3.2(2), shall be equal to the amount determined by the formula

  A × (1 + B)

  where

  A

  is, for the fiscal year beginning on April 1, 2010, $14,185,000,000 and, for a fiscal year beginning after March 31, 2011, the amount determined under this subsection for the previous fiscal year; and

  B

  is the average of the annual rates of growth of the nominal gross domestic product of Canada, as determined by the Minister, for the calendar year that ends during the fiscal year in question and for the two previous calendar years.

• Marginal note:Calculation

  (6) If the aggregate of the fiscal equalization payments that would be paid for a fiscal year, if the amounts of those payments were determined under subsections (1) to (4) and section 3.2 as if no province had made an election under subsection 3.2(2), exceeds the amount determined under subsection (5), the fiscal equalization payment that may be paid to a province for that fiscal year determined under subsections (1) to (4) and section 3.2 shall be reduced by the amount determined by the formula

  A × B

  where

  A

  is the lesser of the per capita equalization payment for that province for that fiscal year and the per capita reduction; and

  B

  is the average annual population of that province for that fiscal year.

• Marginal note:Per capita calculation

  (7) For the purposes of subsection (6), the Minister shall determine the per capita reduction for a fiscal year and shall, in making that determination, ensure that the aggregate of the reductions referred to in that subsection is equal to the amount determined by the formula

  A – B

  where

  A

  is the aggregate of the fiscal equalization payments that would be paid for that fiscal year, if the amounts of those payments were determined under subsections (1) to (4) and section 3.2 as if no province had made an election under subsection 3.2(2); and

  B

  is the amount determined under subsection (5).

• Marginal note:Adjustment payment

  (8) If the aggregate of the fiscal equalization payments that would be paid for a fiscal year, if the amounts of those payments were determined under subsections (1) to (4) and section 3.2 as if no province had made an election under subsection 3.2(2), is less than the amount determined under subsection (5), there may be paid to a province for that fiscal year an adjustment payment that is,

  • (a) in the case of a province to which a fiscal equalization payment would be paid for that fiscal year, if the amount of that payment were determined under subsections (1) to (4) and section 3.2, the amount determined by the formula

    A × B

    where

    A

    is the per capita adjustment for that fiscal year, and

    B

    is the average annual population of that province for that fiscal year; and

  • (b) in any other case, the greater of zero and the amount determined by the formula

    (C + D – E) × F

    where

    C

    is the per capita pre-adjustment equalized fiscal capacity for that fiscal year of the province that has the greatest per capita pre-adjustment equalized fiscal capacity for that fiscal year of the provinces referred to in paragraph (a),

    D

    is the per capita adjustment for that fiscal year,

    E

    is the per capita pre-adjustment equalized fiscal capacity of the province in question for that fiscal year, and

    F

    is the average annual population of the province in question for that fiscal year.

• Marginal note:Per capita adjustment

  (9) For the purposes of subsection (8), the Minister shall determine the per capita adjustment for a fiscal year and shall, in making that determination, ensure that the aggregate of the adjustment payments referred to in that subsection is equal to the amount determined by the formula

  A – B

  where

  A

  is the amount determined under subsection (5); and

  B

  is the aggregate of the fiscal equalization payments that would be paid for that fiscal year, if the amounts of those payments were determined under subsections (1) to (4) and section 3.2 as if no province had made an election under subsection 3.2(2).

• (10) [Repealed, 2013, c. 33, s. 114]

Marginal note:Interpretation

• 3.5 (1) The following definitions apply in this section and in sections 3 to 3.4.

  average annual per capita national revenue to be equalized

  average annual per capita national revenue to be equalized means, for a fiscal year for a revenue source, the amount determined by the formula

  (A/2 + B/4 + C/4) / D

  where

  A

  is the national revenue to be equalized for that revenue source for the fiscal year that is two years prior to that fiscal year;

  B

  is the national revenue to be equalized for that revenue source for the fiscal year that is three years prior to that fiscal year;

  C

  is the national revenue to be equalized for that revenue source for the fiscal year that is four years prior to that fiscal year; and

  D

  is the aggregate of the average annual population of all provinces for that fiscal year. (revenu national annuel moyen sujet à péréquation par habitant)

  average annual per capita national yield

  average annual per capita national yield means, for a revenue source for a fiscal year, the amount determined by the formula

  (A/2 + B/4 + C/4) / D

  where

  A

  is the national yield for that revenue source for the fiscal year that is two years prior to that fiscal year;

  B

  is the national yield for that revenue source for the fiscal year that is three years prior to that fiscal year;

  C

  is the national yield for that revenue source for the fiscal year that is four years prior to that fiscal year; and

  D

  is the aggregate of the average annual population of all provinces for that fiscal year. (rendement national annuel moyen par habitant)

  average annual per capita revenue to be equalized

  average annual per capita revenue to be equalized means, in respect of a province for a revenue source for a fiscal year, the amount determined by the formula

  (A/2 + B/4 + C/4) / D

  where

  A

  is the revenue to be equalized for that revenue source for the fiscal year that is two years prior to that fiscal year;

  B

  is the revenue to be equalized for that revenue source for the fiscal year that is three years prior to that fiscal year;

  C

  is the revenue to be equalized for that revenue source for the fiscal year that is four years prior to that fiscal year; and

  D

  is the average annual population of that province for that fiscal year. (revenu annuel moyen sujet à péréquation par habitant)

  average annual per capita yield

  average annual per capita yield means, in respect of a province for a revenue source for a fiscal year, an amount determined by the formula

  (A/2 + B/4 + C/4) / D

  where

  A

  is the yield for that revenue source for the fiscal year that is two years prior to that fiscal year;

  B

  is the yield for that revenue source for the fiscal year that is three years prior to that fiscal year;

  C

  is the yield for that revenue source for the fiscal year that is four years prior to that fiscal year; and

  D

  is the average annual population of that province for that fiscal year. (rendement annuel moyen par habitant)

  average annual population

  average annual population means, in respect of a province for a fiscal year, the amount determined by the formula

  A/2 + B/4 + C/4

  where

  A

  is the population of that province for the fiscal year that is two years prior to that fiscal year;

  B

  is the population of that province for the fiscal year that is three years prior to that fiscal year; and

  C

  is the population of that province for the fiscal year that is four years prior to that fiscal year. (population annuelle moyenne)

  equalized fiscal capacity

  equalized fiscal capacity means, in respect of a province for a fiscal year, the product obtained by multiplying the per capita equalized fiscal capacity of that province for that fiscal year by the average annual population of that province for that fiscal year. (capacité fiscale après péréquation)

  national average rate of tax

  national average rate of tax means, in respect of a revenue source, the rate equal to the quotient obtained by dividing the aggregate of the revenue to be equalized for a revenue source for a fiscal year for all provinces by the revenue base in respect of that revenue source for that fiscal year for all provinces. (taux d’imposition national moyen)

  national revenue to be equalized

  national revenue to be equalized means, in respect of a revenue source for a fiscal year, the amount equal to the aggregate of the revenue to be equalized for that revenue source for that fiscal year for all provinces. (revenu national sujet à péréquation)

  national yield

  national yield means, for a revenue source for a fiscal year, the product obtained by multiplying the national average rate of tax for that revenue source for that fiscal year by the aggregate revenue base of all provinces in respect of that revenue source for that fiscal year.  (rendement national)

  per capita equalization payment

  per capita equalization payment means, in respect of a province for a fiscal year, the quotient obtained by dividing the fiscal equalization payment that would be paid to that province for that fiscal year, if the amount of that payment were determined under section 3.2 and subsections 3.4(1) to (4) as if that province had not made an election under subsection 3.2(2), by the average annual population of that province for that fiscal year. (paiement de péréquation par habitant)

  per capita equalized fiscal capacity

  per capita equalized fiscal capacity means, in respect of a province for a fiscal year, the amount determined by the formula

  A + B + (C / F)

  where

  A, B and F

  have the same meaning as the descriptions of A, B and F, respectively, in the definition total per capita fiscal capacity; and

  C

  is any fiscal equalization payment that may be paid to that province for that fiscal year if the amount of that payment were determined under paragraph 3.2(1)(a). (capacité fiscale par habitant après péréquation)

  per capita pre-adjustment equalized fiscal capacity

  per capita pre-adjustment equalized fiscal capacity means, in respect of a province for a fiscal year, the amount determined by the formula

  A + B + C + (E / F)

  where

  A, B, E and F

  have the same meaning as the descriptions of A, B, E and F, respectively, in the definition total per capita fiscal capacity; and

  C

  is the per capita equalization payment for that province for that fiscal year. (capacité fiscale par habitant après péréquation et avant rajustement)

  revenue base

  revenue base means, in respect of a revenue source for a province for a fiscal year, the measure of the relative capacity of that province to derive revenue from that revenue source for that fiscal year and may be defined more particularly by the regulations. (assiette)

  revenue source

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

  • (a) revenues relating to personal income;

  • (b) revenues relating to business income;

  • (c) revenues relating to consumption;

  • (d) revenues derived from property taxes and miscellaneous revenues; and

  • (e) revenues derived from natural resources. (source de revenu)

  revenue to be equalized

  revenue to be equalized means, in respect of a revenue source for a province for a fiscal year, the revenue, as determined by the Minister, derived by that province for that fiscal year from that revenue source and may be defined more particularly by the regulations. (revenu sujet à péréquation)

  total per capita fiscal capacity

  total per capita fiscal capacity means, in respect of a province for a fiscal year, the amount determined by the formula

  A + B + [(C + E) / F]

  where

  A

  is the aggregate of that province’s average annual per capita yield for each revenue source, except the one referred to in paragraph (e) of the definition revenue source, for that fiscal year;

  B

  is that province’s average annual per capita revenue to be equalized, for the revenue source referred to in paragraph (e) of the definition revenue source, for that fiscal year;

  C

  is any fiscal equalization payment that would be paid to that province for that fiscal year if the amount of that payment were determined in accordance with section 3.2 without regard to section 3.4;

  E

  is, with respect to Nova Scotia, any amount that may be paid to that province for that fiscal year in accordance with sections 7 and 8 and 10 to 14 of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act; and

  F

  is the average annual population of that province for that fiscal year. (capacité fiscale totale par habitant)

  yield

  yield means, in respect of a province for a revenue source for a fiscal year, an amount equal to the product obtained by multiplying the national average rate of tax for that revenue source for that fiscal year by that province’s revenue base for that revenue source for that fiscal year. (rendement)

• Marginal note:Deduction in computing revenue to be equalized

  (2) In computing the revenue to be equalized from the revenue source described in paragraph (a) of the definition revenue source in subsection (1) 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 revenue source for all the provinces for that fiscal year, the amount, as estimated by the Minister, by which the revenues derived by Canada under the Income Tax Act from personal income taxes for the taxation year ending in that fiscal year are less than the revenues that would have been derived by Canada under that Act from those taxes if no special abatement of those taxes had been provided under subsection 120(2) of that Act or Part VI of this Act.

