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Federal-Provincial Fiscal Arrangements Act (R.S.C., 1985, c. F-8)

Act current to 2020-01-16 and last amended on 2018-06-21. Previous Versions

PART IFiscal Equalization Payments (continued)

Fiscal Equalization Payments to Provinces (continued)

Marginal note:General rule

  •  (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  • (4) [Repealed, 2013, c. 33, s. 112]

  • 2007, c. 29, s. 62
  • 2009, c. 2, s. 384
  • 2013, c. 33, s. 112

 [Repealed, 2013, c. 33, s. 113]

Marginal note:Less than 50% of population

  •  (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]

  • 2007, c. 29, s. 62
  • 2009, c. 2, s. 385
  • 2013, c. 33, s. 114
 
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