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

  (3) For the purpose of determining the revenue to be equalized derived by a province for a fiscal year, in the case of the part of the revenue source referred to in paragraph (d) of the definition revenue source in subsection (1) that consists of local government property taxes and 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 that province that has power to derive those revenues for the financial year of each such local authority ending in that fiscal year is deemed to be revenue derived by that province from that revenue source for that fiscal year.

3.6 [Repealed, 2013, c. 33, s. 116]

3.7 [Repealed, 2013, c. 33, s. 116]

Nova Scotia

Marginal note:Additional fiscal equalization payment

• 3.71 (1) An additional fiscal equalization payment for the period referred to in subsection (2) may be paid to Nova Scotia equal to the amount by which

  • (a) the aggregate of the following amounts:

    • (i) the aggregate of the fiscal equalization amounts computed under section 3.72 for that province for all fiscal years in the period, and

    • (ii) the aggregate of the amounts that would be paid to that province for all fiscal years in the period in accordance with sections 7 to 14 of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act as that Act read on April 1, 2007, computed as if the fiscal equalization payment for that province for each fiscal year in the period were equal to the fiscal equalization amount computed under section 3.72 for that province for that fiscal year

  is greater than

  • (b) the aggregate of the following amounts:

    • (i) the aggregate of the fiscal equalization payments paid to that province for the period, and

    • (ii) the aggregate of the amounts paid to that province for the period in accordance with sections 7 to 14 of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act.

• Marginal note:Definition of period

  (2) For the purpose of subsection (1), period means the period beginning on April 1, 2008 and ending on the earlier of

  • (a) March 31 of the fiscal year preceding the first fiscal year with respect to which Nova Scotia does not meet the conditions under paragraphs 12(1)(a) and (b) of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act and is not receiving any transitional payments under section 14 of that Act, and

  • (b) March 31, 2020.

Marginal note:Fiscal equalization amount

• 3.72 (1) For the purpose of this section and section 3.71, the fiscal equalization amount for a province for a fiscal year is the average of

  • (a) the greater of zero and the amount determined by the formula

    (A - B) × C

    where

    A

    is the per capita equalization standard for that fiscal year,

    B

    is the aggregate of the average annual per capita yield in that province for each revenue source for that fiscal year, and

    C

    is the average annual population of that province for that fiscal year, and

  • (b) the amount determined by the formula

    D × [(E - F) × G] / H

    where

    D

    is

    • (a) for the fiscal year beginning on April 1, 2006, the product obtained by multiplying $10,900,000,000 by 1.035, and

    • (b) for each subsequent fiscal year, the product obtained by multiplying the amount computed for the immediately preceding fiscal year by 1.035,

    E

    is the five-province per capita equalization standard for that fiscal year determined under subsection (3),

    F

    is the aggregate of the average annual per capita yield in that province for each revenue source for that fiscal year,

    G

    is the average annual population of that province for that fiscal year, and

    H

    is the aggregate of the amount for each of the provinces determined by the formula

    (I - J) × K

    where

    I

    is the five-province per capita equalization standard for that fiscal year determined under subsection (3),

    J

    is the aggregate of the average annual per capita yield in the province for each revenue source for that fiscal year, and

    K

    is the average annual population of the province for that fiscal year.

• Marginal note:Clarification — paragraph (1)(a)

  (2) For the purposes of paragraph (1)(a), the Minister shall determine the per capita equalization standard for a fiscal year by computing the fiscal equalization amount for each province for that fiscal year in the manner described in that paragraph and shall, in making that determination, ensure that

  • (a) the amount determined by the following formula would be the same with respect to every province for which a fiscal equalization amount is greater than zero:

    A + (B / C)

    where

    A

    is the aggregate of the average annual per capita yield in that province for each revenue source for that fiscal year,

    B

    is the fiscal equalization amount for that province for that fiscal year, and

    C

    is the average annual population of that province for that fiscal year; and

  • (b) the aggregate of the fiscal equalization amounts for all provinces for which the fiscal equalization amount is greater than zero for that fiscal year would be equal to

    • (i) for the fiscal year beginning on April 1, 2006, the product obtained by multiplying $10,900,000,000 by 1.035, and

    • (ii) for each subsequent fiscal year, the product obtained by multiplying the amount computed for the immediately preceding fiscal year by 1.035.

• Marginal note:Clarification — paragraph (1)(b)

  (3) For the purposes of paragraph (1)(b),

  • (a) the five-province per capita equalization standard for a fiscal year is the amount determined by the formula

    (A + B + C + D + E ) / F

    where

    A

    is the product of the average annual population of Ontario for that fiscal year and the aggregate of the average annual per capita yield for each revenue source in respect of Ontario for that fiscal year,

    B

    is the product of the average annual population of Quebec for that fiscal year and the aggregate of the average annual per capita yield for each revenue source in respect of Quebec for that fiscal year,

    C

    is the product of the average annual population of Manitoba for that fiscal year and the aggregate of the average annual per capita yield for each revenue source in respect of Manitoba for that fiscal year,

    D

    is the product of the average annual population of British Columbia for that fiscal year and the aggregate of the average annual per capita yield for each revenue source in respect of British Columbia for that fiscal year,

    E

    is the product of the average annual population of Saskatchewan for that fiscal year and the aggregate of the average annual per capita yield for each revenue source in respect of Saskatchewan for that fiscal year, and

    F

    is the aggregate of the average annual population for that fiscal year of Ontario, Quebec, Manitoba, British Columbia and Saskatchewan;

  • (b) if, for a province, the value determined for F in paragraph (1)(b) is greater than the value determined for E in that paragraph, the difference between those values in relation to that province is deemed to be zero; and

  • (c) if, for a province, the value determined for J in the description of H in paragraph (1)(b) is greater than the value determined for I in that description, the difference between those values in relation to that province is deemed to be zero.

• Marginal note:Adjustment of revenue to be equalized

  (4) Subject to subsections (5) and (6), if, for a fiscal year, the fiscal equalization amount for a province determined under subsection (1) is greater than zero and that province has seventy per cent or more of the average annual revenue base for all of the provinces in that fiscal year in respect of a revenue source, the revenue to be equalized from that revenue source for all of the provinces for the purpose of determining the average annual per capita yield for each province for that revenue source for that fiscal year is an amount equal to seventy per cent of the revenue to be equalized as otherwise determined from that revenue source for all of the provinces for each of the three immediately preceding fiscal years.

• Marginal note:Nova Scotia

  (5) For the purpose of calculating the additional fiscal equalization payment that may be paid to Nova Scotia under subsection 3.71(1),

  • (a) subsection (4) applies to Nova Scotia in respect of the revenue source referred to in paragraph (z.5) of the definition revenue source in subsection 3.9(1) only for those fiscal years in the period referred to in subsection 3.71(2) for which the application of subsection (4) would result in an increase in the amount calculated under paragraph 3.71(1)(a); and

  • (b) subsection (4) does not apply to Newfoundland and Labrador in respect of the revenue source referred to in paragraph (z.5) of the definition revenue source in subsection 3.9(1).

• (6) [Repealed, 2013, c. 33, s. 117]

3.8 [Repealed, 2013, c. 33, s. 118]

Marginal note:Interpretation

• 3.9 (1) The following definitions apply in this section and in sections 3.71 and 3.72.

  average annual per capita yield

  average annual per capita yield means, in respect of a province for a revenue source for a fiscal year, the amount determined by the formula

  (A + B + C) / (D + E + F)

  where

  A

  is the yield for that revenue source for the fiscal year that is one year prior to that fiscal year;

  B

  is the yield for that revenue source for the fiscal year that is two years prior to that fiscal year;

  C

  is the yield for that revenue source for the fiscal year that is three years prior to that fiscal year;

  D

  is the population of that province for the fiscal year that is one year prior to that fiscal year;

  E

  is the population of that province for the fiscal year that is two years prior to that fiscal year; and

  F

  is the population of that province for the fiscal year that is three years prior to that fiscal year. (rendement annual moyen par habitant)

  average annual population

  average annual population means, in respect of a province for a fiscal year, the amount determined by the formula

  (A + B + C) / 3

  where

  A

  is the population of that province for the fiscal year that is one year prior to that fiscal year;

  B

  is the population of that province for the fiscal year that is two years prior to that fiscal year; and

  C

  is the population of that province for the fiscal year that is three years prior to that fiscal year. (population annuelle moyenne)

  average annual revenue base

  average annual revenue base means, in respect of a province for a revenue source for a fiscal year, the amount determined by the formula

  (A + B + C) / 3

  where

  A

  is the revenue base for the fiscal year that is one year prior to that fiscal year;

  B

  is the revenue base for the fiscal year that is two years prior to that fiscal year; and

  C

  is the revenue base for the fiscal year that is three years prior to that fiscal year. (assiette annuelle moyenne)

  national average rate of tax

  national average rate of tax means, in respect of a revenue source, the rate equal to the quotient obtained by dividing the aggregate of the revenue to be equalized for a revenue source for a fiscal year for all provinces by the revenue base in respect of that revenue source for that fiscal year for all provinces. (taux d’imposition national moyen)

  revenue base

  revenue base means, in respect of a revenue source for a province for a fiscal year, the measure of the relative capacity of that province to derive revenue from that revenue source for that fiscal year and may be defined more particularly by the regulations. (assiette)

  revenue source

  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 from

    • (i) crown lands, and

    • (ii) private lands;

  • (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 revenues;

  • (r) heavy third tier oil revenues;

  • (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 following sources that are shared by Canada with a province:

    • (i) Newfoundland and Labrador offshore revenues,

    • (ii) Nova Scotia offshore revenues, and

    • (iii) revenues from any other source referred to in this definition. (source de revenu)

  revenue to be equalized

  revenue to be equalized means, in respect of a revenue source for a province for a fiscal year, the revenue, as determined by the Minister, derived by that province for that fiscal year from that revenue source and may be defined more particularly by the regulations. (revenu sujet à péréquation)

  yield

  yield means, in respect of a province for a revenue source for a fiscal year, an amount equal to the product obtained by multiplying the national average rate of tax for that revenue source for that fiscal year by that province’s revenue base in respect of that revenue source for that fiscal year. (rendement)

• Marginal note:Deduction in computing revenue to be equalized

  (2) In computing the revenue to be equalized from personal incomes taxes — referred to in paragraph (a) of the definition revenue source in subsection (1) — 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 revenue source for all the provinces for that fiscal year, the amount, as estimated by the Minister, by which the revenues derived by Canada under the Income Tax Act from personal income taxes for the taxation year ending in that fiscal year are less than the revenues that would have been derived by Canada under that Act from those taxes if no special abatement of those taxes had been provided under subsection 120(2) of that Act or Part VI of this Act.

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

  (3) For the purpose of determining the revenue to be equalized derived by a province for a fiscal year from the revenue sources referred to in paragraphs (a) and (b), the following are deemed to be revenues derived by that province for that fiscal year from those revenue sources:

  • (a) in the case of the part of the revenue source referred to in paragraph (z) of the definition revenue source in subsection (1) 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 that province that has power to levy property taxes for the financial year of each such local authority ending in that fiscal year; and

  • (b) in the case of the part of the revenue source referred to in paragraph (z.4) of the definition revenue source in subsection (1) 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 that province that has power to derive those revenues for the financial year of each such local authority ending in that fiscal year.

• (4) to (7) [Repealed, 2013, c. 33, s. 119]

General

Marginal note:Time of calculation — ss. 3.2 to 3.4

• 3.91 (1) At a time determined by the Minister, no later than three months before the beginning of a fiscal year, the Minister shall calculate

  • (a) the fiscal equalization payment that may be paid to a province under sections 3.2 and 3.4 for that fiscal year on the basis that the province makes an election under subsection 3.2(2) for that fiscal year; and

  • (b) the fiscal equalization payment that may be paid to the province under those sections for that fiscal year on the basis that the province does not make an election under that subsection for that fiscal year.

• Marginal note:Time of calculation — section 3.72

  (2) The fiscal equalization amounts referred to in section 3.72 for a fiscal year shall be calculated no later than three months before the end of the fiscal year.

• (3) to (5) [Repealed, 2013, c. 33, s. 120]

Marginal note:Underpayment

3.92 If the Minister determines that the Minister has underpaid any amounts payable to a province under this Part, the Minister may, within the prescribed time and in the prescribed manner, pay that province an amount equal to the underpayment.

Marginal note:Overpayment

3.93 If the Minister determines that the Minister has overpaid any amounts paid to a province under this Part, the Minister may recover the amount of that overpayment

• (a) within the prescribed time and in the prescribed manner, from any amount payable under this Act to that province; or

• (b) from that province as a debt due to Her Majesty in right of Canada.

Marginal note:Time and manner of payments

3.94 There may be paid out of the Consolidated Revenue Fund, on the requisition of the Minister, any amounts authorized to be paid by this Part at the times and in the manner that the Minister considers appropriate.

Marginal note:Recovery

3.95 If the Minister has made a payment to a province under subsection 4.2(1) of this Act as it read on the day before the day on which this section comes into force, the Minister shall, in the prescribed amounts, reduce the fiscal equalization payments to that province for the fiscal years in the period beginning on April 1, 2007 and ending on March 31, 2016. If, on March 31, 2016, the total amount of that payment has not been recovered, the Minister may recover the amount remaining as a debt due to Her Majesty in right of Canada out of any sum of money that may be due or payable by Her Majesty in right of Canada to that province pursuant to this Act or any other Act of Parliament.

Marginal note:Day of election

3.96 An election under this Part is deemed to have been made on the day on which the election is received by the Minister.

Marginal note:Deeming — final computation

3.97 For the purpose of the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act, the final computation of the amount of the fiscal equalization payment for a fiscal year is deemed to have been made on March 1 of that fiscal year.

PART I.01Other Payments

Marginal note:Payments — Ontario and Prince Edward Island

• 3.98 (1) There may be paid out of the Consolidated Revenue Fund, on the requisition of the Minister, the following sums for the fiscal year beginning April 1, 2011:

  • (a) to Ontario, $150,365,000; and

  • (b) to Prince Edward Island, $1,089,000.

• Marginal note:Recovery

  (2) If the Minister has made a payment to a province under subsection (1), he or she shall reduce, by an amount equal to 1/10 of that payment, the fiscal equalization payments to that province for each of the fiscal years in the period beginning on April 1, 2012 and ending on March 31, 2022. If, for one of those fiscal years, it is not possible to reduce the fiscal equalization payment by that entire amount, he or she may recover the amount remaining as a debt due to Her Majesty in right of Canada out of any sum of money that may be due or payable by Her Majesty in right of Canada to that province under this Act for that fiscal year.

PART I.1Territorial Financing

Interpretation

Marginal note:Definitions

• 4 (1) The following definitions apply in this Part.

  eligible revenues

  revenus admissibles

  eligible revenues means, in respect of a territory for a fiscal year, the amount equal to the product obtained by multiplying the fiscal capacity of that territory for that fiscal year by 0.70. (revenus admissibles)

  fiscal capacity

  capacité fiscale

  fiscal capacity means, in respect of a territory for a fiscal year, the amount determined by the formula

  (A + B + C) / 3

  where

  A

  is the aggregate of the yields in that territory for each revenue source for the fiscal year that is two years prior to that fiscal year;

  B

  is the aggregate of the yields in that territory for each revenue source for the fiscal year that is three years prior to that fiscal year;

  C

  is the aggregate of the yields in that territory for each revenue source for the fiscal year that is four years prior to that fiscal year.

  gross expenditure base

  base des dépenses brutes

  gross expenditure base means,

  • (a) for the fiscal year beginning on April 1, 2013, an amount equal to

    • (i) $931,907,459 in respect of Yukon,

    • (ii) $1,339,030,641 in respect of the Northwest Territories, and

    • (iii) $1,465,334,373 in respect of Nunavut; and

  • (b) in respect of a territory, for each subsequent fiscal year, an amount determined by the formula

    (A × B) + C

    where

    A

    is the amount determined to be the gross expenditure base for that territory for the fiscal year preceding that fiscal year,

    B

    is the population adjusted gross expenditure escalator for that territory for that fiscal year, and

    C

    is the gross expenditure base adjustment determined under paragraph 4.2(a) for that territory for that fiscal year.

  national average rate of tax

  taux d’imposition national moyen

  national average rate of tax means, in respect of a revenue source, the rate equal to the quotient obtained by dividing the aggregate of the revenue to be equalized for a revenue source for a fiscal year for all provinces and territories by the revenue base in respect of that revenue source for that fiscal year for all provinces and territories. (taux d’imposition national moyen)

  population adjusted gross expenditure escalator

  facteur de majoration des dépenses brutes rajustées en fonction de la population

  population adjusted gross expenditure escalator means, in respect of a territory for a fiscal year, a factor equal to the product obtained by multiplying

  • (a) the population adjustment factor for that territory for the fiscal year

  by

  • (b) the provincial local government expenditure index for the fiscal year. (facteur de majoration des dépenses brutes rajustées en fonction de la population)

  population adjustment factor

  facteur de rajustement en fonction de la population

  population adjustment factor means, in respect of a territory for a fiscal year, the measure of the population growth of that territory relative to the population growth of Canada and may be defined more particularly by the regulations. (facteur de rajustement en fonction de la population)

  provincial local government expenditure index

  indice provincial des dépenses des administrations locales

  provincial local government expenditure index means, for a fiscal year, the measure of changes in provincial and territorial government spending on programs and services and may be defined more particularly by the regulations. (indice provincial des dépenses des administrations locales)

  revenue base

  assiette

  revenue base means, in respect of a revenue source for a territory for a fiscal year, the measure of the relative capacity of that territory to derive revenue from that revenue source for that fiscal year and may be defined more particularly by the regulations. (assiette)

  revenue block

  revenue block[Repealed, 2013, c. 33, s. 122]

  revenue source

  source de revenu

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

  • (a) revenues relating to personal income;

  • (b) revenues relating to corporate income and government business enterprises;

  • (c) revenues derived from tobacco;

  • (d) revenues derived from motive fuel taxes from the sale of gasoline;

  • (e) revenues derived from motive fuel taxes from the sale of diesel fuel;

  • (f) revenues derived from the sale of alcoholic beverages;

  • (g) revenues derived from payroll taxes;

  • (h) revenues derived from property taxes and miscellaneous revenues; and

  • (i) revenues relating to consumption taxes excluding revenues derived from excise taxes. (source de revenu)

  revenue to be equalized

  revenu sujet à péréquation

  revenue to be equalized, in respect of a revenue source for a territory for a fiscal year, means the revenue, as determined by the Minister, derived by that territory for that fiscal year from that revenue source and may be defined more particularly by the regulations. (revenu sujet à péréquation)

  superannuation adjustment

  montant de l’indexation des pensions

  superannuation adjustment means, in respect of a territory, for each fiscal year, the amount determined by the Minister of Public Works and Government Services to be equal to, with respect to the fiscal year that is two years prior to that fiscal year, the difference between the amount of the superannuation contribution that is payable by that territory under the Public Service Superannuation Act and the amount that would be payable by that territory under that Act as it read on June 16, 1999. (montant de l’indexation des pensions)

  yield

  rendement

  yield means, in respect of a territory for a revenue source for a fiscal year, an amount equal to the aggregate of

  • (a) the product obtained by multiplying the national average rate of tax for that revenue source for that fiscal year by that territory’s revenue base in respect of that revenue source for that fiscal year, and

  • (b) the yield adjustment determined under paragraph 4.2(b) for that fiscal year. (rendement)

• Marginal note:Determination of gross expenditure base

  (2) For the purposes of the definition gross expenditure base in subsection (1), the amount determined to be the gross expenditure base in respect of a territory for any preceding fiscal year may be recalculated by the Minister at any time to take into account changes to the prescribed data relating to the population adjusted gross expenditure escalator.

Territorial Formula Financing Payments

Marginal note:Territorial formula financing payments

• 4.1 (1) Subject to the other provisions of this Act, there may be paid to a territory a territorial formula financing payment not exceeding the amounts determined under this Part for each fiscal year in the period beginning on April 1, 2014 and ending on March 31, 2019.

• (2) [Repealed, 2013, c. 33, s. 123]

• Marginal note:Subsequent fiscal years

  (3) Subject to the other provisions of this Part, the territorial formula financing payment that may be paid to a territory for a fiscal year beginning after March 31, 2008 is equal to the amount, as determined by the Minister, by which

  • (a) the aggregate of the gross expenditure base and the superannuation adjustment for that territory for that fiscal year

  is greater than

  • (b) the eligible revenues for that territory for that fiscal year.

• Marginal note:Adjusted gross expenditure base

  (4) For the purpose of paragraph (3)(a), for the fiscal year beginning on April 1, 2014, the gross expenditure base is equal to the amount determined by the formula

  A + 0.7 (B + C + D + E – F – G – H)

  where

  A

  is the gross expenditure base that would, in the absence of this subsection, be calculated for the fiscal year;

  B

  is equal to the average adjusted yield calculated for revenues relating to personal income;

  C

  is equal to the average yield calculated for revenues relating to corporate income and government business enterprises;

  D

  is equal to the average yield calculated for revenues derived from property taxes and miscellaneous revenues;

  E

  is equal to the average yield calculated for revenues relating to consumption taxes excluding revenues derived from excise taxes;

  F

  is $63,891,572 in respect of Yukon, $125,998,429 in respect of the Northwest Territories and $104,674,613 in respect of Nunavut;

  G

  is equal to the average yield calculated for revenues derived from personal income; and

  H

  is equal to the average yield calculated for revenues derived from corporate income and government business enterprises.

• Marginal note:Definitions

  (5) The following definitions apply in this subsection and in subsection (4).

  average adjusted yield

  rendement rajusté moyen

  average adjusted yield means, in respect of revenues relating to personal income of a territory for the fiscal year beginning on April 1, 2014, the amount determined by the formula

  (A + B + C) / 3

  where

  A

  is the yield for that revenue source for the fiscal year beginning on April 1, 2012, calculated by adjusting the national average rate of tax for that fiscal year to exclude the revenues to be equalized adjustment for that fiscal year from the aggregate of the revenue to be equalized for that revenue source for the fiscal year for all provinces and territories;

  B

  is the yield for that revenue source for the fiscal year beginning on April 1, 2011, calculated by adjusting the national average rate of tax for that fiscal year to exclude the revenues to be equalized adjustment for that fiscal year from the aggregate of the revenue to be equalized for that revenue source for the fiscal year for all provinces and territories; and

  C

  is the yield for that revenue source for the fiscal year beginning on April 1, 2010, calculated by adjusting the national average rate of tax for that fiscal year to exclude the revenues to be equalized adjustment for that fiscal year from the aggregate of the revenue to be equalized for that revenue source for the fiscal year for all provinces and territories.

  average yield

  rendement moyen

  average yield means, in respect of a given revenue source of a territory for the fiscal year beginning on April 1, 2014, the amount determined by the formula

  (A + B + C) / 3

  where

  A

  is the yield for that revenue source for the fiscal year beginning on April 1, 2012, that yield being calculated, in respect of G and H of the formula provided for in subsection (4), in accordance with the provisions of this Act and the regulations as they read on December 17, 2012;

  B

  is the yield for that revenue source for the fiscal year beginning on April 1, 2011, that yield being calculated, in respect of G and H of the formula provided for in subsection (4), in accordance with the provisions of this Act and the regulations as they read on December 17, 2012; and

  C

  is the yield for that revenue source for the fiscal year beginning on April 1, 2010, that yield being calculated, in respect of G and H of the formula provided for in subsection (4), in accordance with the provisions of this Act and the regulations as they read on December 17, 2012.

  revenues to be equalized adjustment

  rajustement de revenus sujets à péréquation

  revenues to be equalized adjustment means the amount determined by the Minister for the fiscal year that corresponds to the amount, for all taxpayers, of any rebate, credit or reduction in relation to revenue relating to personal income that a territory, province or one of their local governments grant in favour of a taxpayer for the fiscal year, up to a maximum that reduces to zero the amount of the taxpayer’s tax that is included in that revenue source for that fiscal year. (rajustement de revenus sujets à péréquation)

General

Marginal note:Powers of the Minister

4.2 The Minister may determine, in respect of a territory for a fiscal year,

• (a) the amount of the gross expenditure base adjustment, in order to reflect

  • (i) a transfer of responsibilities between Canada and the government of a territory or the government of a territory and an aboriginal government,

  • (ii) the signing of land claims, comprehensive land claims or self-government agreements with aboriginal governments, and

  • (iii) personal income tax room sharing agreements between the government of Yukon and an aboriginal government in Yukon; and

• (b) the amount of the yield adjustment, in order to reflect

  • (i) personal income tax room sharing agreements between the government of Yukon and an aboriginal government in Yukon,

  • (ii) federal statutory limitations on territo-rial revenue raising capacity.

  • (iii) [Repealed, 2013, c. 33, s. 124]

Marginal note:Time of calculation

4.3 The territorial formula financing payment payable to a territory for a fiscal year shall be calculated, at a time determined by the Minister, no later than three months before that fiscal year begins.

4.31 [Repealed, 2007, c. 29, s. 62]

Marginal note:Underpayment

4.4 If the Minister determines that the Minister has underpaid any amounts payable to a territory under this Part, the Minister may, within the prescribed time and in the prescribed manner, pay that territory an amount equal to the underpayment.

Marginal note:Overpayment

4.5 If the Minister determines that the Minister has overpaid any amounts paid to a territory under this Part, the Minister may recover the amount of that overpayment

• (a) within the prescribed time and in the prescribed manner, from any amount payable under this Act to that territory; or

• (b) from that territory as a debt due to Her Majesty in right of Canada.

Marginal note:Time and manner of payments

4.6 There may be paid out of the Consolidated Revenue Fund, on the requisition of the Minister, any amounts authorized to be paid by this Part at the times and in the manner that the Minister considers appropriate.

Marginal note:Recovery — Yukon

4.7 The Minister may recover, from any amount payable under this Part to Yukon, the amount, as determined by the Minister, that is computed under sections 7.5 and 7.7 of the Canada-Yukon Oil and Gas Accord, signed on May 28, 1993, and under section 7.27 of the Yukon Northern Affairs Program Devolution Transfer Agreement, signed on October 29, 2001.

4.8 [Repealed, 2007, c. 29, s. 62]

4.9 [Repealed, 2007, c. 29, s. 62]

4.91 [Repealed, 2007, c. 29, s. 62]

4.92 [Repealed, 2007, c. 29, s. 62]

4.93 [Repealed, 2007, c. 29, s. 62]

4.94 [Repealed, 2007, c. 29, s. 62]

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 determined by the formula

  (0.95 × A) – B + (C × D) – (E × F)

  where

  A

  is the non-natural resource revenue of the province for the preceding fiscal year;

  B

  is the non-natural resource revenue of the province for the fiscal year;

  C

  is equal to

  • (a) 95%, if the natural resource revenue of the province for the fiscal year is greater than the natural resource revenue of the province for the preceding fiscal year,

  • (b) 50%, if the natural resource revenue of the province for the fiscal year is less than one half of the natural resource revenue of the province for the preceding fiscal year, or

  • (c) zero, in any other case;

  D

  is the natural resource revenue of the province for the preceding fiscal year;

  E

  is equal to

  • (a) one, if the natural resource revenue of the province for the fiscal year is either greater than the natural resource revenue of the province for the preceding fiscal year or less than one half of the natural resource revenue of the province for the preceding fiscal year, or

  • (b) zero, in any other case; and

  F

  is the natural resource revenue of the province for the fiscal year.

• (1.1) [Repealed, 2010, c. 25, s. 173]

• Marginal note:Adjustment

  (2) For the purposes of determining the amount under subsection (1), the Minister may adjust, in the prescribed manner, the natural resource revenue and the non-natural resource revenue of a province for the fiscal year to offset the amount, as determined by the Minister, of any change in either of those revenues for the fiscal year resulting from changes made by the province in the rates or structure of provincial taxes or of other means of raising the revenue of the province from the rates or structures in effect in the preceding fiscal year.

• Marginal note:Interpretation

  (2.1) If a province has entered into a tax collection agreement respecting personal income tax or corporation income tax, a change to the Income Tax Act affecting the province’s Common Tax Base as defined in Chapter 2 or 3, as the case may be, of the tax collection agreement is deemed to be a change in the rates or in the structures of provincial taxes for the purposes of subsection (2).

• (2.2) [Repealed, 2010, c. 25, s. 173]

• Marginal note:Natural resource revenue

  (3) For the purposes of determining the amount under subsection (1), the natural resource revenue of a province for a fiscal year is the aggregate of the total revenue, as determined by the Minister, derived by the province for the fiscal year from the revenue sources described in paragraphs (l) to (w) of the definition revenue source in subsection 3.9(1) and from the revenue sources described in paragraph (z.5) of that definition that relate to natural resources.

• Marginal note:Non-natural resource revenue

  (4) For the purposes of determining the amount under subsection (1), the non-natural resource revenue of a province for a fiscal year is equal to

  • (a) the aggregate of

    • (i) the total revenue, as determined by the Minister, derived by the province for the fiscal year from the revenue sources described in paragraphs (a) to (k), (x), (y) and (z.1) to (z.3) of the definition revenue source in subsection 3.9(1),

    • (ii) the total revenue, as determined by the Minister, derived by the province for the fiscal year from the revenue sources described in paragraph (z.5) of that definition that do not relate to natural resources,

    • (iii) the fiscal equalization payment made to the province for the fiscal year under Part I, and

    • (iv) the additional cash payment made to the province for the fiscal year under section 24.703,

  minus

  • (b) despite subsection (5), the aggregate of

    • (i) the total equalized tax transfer applicable to the province as if, for that fiscal year, the transfer were determined in the manner described in subsection 24.7(1.22), and

    • (ii) the value of the additional tax abatement units as determined in accordance with subsection 27(2).

• Marginal note:Non-natural resource revenue

  (5) For the purposes of determining the non-natural resource revenue of a province for a fiscal year,

  • (a) subsection 3.9(2) applies, with any modifications that 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 3.9(1), except that no deduction may be made in respect of the tax abatement units referred to in subsection 27(2);

  • (b) the province’s revenue for the fiscal year derived from personal income taxes, described in paragraph (a) of the definition revenue source in subsection 3.9(1), is deemed to be

    • (i) the total amount, determined in the prescribed manner, of the provincial personal income taxes assessed or reassessed, not later than 24 months after the end of the fiscal year, in respect of the taxation year ending in the fiscal year,

    minus

    • (ii) the total amount, determined in the 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; and

  • (c) the province’s revenue for the fiscal year derived from that part of the revenue source described in paragraph (b) of the definition revenue source in subsection 3.9(1) that consists of corporation income taxes is deemed to be

    • (i) the total amount, determined in the prescribed manner, of the provincial corporation income taxes assessed or reassessed, not later than 24 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

    • (ii) the total amount, determined in the 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:Exception

  (6) Despite subsection (4), for the purposes of determining the amount under subsection (1) for a fiscal year, the payment under section 3.12 and the additional cash payment under section 24.703 are not included in the province’s non-natural resource revenue for the preceding fiscal year.

• 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.

• (11) [Repealed, 2010, c. 25, s. 173]

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:Restriction

  (1.1) An administration agreement referred to in paragraph (b) of the definition administration agreement in subsection 2(1) can only be entered into if the government of the province that is to administer and enforce the First Nation law also administers and enforces Part IX of the Excise Tax Act under an administration agreement referred to in paragraph (a) of that definition.

• 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:Amending agreement — exception to general rule

  (2.1) Subsection (2) does not apply to an amendment made to an administration agreement if the agreement authorizes the Minister or the Minister of National Revenue to make the amendment and the amendment does not fundamentally alter the terms and conditions of the agreement.

• Marginal note:Confirmation of past amendments

  (2.2) Amendments that were made to an administration agreement before the day on which the Technical Tax Amendments Act, 2012 received royal assent and that, if subsection (2.1) had been in force on the date those amendments were made, would have been authorized under that subsection are, for greater certainty, ratified and confirmed and all actions taken and payments made as a result of those amendments are ratified and confirmed.

• 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:Payments — First Nation law

7.31 If an administration agreement has been entered into in respect of a First Nation law, any amount that is payable by a person under the First Nation law shall, despite the First Nation law or any Act of Parliament, 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:Net remittance — First Nation law

7.5 Despite any other enactment, if an administration agreement has been entered into in respect of a First Nation law, the government of the province that is a party to the administration agreement may, in accordance with the terms and conditions of the administration agreement, reduce the remittance to the Government of Canada of any amount it has collected on account of the tax imposed under the First Nation law by any amount it has paid to a person under that law.

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 If there is a sales tax harmonization agreement with the government of a province, the appropriate minister may pay to the 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 (1) 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.

• Marginal note:Confirmation of past payments

  (2) Payments that were made before the date on which the Keeping Canada’s Economy and Jobs Growing Act was assented to and that could have been authorized under section 8.4, as amended by that Act, if that version of section 8.4 had been in force on the date those payments were made are, for greater certainty, ratified and confirmed and all actions taken in respect of those payments are ratified and confirmed.

PART IVTransfer Payments with Respect to the Elimination of Provincial Capital Taxes

Marginal note:Definition of capital tax

9 In this Part, capital tax means a tax that is imposed on one or more of the following:

• (a) an element of shareholders’ equity in a corporation such as share capital or retained earnings;

• (b) a form of long-term indebtedness owed by a corporation; or

• (c) any other element of capital that the Minister considers appropriate.

It does not include

• (d) a tax imposed under Part VI.1 of the Taxation Act, R.S.Q., c. I-3;

• (e) a tax imposed under section 74.1 of the Corporations Tax Act, R.S.O. 1990, c. C-40; or

• (f) any tax that the Minister does not consider to be sufficiently similar to a tax imposed under Part I.3 or VI of the Income Tax Act.

9.1 [Repealed, 2007, c. 29, s. 63]

Marginal note:Incentive to eliminate capital taxes

• 10 (1) As an incentive for a province to eliminate capital taxes imposed by the province, the province is eligible to receive a payment under this Part if

  • (a) before January 2, 2011, it eliminates a capital tax that is imposed under a law of the province that was in force on March 18, 2007; and

  • (b) any legislation that is required to give effect to the elimination is enacted after March 18, 2007 and before January 2, 2011.

• Marginal note:Meaning of elimination

  (2) For the purposes of this Part, a capital tax is considered to be eliminated if

  • (a) under the law of the province, the tax ceases before January 2, 2011 to be imposed on all corporations, except that the tax may continue to be imposed on any corporation that is exempt from tax under any of paragraphs 149(1)(d) to (d.4) of the Income Tax Act on all of its taxable income; or

  • (b) in the case where the tax is imposed only on financial institutions, the law under which the tax is imposed is amended, before January 2, 2011, to replace the tax with a new capital tax imposed only on financial institutions that meets the following criteria:

    • (i) no financial institution becomes subject to the new capital tax that was not subject to the replaced tax,

    • (ii) every financial institution on which the new capital tax is imposed must be permitted to reduce the amount of the new capital tax payable by it for a taxation year by the amount of income tax payable by it to the province for the year and, if the amount of income tax so payable exceeds the amount of the new capital tax so payable, the financial institution must be permitted to apply the amount of the excess to reduce capital tax payable by it in other taxation years in a manner satisfactory to the Minister, and

    • (iii) the Minister is satisfied that the total amount of revenue that would be raised by the new capital tax from financial institutions if there were no reduction for income tax payable is intended to be broadly commensurate with the total amount of revenue raised from those financial institutions by the province’s income tax.

• Marginal note:Separate capital tax

  (3) If a province imposes a capital tax that applies to financial institutions as well as corporations that are not financial institutions, the capital tax is deemed to be two separate capital taxes for the purposes of this Part.

Marginal note:Amount of payment

• 11 (1) The amount that a province may be eligible to receive, in respect of a period fixed by the Minister, is equal to 17% of the estimated foregone revenue for that period.

• Marginal note:Preliminary payment

  (2) A province is eligible to receive a preliminary payment for a period if the province has provided information in accordance with section 12.01 such that the Minister is able to make a preliminary determination of the estimated foregone revenue for that period. The Minister shall try to make a preliminary payment to the province on or before the last day of the period if the Minister receives the information in a timely manner.

• Marginal note:Final determination

  (3) After finalized information that is consistent with a province’s public accounts becomes available so as to enable the Minister to make a final determination of the amount under subsection (1) in respect of a period, the Minister shall do so and reconcile the final determination with any preliminary payment paid to the province. If the amount of the final determination is greater than the preliminary payment, the Minister shall, without delay, pay the difference to the province. However, if the amount of the final determination is less than the preliminary payment, the difference may be deducted from any amount payable to the province under this Act or be recovered from the province as a debt due to Her Majesty in right of Canada.

• Marginal note:Program time limit

  (4) For the purposes of determining the amount of a payment under this Part, a period shall not include a day that is before March 19, 2007 or after January 1, 2011.

• Marginal note:Consolidated Revenue Fund

  (5) The Minister may pay to a province, out of the Consolidated Revenue Fund, any amount that the province is eligible to receive under this Part.

Marginal note:Estimated foregone revenue

• 12 (1) Except where subsection (2) applies, the estimated foregone revenue for a province in respect of a period is the amount, as determined by the Minister, by which

  • (a) the estimated base revenue, determined as the estimated amount of revenue in respect of a specific capital tax that the province would have received in respect of the period from corporations that would have been subject to tax under Part I of the Income Tax Act under the laws of the province as they read on March 18, 2007, including any enactment that would be applicable to the period but that had not come into force on or before that date,

  exceeds

  • (b) the estimated actual revenue, determined as the estimated amount of revenue in respect of the capital tax that the province receives in respect of the period from corporations that are subject to tax under Part I of the Income Tax Act.

• Marginal note:Estimated foregone revenue — capital tax on financial institutions

  (2) In the case of a capital tax that has been eliminated as described in paragraph 10(2)(b), the estimated foregone revenue for a province in respect of a period is the amount determined by the Minister to be the estimated amount of revenue in respect of the capital tax that the province would have received in respect of the period from financial institutions that would have been subject to tax under Part I of the Income Tax Act under the laws of the province as they read on March 18, 2007, including any enactment that would be applicable to the period but that had not come into force on or before that date.

Marginal note:Provision of information

• 12.01 (1) No payment may be made to a province under this Part unless the province provides to the Minister all of the information that the Minister considers necessary for the determination of the amount of that payment in accordance with this Part.

• Marginal note:Certification by Minister of province

  (2) All information provided by a province shall be of the best quality that is available at the time it is provided and shall be certified as such by an appropriate minister of the provincial government.

PART IV.01Transfer Payments — Tax in Respect of Stock Option Benefit Deferral Under Part I.01 of the Income Tax Act

Marginal note:Transfer payments — Consolidated Revenue Fund

12.02 Subject to this Act, the Minister may pay to a province, out of the Consolidated Revenue Fund, at such time as the Minister may determine, an amount equal to 1/3 of the tax payable under subparagraph 180.01(2)(c)(ii) of the Income Tax Act for a taxation year by a taxpayer who is resident in the province on the last day of that taxation year.

Marginal note:Eligibility for payment

12.03 No payment may be made under this Part to a province if, in the opinion of the Minister, the province imposes or purports to impose a tax that is similar to the tax imposed under Part I.01 of the Income Tax Act.

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 an amount that is not less than the amount deductible by the corporation for the year under paragraph 110(1)(k) 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 IV.11Transfer Payments — Tax in Respect of Sift Trusts or Sift Partnerships

Marginal note:Definitions

12.31 The following definitions apply in this Part.

SIFT entity

SIFT entity means a SIFT trust or a SIFT partnership. (entité intermédiaire de placement déterminée)

SIFT partnership

SIFT partnership has the same meaning as in subsection 248(1) of the Income Tax Act. (société de personnes intermédiaire de placement déterminée)

SIFT trust

SIFT trust has the same meaning as in subsection 248(1) of the Income Tax Act. (fiducie intermédiaire de placement déterminée)

Marginal note:Permanent establishment

12.32 The definition permanent establishment in subsection 400(2) of the Income Tax Regulations, as it read on March 12, 2009 and as it is amended from time to time after that date, applies in determining the amount payable to a province under this Part.

Marginal note:Transfer payments for SIFT entity with single permanent establishment

12.33 Subject to this Act, the Minister may pay to a province, in respect of tax payable under subsection 122(1) or 197(2) of the Income Tax Act by a SIFT entity that, in a taxation year, has a permanent establishment in the province and no permanent establishment outside the province, the amount determined by the formula

Marginal note:Transfer payments for SIFT entity with multiple permanent establishments

• 12.34 (1) Subject to this Act, the Minister may pay to a province, in respect of tax payable under subsection 122(1) or 197(2) of the Income Tax Act by a SIFT entity that, in a taxation year, has a permanent establishment in the province and a permanent establishment outside the province, the amount determined by the formula

  (Z/Y) × (X × W)

  where

  Z

  is, subject to subsection (2), the amount determined by the second formula in paragraph 414(3)(c) of the Income Tax Regulations for the taxation year in respect of the province;

  Y

  is

  • (a) subject to subsection (2), in respect of a taxation year that is after 2006 and before 2009 for which no election was made by the SIFT entity under subsection 34(4) of the Budget Implementation Act, 2008, the amount that would be determined under paragaph 414(3)(c) of the Income Tax Regulations in respect of the SIFT entity for the taxation year if the SIFT entity had made that election, and

  • (b) in any other case, the amount determined under paragraph 414(3)(c) of the Income Tax Regulations in respect of the SIFT entity for the taxation year;

  X

  is

  • (a) in respect of a taxation year that is after 2006 and before 2009 for which no election was made by the SIFT entity under subsection 34(4) of the Budget Implementation Act, 2008, 0.13, and

  • (b) in any other case, the amount determined under paragraph 414(3)(c) of the Income Tax Regulations in respect of the SIFT entity for the taxation year; and

  W

  is

  • (a) for a SIFT entity that is a SIFT trust, the SIFT trust’s taxable SIFT trust distributions, as defined in subsection 122(3) of the Income Tax Act, for the taxation year, and

  • (b) for a SIFT entity that is a SIFT partnership, the SIFT partnership’s taxable non-portfolio earnings, as defined in subsection 197(1) of the Income Tax Act, for the taxation year.

• Marginal note:2007 and 2008 taxation years — permanent establishment in Quebec

  (2) In respect of a taxation year that is after 2006 and before 2009 for which no election was made under subsection 34(4) of the Budget Implementation Act, 2008 by a SIFT entity that has a permanent establishment in the province of Quebec in that taxation year, in calculating the amount determined by the second formula in paragraph 414(3)(c) of the Income Tax Regulations in respect of that province, paragraph (a) of the definition general corporate income tax rate in subsection 414(1) is to be read as follows:

  • (a) for Quebec, the highest percentage rate of tax imposed under the laws of Quebec on the taxable income of a public corporation earned in the taxation year in Quebec;

Marginal note:Consolidated Revenue Fund

12.35 Payments that the Minister may make under section 12.33 or 12.34 are to be made out of the Consolidated Revenue Fund at any time that the Minister may determine.

Marginal note:Information

12.36 A SIFT entity that has not made an election under subsection 34(4) of the Budget Implementation Act, 2008 in respect of a taxation year that is after 2006 and before 2009 must furnish to the Minister of National Revenue any information that that Minister may require for the purpose of determining the amount payable to a province under this Part in respect of taxes payable by the SIFT entity under subsection 122(1) or 197(2) of the Income Tax Act for that taxation year.

PART IV.2Transfer Payments — Tax on Payments Under Registered Education Savings Plans Under Part X.5 of the Income Tax Act

Marginal note:Transfer payments — Consolidated Revenue Fund

12.4 Subject to this Act, the Minister may pay to a province, out of the Consolidated Revenue Fund, at such time as the Minister may determine, an amount equal to 40% of the tax payable under Part X.5 of the Income Tax Act for a taxation year by a person who is resident in the province on the last day of that taxation year.

Marginal note:Eligibility for payment

12.5 No payment may be made under this Part to a province if, in the opinion of the Minister, the province imposes or purports to impose a tax that is similar to the tax imposed under Part X.5 of the Income Tax Act.

PART IV.3Transfer Payments — Tax on Excess Epsp Amounts Under Part Xi.4 of the Income Tax Act

Marginal note:Transfer payments — Consolidated Revenue Fund

12.6 Subject to this Act, the Minister may, at such time as he or she determines, pay to a province, out of the Consolidated Revenue Fund in respect of tax payable under section 207.8 of the Income Tax Act for a taxation year by a person who is resident in the province at the end of the taxation year, the amount determined by the formula:

Marginal note:Eligibility for payment

12.7 No payment may be made under this Part to a province if, in the opinion of the Minister, the province imposes or purports to impose a tax that is similar to the tax imposed under Part XI.4 of the Income Tax Act.

PART IV.4Transfer Payments with Respect to Federal Taxes — Necessary Information

Marginal note:Information to be provided

12.8 The Minister of National Revenue shall provide to the Minister in a form and manner, and at a time, satisfactory to the Minister, any information necessary for the administration of Parts IV.01 to IV.3.

PART V[Repealed, 2012, c. 19, s. 391]

13 [Repealed, 2012, c. 19, s. 391]

14 [Repealed, 2012, c. 19, s. 391]

15 [Repealed, 2012, c. 19, s. 391]

16 [Repealed, 2012, c. 19, s. 391]

16.1 [Repealed, 2012, c. 19, s. 391]

16.2 [Repealed, 2012, c. 19, s. 391]

16.3 [Repealed, 2012, c. 19, s. 391]

16.4 [Repealed, 2012, c. 19, s. 391]

17 [Repealed, 2012, c. 19, s. 391]

18 [Repealed, 2012, c. 19, s. 391]

19 [Repealed, 2012, c. 19, s. 391]

20 [Repealed, 2012, c. 19, s. 391]

21 [Repealed, 2012, c. 19, s. 391]

22 [Repealed, 2012, c. 19, s. 391]

23 [Repealed, 2012, c. 19, s. 391]

23.1 [Repealed, 2012, c. 19, s. 391]

23.2 [Repealed, 2012, c. 19, s. 391]

PART V.1Canada Health Transfer, Canada Social Transfer and Wait Times Reduction Transfer

Canada Health Transfer

Marginal note:Purposes

24 Subject to this Part and for the purpose of giving effect to the 2003 First Ministers’ Accord on Health Care Renewal and the 2004 10-Year Plan to Strengthen Health Care, a Canada Health Transfer in the amounts referred to in subsection 24.1(1) is to be provided to the provinces for the purposes of

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

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

Marginal note:Amount

• 24.1 (1) The Canada Health Transfer is to consist of

  • (a) a cash contribution equal to

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

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

    • (iii) $19 billion for the fiscal year beginning on April 1, 2005,

    • (iv) the product obtained by multiplying the cash contribution for the immediately preceding year by 1.06, rounded to the nearest thousand, for each fiscal year in the period beginning on April 1, 2006 and ending on March 31, 2017, and

    • (v) for each fiscal year beginning after March 31, 2017, the product, rounded to the nearest thousand, obtained by multiplying the cash contribution for the immediately preceding fiscal year by the greater of 1.03, and

      (1 + A)

      where

      A

      is the average of the annual rates of growth of the nominal gross domestic product of Canada for the calendar year that ends during the fiscal year in question and for the two previous calendar years, as determined by the Minister not later than three months before the beginning of that fiscal year; and

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

• Marginal note:Meaning of total equalized tax transfer

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

• Marginal note:Non-application

  (3) The cash contribution referred to in subparagraph (1)(a)(ii) is not subject to subparagraphs 4(1)(a)(i) to (iii) of the Canada Health Transfer and Canada Social Transfer Regulations.

Marginal note:Provincial share — fiscal years 2004-2005 to 2013-2014

• 24.2 (1) The cash contribution established under paragraph 24.1(1)(a) that may be provided to a province for each fiscal year in the period beginning on April 1, 2004 and ending on March 31, 2014 is the amount determined by the formula

  F × (K/L) - M

  where

  F

  is the total of the amounts established under paragraphs 24.1(1)(a) and (b) for the fiscal year;

  K

  is the population of the province for the fiscal year;

  L

  is the total of the population of all provinces for the fiscal year; and

  M

  is the amount obtained by multiplying the total equalized tax transfer for the province as determined in accordance with section 24.7 by the quotient, rounded to the nearest hundredth, that is obtained by dividing an amount equal to the cash contribution specified in subparagraph 24.1(1)(a)(i) by an amount equal to the aggregate of the cash contributions specified in subparagraphs 24.1(1)(a)(i) and 24.4(1)(a)(i).

• Marginal note:Fiscal year 2009–2010

  (2) Despite subsection (1), the cash contribution established under paragraph 24.1(1)(a) that may be provided to a province for the fiscal year beginning on April 1, 2009 is

  • (a) for Ontario, $9,233,217,000;

  • (b) for Quebec, $5,798,516,000;

  • (c) for Nova Scotia, $700,137,000;

  • (d) for New Brunswick, $557,488,000;

  • (e) for Manitoba, $903,325,000;

  • (f) for British Columbia, $3,353,843,000;

  • (g) for Prince Edward Island, $104,364,000;

  • (h) for Saskatchewan, $843,451,000;

  • (i) for Alberta, $1,961,782,000;

  • (j) for Newfoundland and Labrador, $450,450,000;

  • (k) for Yukon, $26,457,000;

  • (l) for the Northwest Territories, $26,824,000; and

  • (m) for Nunavut, $27,208,000.

Marginal note:Provincial share — fiscal year 2014-2015 and later

24.21 The cash contribution established under paragraph 24.1(1)(a) that may be provided to a province for each fiscal year beginning after March 31, 2014 is the amount determined by multiplying the total of the cash contributions to be provided to all the provinces for that fiscal year by the quotient obtained by dividing

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

by

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

Canada Social Transfer

Marginal note:Purposes

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

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

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

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

• Marginal note:Discussion with provinces

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

• Marginal note:Definition of social programs

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

Marginal note:Amount

• 24.4 (1) The Canada Social Transfer is to consist of

  • (a) a cash contribution of

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

    • (ii) $150 million for the fiscal year beginning on April 1, 2004,

    • (iii) $8.225 billion for the fiscal year beginning on April 1, 2005,

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

    • (v) $9.487 billion for the fiscal year beginning on April 1, 2007,

    • (vi) $10.537 billion for the fiscal year beginning on April 1, 2008, and

    • (vii) the product obtained by multiplying the cash contribution for the immediately preceding fiscal year by 1.03, rounded to the nearest thousand, for each fiscal year beginning after March 31, 2009.

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

• Marginal note:Meaning of total equalized tax transfer

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

Marginal note:Provincial share: fiscal year 2006-2007 and earlier

24.5 The cash contribution established under any of subparagraphs 24.4(1)(a)(i) to (iv) that may be provided to a province for the fiscal year mentioned in that subparagraph is the amount determined by the formula

Marginal note:Provincial share — fiscal year 2007-2008 and later

24.51 The cash contribution established under any of subparagraphs 24.4(1)(a)(v) to (vii) that may be provided to a province for the fiscal year mentioned in that subparagraph is the amount determined by multiplying the amount established under that subparagraph for that fiscal year by the quotient obtained by dividing

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

by

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

24.6 [Repealed, 2012, c. 19, s. 398]

Wait Times Reduction Transfer

Marginal note:Purposes

24.61 Subject to this Part, a Wait Times Reduction Transfer is established under section 24.62 to provide funding for the purposes of assisting the provinces to reduce wait times according to their respective priorities, including training and hiring more health professionals, clearing backlogs, building capacity for regional centres of excellence, expanding appropriate ambulatory and community care programs and expanding tools to manage wait times, as outlined in the 2004 10-Year Plan to Strengthen Health Care.

Marginal note:Transfer

24.62 The Wait Times Reduction Transfer shall consist of

• (a) the cash contribution referred to in subsection 24.63(1); and

• (b) the cash contributions referred to in subsection 24.64(1).

Marginal note:Payment to trust

• 24.63 (1) The Minister may pay $4.25 billion to a trust established to provide the provinces with funding for the purposes referred to in section 24.61.

• Marginal note:Provincial share

  (2) The amount that may be provided to a province by the trust is to be determined in accordance with the terms of the trust indenture establishing the trust.

• Marginal note:Payment out of C.R.F.

  (3) Notwithstanding section 24.8, the amount payable under subsection (1) may be paid by the Minister to the trust out of the Consolidated Revenue Fund at the times and in the manner that the Minister considers appropriate.

Marginal note:Cash contributions to provinces

• 24.64 (1) For the purposes referred to in section 24.61, the Minister may make cash contributions to the provinces equal to $250 million for each fiscal year in the period beginning on April 1, 2009 and ending on March 31, 2014.

• Marginal note:Provincial share

  (2) The amount that may be paid to a province for each of the fiscal years mentioned in subsection (1) is the amount determined by multiplying the amount set out for that fiscal year by the quotient obtained by dividing

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

  by

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

Total Equalized Tax Transfer

Marginal note:Total equalized tax transfer — fiscal years 2004-2005 to 2006-2007

• 24.7 (1) The total equalized tax transfer applicable to a province for each fiscal year in the period beginning on April 1, 2004 and ending on March 31, 2007 is the aggregate of

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

  • (b) the amount equal to the lesser of

    • (i) the equalization payment referred to in subsection (1.1) that would be payable to the province for the fiscal year, and

    • (ii) the amount of equalization that would be paid to the province in respect of the federal income tax reduction in all the provinces in respect of the Canada Health Transfer and the Canada Social Transfer for the fiscal year, if the method of calculation of fiscal equalization payments as set out in Part I, excluding subsection 4(6) of this Act, as that Part read on May 13, 2004, were to be applied to the value of the income tax reduction in all the provinces in respect of the Canada Health Transfer and the Canada Social Transfer for the fiscal year, except that

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

      • (B) where subsection 4(6) of this Act as it read on May 13, 2004 applies in the determination of the fiscal equalization payment to the province for the fiscal year, the amount determined under this subparagraph is to be adjusted in the prescribed manner.

• Marginal note:Equalization payment payable

  (1.1) For the purposes of subparagraph (1)(b)(i),

  • (a) for each fiscal year in the period beginning on April 1, 2005 and ending on March 31, 2007, the equalization payment shall be the equalization payment that would be payable to the province for the fiscal year under Part I, as that Part read on March 28, 2007; and

  • (b) for the fiscal year beginning on April 1, 2004, the equalization payment shall be

    • (i) in the case of a province that receives an additional fiscal equalization payment under subsection 4(3), as it read on March 28, 2007, the estimate that was made by the Minister on February 23, 2004 in respect of the fiscal year in accordance with section 8 of the Federal-Provincial Fiscal Arrangements Regulations, 1999, and

    • (ii) in the case of a province that does not receive an additional fiscal equalization payment under subsection 4(3), as it read on March 28, 2007, the final computation in respect of the fiscal year.

• Marginal note:Total equalized tax transfer — fiscal years 2007–2008 to 2010–2011

  (1.2) The total equalized tax transfer applicable to a province for each fiscal year in the period beginning on April 1, 2007 and ending on March 31, 2011 is the aggregate of

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

  • (b) in the case of a territory, zero, and in the case of a province, the amount equal to the lesser of

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

    • (ii) an amount equal to the greater of

      • (A) the product obtained by multiplying

        • (I) the aggregate of the amounts obtained by subtracting, for each revenue source referred to in paragraphs (a) and (b) of the definition revenue source in subsection 3.9(1), the per capita yield of the federal income tax reduction for that province for that fiscal year from the per capita national yield of the federal income tax reduction for that fiscal year

        by

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

      • (B) zero.

• Marginal note:Total equalized tax transfer — fiscal year 2009–2010

  (1.21) Despite subsection (1.2), the total equalized tax transfer applicable to a province for the fiscal year beginning on April 1, 2009 is

  • (a) for Ontario, $5,531,594,000;

  • (b) for Quebec, $3,007,447,000;

  • (c) for Nova Scotia, $363,132,000;

  • (d) for New Brunswick, $289,145,000;

  • (e) for Manitoba, $468,518,000;

  • (f) for British Columbia, $1,649,531,000;

  • (g) for Prince Edward Island, $54,129,000;

  • (h) for Saskatchewan, $302,432,000;

  • (i) for Alberta, $2,129,928,000;

  • (j) for Newfoundland and Labrador, $123,276,000;

  • (k) for Yukon, $11,131,000;

  • (l) for the Northwest Territories, $22,794,000; and

  • (m) for Nunavut, $8,510,000.

• Marginal note:Total equalized tax transfer — fiscal year 2011-2012 and later

  (1.22) The total equalized tax transfer applicable to a province for each fiscal year beginning after March 31, 2011 is the aggregate of the total amount, as determined by the Minister, for that fiscal year represented by the federal income tax reduction in that province in respect of the Canada Health Transfer and the Canada Social Transfer for that fiscal year and

  • (a) in the case of a province that receives an equalization payment for that fiscal year under Part I and in the case of Ontario, an amount equal to the lesser of

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

    • (ii) the amount equal to the product obtained by multiplying

      • (A) the aggregate of the amounts obtained by subtracting, for each revenue source referred to in paragraphs (a) and (b) of the definition revenue source in subsection 3.9(1), the per capita yield of the federal income tax reduction for that province for that fiscal year from the per capita national yield of the federal income tax reduction for that fiscal year

      by

      • (B) the population of that province for that fiscal year; or

  • (b) in any other case, zero.

• Marginal note:Revenue sources

  (1.3) For the purposes of the calculation under subparagraph (1.2)(b)(ii) and paragraph (1.22)(a), the relevant revenue bases, per capita yield of the federal income tax reduction and per capita national yield of the federal income tax reduction are to be determined in the prescribed manner.

• Marginal note:Federal income tax reduction

  (2) For the purposes of subsections (1), (1.2) and (1.22), the amount represented by the federal income tax reduction in a province in respect of the Canada Health Transfer and the Canada Social Transfer for a fiscal year is an amount equal to the aggregate of

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

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

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

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

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

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

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

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

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

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

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

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

Transition Protection

Marginal note:Prevention of transfer declines — Canada Health Transfer

• 24.701 (1) The Minister may pay to a province an additional cash payment for each fiscal year beginning after March 31, 2007 equal to the amount by which

  • (a) the cash contribution established under paragraph 24.1(1)(a) to be provided to that province for the fiscal year beginning on April 1, 2007 as calculated under this Act, as it read on March 28, 2007

  exceeds

  • (b) the cash contribution established under paragraph 24.1(1)(a) to be provided to that province for each of those fiscal years as calculated under this Act as it reads on the day on which this subsection comes into force.

• Marginal note:Prevention of transfer declines — fiscal year 2014-2015 and later

  (1.1) The Minister may pay to a province an additional cash payment for each fiscal year beginning after March 31, 2014 equal to the amount by which

  • (a) the cash contribution established under paragraph 24.1(1)(a) to be provided to that province for the fiscal year beginning on April 1, 2013, as determined by the Minister between September 1, 2013 and October 12, 2013,

  exceeds

  • (b) the cash contribution established under paragraph 24.1(1)(a) to be provided to that province for each of those fiscal years as calculated under this Act as it reads on the day on which this subsection comes into force.

• Marginal note:Prevention of transfer declines — Canada Social Transfer

  (2) The Minister may pay to a province an additional cash payment for each fiscal year beginning after March 31, 2007 equal to the amount by which

  • (a) the cash contribution established under paragraph 24.4(1)(a) to be provided to that province for the fiscal year beginning on April 1, 2007 as calculated under this Act, as it read on March 28, 2007

  exceeds

  • (b) the cash contribution established under paragraph 24.4(1)(a) to be provided to that province for each of those fiscal years as calculated under this Act as it reads on the day on which this subsection comes into force.

Marginal note:Payments to Ontario

24.702 The Minister may pay to Ontario an additional cash payment equal to

• (a) for the fiscal year beginning on April 1, 2009, the amount of $489,058,000; and

• (b) for the fiscal year beginning on April 1, 2010, the amount determined by the formula

  -1 × A × B

  where

  A

  is the amount determined for Ontario under subclause 24.7(1.2)(b)(ii)(A)(I) for that fiscal year, and

  B

  is the population of Ontario for that fiscal year.

Marginal note:Payments to Saskatchewan and Newfoundland and Labrador

24.703 The Minister may pay an additional cash payment for the fiscal year beginning on April 1, 2010 equal to,

• (a) for Saskatchewan, $7,304,000; and

• (b) for Newfoundland and Labrador, $8,408,000.

24.71 [Repealed, 2012, c. 19, s. 400]

Payments

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

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

Reduction or Withholding

Marginal note:Definitions

24.9 The following definitions apply in sections 25 to 25.5.

Minister

ministre

Minister means the Minister of Human Resources and Skills 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:Reduction or withholding — Canada Health Transfer and Canada Social Transfer

25 The cash contribution that may be provided to a province under section 24.2, 24.21, 24.5 or 24.51 is to be reduced or withheld for the purposes of giving effect to

• (a) any order made by the Governor in Council in respect of the province under section 15 or 16 of the Canada Health Act or, in the case of a cash contribution under section 24.5 or 24.51, section 25.3 or 25.4 of this Act; or

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

Marginal note:Criteria for eligibility — Canada Social Transfer

• 25.1  In order that a province may qualify for a full cash contribution under sections 24.5 and 24.51 for a fiscal year, the laws of the province must not

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

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

• (2) [Repealed, 2012, c. 19, s. 402]

Marginal note:Referral to Governor in Council

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

• Marginal note:Consultation process

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

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

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

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

• Marginal note:Exception

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

Marginal note:Order reducing or withholding contribution

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

  • (a) direct that any cash contribution under section 24.5 or 24.51 to that province for a fiscal year be reduced, in respect of each non-compliance, by an amount that the Governor in Council considers to be appropriate, having regard to the gravity of the non-compliance; or

  • (b) if the Governor in Council considers it appropriate, direct that the whole of any cash contribution under section 24.5 or 24.51 to that province for a fiscal year be withheld.

• Marginal note:Amending orders

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

• Marginal note:Copy of order

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

• Marginal note:Commencement of order

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

Marginal note:Reimposition of reductions or withholdings

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

Marginal note:When reduction or withholding imposed

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

Additional Withholding and Deduction

Marginal note:Definition of federal payment

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

• Marginal note:Additional withholding or reduction

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

• Marginal note:Additional deduction

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

References in Other Acts

Marginal note:References in other Acts

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

Report

Marginal note:Report by Ministers

25.8 The Minister, the Minister of Health and the Minister of Human Resources and Skills 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.

Parliamentary Review

Marginal note:Review

• 25.9 (1) Parliament having authorized the appropriation of money for the Canada Health Transfer and the Wait Times Reduction Transfer for the purpose of giving effect to the 2004 10-Year Plan to Strengthen Health Care, a review of the progress in implementing that Plan shall be undertaken by such committee of the Senate, of the House of Commons or of both Houses of Parliament as may be designated or established, using the reports referred to in the Plan. The committee shall undertake the review on or before March 31, 2008 and three years thereafter.

• Marginal note:Report

  (2) The committee shall, within three months after beginning the review or within such further time as the Senate, the House of Commons or both Houses of Parliament, as the case may be, may authorize, submit a report on the result of that review to that House or both Houses.

Communiqués

Marginal note:Communiqués

25.91 For greater certainty and for the purposes of this Part (V.1), the 2004 10-Year Plan to Strengthen Health Care includes the communiqués released in respect of the First Ministers’ Meeting on the Future of Health Care that was held from September 13 to 15, 2004.

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:Recovery

28 The amount of additional tax abatement applicable in respect of a province in a fiscal year, as determined by the Minister under section 27, must be recovered out of any moneys payable to the province under this Act or as a debt due to the Government of Canada by the province.

Marginal note:Over-recovery

29 If the Minister determines that he or she has over-recovered any amount recoverable from a province under this Part, he or she must, within the prescribed time and in the prescribed manner, pay that province an amount equal to the over-recovery.

Marginal note:Under-recovery

29.1 If the Minister determines that he or she has under-recovered any amount recoverable from a province under this Part, he or she must recover an amount equal to the under-recovery either

• (a) within the prescribed time and in the prescribed manner, from any amount payable under this Act to that province, or

• (b) from that province as a debt due to Her Majesty in right of Canada.

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

30 The amounts authorized under this Part to be paid by the Minister must be paid out of the Consolidated Revenue Fund 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 included 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) respecting the determination of amounts that are to be computed under Part I or I.1;

• (a.1) respecting the information that must be prepared and submitted by the Chief Statistician of Canada for the purposes of Parts I, I.1 and V.1;

• (a.2) providing for the provincial or territorial revenues that are derived from, or are deemed to be derived from, the revenue sources referred to in each paragraph of the definition revenue source in subsections 3.5(1), 3.9(1) and 4(1);

• (a.3) amending the definition revenue source in subsection 3.9(1) by dividing a revenue source set out in a paragraph of that definition into two or more separate revenue sources;

• (a.4) [Repealed, 2007, c. 35, s. 168]

• (b) respecting the calculation and 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 and the adjustment, by way of reduction or set off, of other payments to the province because of those advances;

• (b.1) respecting 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 and Skills 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.

Softwood Lumber Products Export Charge Act, 2006

Marginal note:Recovery

• 40.1 (1) Despite any other provision of this Act, if, in any fiscal year, the costs referred to in paragraphs 99(1)(a) and (b) of the Softwood Lumber Products Export Charge Act, 2006 exceed the revenues, less any refunds, derived by Her Majesty in right of Canada from the charges imposed under sections 10 and 15 of that Act, then the amount of that excess may be recovered from any payments payable to provinces under this Act.

• Marginal note:Restriction

  (2) Despite subsection (1), the amount that may be recovered under that subsection with respect to a province for a fiscal year shall not exceed the difference between the aggregate of the amounts paid to that province under section 99 of the Softwood Lumber Products Export Charge Act, 2006 in prior fiscal years and the aggregate of the amounts that have been previously recovered under this section with respect to that province for those prior fiscal years.

Payment out of Consolidated Revenue Fund

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

41 From and out of the Consolidated Revenue Fund there may, on the requisition of the Minister, be paid an amount authorized to be paid by Part I, I.1 or II at the times and in the manner that may be prescribed or, if no times and manner have been prescribed, at the times and in the manner set out in that Part.